Problem 2-4 A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used 5 workers, who together produced an average of 70 carts per hour. Workers receive $11 per hour, and machine cost was $40 per hour. With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $11 per hour while output increased by 6 carts per hour. a. Compute labor productivity under each system. Use carts per worker per hour as the measure of labor productivity. (Round your answers to 3 decimal places.) Before carts per worker per hour After carts per worker per hour b. Compute the multifactor productivity under each system. Use carts per dollar cost (labor plus equipment) as the measure. (Round your answers to 3 decimal places.) Before carts/dollar cost After carts/dollar cost c. Comment on the changes in productivity according to the two measures. Round your intermediate calculations to 3 decimal places and final answers to 2 decimal places. increased by % Labor productivity Multifactor productivity increased by
Problem 2-4 A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used 5 workers, who together produced an average of 70 carts per hour. Workers receive $11 per hour, and machine cost was $40 per hour. With the new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $11 per hour while output increased by 6 carts per hour. a. Compute labor productivity under each system. Use carts per worker per hour as the measure of labor productivity. (Round your answers to 3 decimal places.) Before carts per worker per hour After carts per worker per hour b. Compute the multifactor productivity under each system. Use carts per dollar cost (labor plus equipment) as the measure. (Round your answers to 3 decimal places.) Before carts/dollar cost After carts/dollar cost c. Comment on the changes in productivity according to the two measures. Round your intermediate calculations to 3 decimal places and final answers to 2 decimal places. increased by % Labor productivity Multifactor productivity increased by
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Transcribed Image Text:Problem 2-4
A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment that reduces the
labor content of the jobs needed to produce the shopping carts. Prior to buying the new equipment, the company used 5 workers,
who together produced an average of 70 carts per hour. Workers receive $11 per hour, and machine cost was $40 per hour. With the
new equipment, it was possible to transfer one of the workers to another department, and equipment cost increased by $11 per hour
while output increased by 6 carts per hour.
a. Compute labor productivity under each system. Use carts per worker per hour as the measure of labor productivity. (Round your
answers to 3 decimal places.)
Before
carts per worker per hour
After
carts per worker per hour
b. Compute the multifactor productivity under each system. Use carts per dollar cost (labor plus equipment) as the measure. (Round
your answers to 3 decimal places.)
Before
carts/dollar cost
After
carts/dollar cost
c. Comment on the changes in productivity according to the two measures. Round your intermediate calculations to 3 decimal
places and final answers to 2 decimal places.
increased
by %
Labor productivity
Multifactor productivity
increased
by
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