Reference no: EM132750900

Based on the data provided below for a small company, please answer the questions that follow:  Previous Year 

           Current Year

Total # units produced                        200,000                       210,000 

Average price/unit                              $12.00                         $12.25

Total cost of raw materials                 $250,000                     $270,000

Labor hours used:                               30,000 hours               28,000 hours

Average labor cost (incl. fringe)        $18 per hour                $19 per hour

Other resources, incl. Overhead         $190,000                     $210,000

A)   Determine labor productivity for each year.  

B)   Determine multifactor productivity for labor and raw materials.

C)   Determine total factor productivity for each year. 

Suppose the manager has set the goal of improving total productivity by at least 3% this year compared to the previous year.  As an operations analyst in the company, she turned to you and said: "I need to know if we have achieved our productivity goal this year.  I would also like to know the relative productivity performance of each factor during the two years."   

Assignment:  Please help the manager understand if the desired 3% growth in total productivity has been achieved this year compared to last year, and show the relative productivity performance of each factor during the two years.