Creates pressure-treated utility poles from pine logs

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Reference no: EM13898965

Link’s Lumber creates pressure-treated utility poles from pine logs bought from several surrounding pine plantations. At the Link's Lumber operation, a batch of 100 pine logs yields 85 utility poles with 5 labor- hours required to process the entire batch. Link's Lumber is owned by Artemis Link, whose brother Devious Link is planning to marry Betty Davis, owner of Northlands Pine Plantation. Artemis expects that his future sister-in-law will sell him pine logs for the same price he is paying to purchase them from other growers right now. The difference in Northlands Pine Plantation logs, however, is that they are considerably higher-quality wood than the logs he purchases from his current suppliers. If Betty agres to sell him Northlands Pine Plantation pine logs, each batch of 100 logs can be expected to yield 100 utility poles, although it will take an additional 4 labor-hours per batch to process the higher-quality wood.

A. what is the current labor productivity at Link's Lumber?

B. what will happen to labor productivity at Link's Lumber if indeed Artemis Link is able to puchase Northlands Pine Plantation lumber from Betty?

C. Suppose that Link's Lumber currently Buys batches of 100 pine logs for $40, but Betty will want $60 fo a batch of 100 Northlands Pine Plantation logs. Assuming labor at $30 an hour, what are the appropriate multifactor productivity measures for production from the current logs and production from Northlands Pine Plantation logs?

Reference no: EM13898965

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