Compute labor productivity under each system

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Reference no: EM132255791

A company that makes shopping carts for supermarkets and other stores recently purchase new equipment that reduces the labor content of the jobs needed to produce the shopping carts pior to buying the new equipment, the company used 5 workers who produced an average of 80 carts per hour with the new equipment. It was possible to transfer 1 of the workers to another department and equipment cost increased by $10 per hour while output increased by 4 carts per hour.

a. Compute labor productivity under each system.

b. Compute the multifactor productivity under each system.

c. Comment on the changes in productivity according to the two measures and on which one you believe is the more pertinent for this situation?

Reference no: EM132255791

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