Question

George Kyparisis makes bowling balls in his Miami plant. With recent increases in his? costs, he has a newfound interest in efficiency. George is interested in determining the productivity of his organization. He would like to know if his organization is maintaining the manufacturing average of a? 3% increase in productivity. He has the following data representing a month from last year and an equivalent month this? year:

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	Last Year	Now	Cost Per Input Unit
Units Produced	1 comma 2001,200	1 comma 2001,200
Labor? (hours)	280280	255255	?$1010 per hour
Resin? (pounds)	5050	4545	?$66 per pound
Capital Invested? ($)	9 comma 0009,000	10 comma 00010,000	11?% per month
Energy? (BTU)	2 comma 9002,900	2 comma 7502,750	?$0.600.60 per BTU

The percent change in productivity for one month last year versus one month this year on a multifactor basis with dollars as the common denominator? =

________%

?(enter your response as a percentage rounded to two decimal? places).

Answer 1

Multifactor productivity = output/(labor cost + material cost + capital cost + energy cost)

Last year,

Multifactor productivity = 1200/(280*10 + 50*6 + 9000*11% + 2900*.6)

Multifactor productivity = .206 units per dollar

Now,

Multifactor productivity = 1200/(255*10 + 45*6 + 10000*11% + 2750*.6)

Multifactor productivity = .215 units per dollar

% increase in multifactor productivity = (.215 - .206)/.206 = 4.37%

So, the percentage change in productivity from the month of last year to now, is 4.37%.