Note: Single factor factor can be any single input
Note: Multi-factor can be a combination of any number of specified inputs, but all must be in the same sa me unit of measure
Total %a!tor :
outputs allinputs
Prou!ti"it# &hange =
New productivity productivity−Old productivity Old productivity productivity
x 100%
'uestion )
firm cleans chemical tan! cars in the "ay St# $ouis area# ith standard e&uipment, the firm typically cleaned '0 chemical tan! cars per month# (hey utili)ed 10 gallons of sol*ent, and t+o employees +or!ed 0 days per month, mon th, hours a day# da y# (he company decided to s+itch to a larger cleaning machine# $ast pril, they cleaned .0 tan! cars in only 1/ days# da ys# (hey utili)ed 1 gallons of sol*ent, and the t+o employees +or!ed . hours a day# f labor costs 102hour and sol*ent costs / a gallon, has the firm impro*ed its total producti*ity during the past year3 "y ho+ much3
4olly 4oolittle has a ne+ home business ma!ing fridge magnets# She +or!s 1 hours to produce 50 magnets a day# Materials cost 6#/0 per magnet# 7er o*erhead costs 5#00 a day 8energy, deli*ery, etc#9#She pays herself 10#00 an hour# a9 hat is 4ollys total producti*ity3
b9 4olly thin!s she can increase her producti*ity to 6.0 magnets a day if she uses ne+ materials# She is on her +ay to negotiate a cost for these materials +ith the supplier# hat is the most she can pay for these new materials before her total producti*ity drops3
a9 ?alculate the total producti*ity for each centre# hich is most producti*e3 b9 or!ers in ?entre 1 are scheduled to recei*e a 10% pay raise next month# hat is the change in producti*ity3 ?onsidering the impact on producti*ity at this centre, ma!e a recommendation to management about ho+ to alter operations at ?entre 1# c) ne+ processing machine is a*ailable for ?entre 6, that +ould increase the output to /000 pieces an hour, at an additional o*erhead rate of 60 per hour# Should ;+e-
