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NS Legal ltd. wants to assess its labor and multifactor productivity for a new automatic case-search system. Currently the company has four employs, each work for 8 hours per day with an hourly wage of $20. Overhead is charged daily at the rate of $272 plus 20% of direct labor cost. The company processes 8 cases each day. The new automatic system will allow the processing 0f 14 cases per day. With the new system the number of staff, their work hours and pay will remain same but the overhead will be $480 plus 50% of direct labor cost.
a) Compute single factor productivity of labor for both old and new systems. What increase in labor productivity is associated with the process improvement.
b) Compute multi factor productivity for both old and new systems. What increase in multi factor productivity is associated with the process improvement
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