How did automation affect labor and multifactor productivity

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Reference no: EM132209972

Sweet Tooth Inc., a leading chocolatier, can produce 100 lbs of chocolate powder from 1000 lbs of cocoa beans in 10 hours of processing. Not satisfied with this output, the company is contemplating switching to a more automated process that would yield 200 lbs of chocolate powder per 1800 lbs of cocoa beans and take 15 hours to process. The cost of processing is $25 per hour. Cocoa beans cost $6.80 per lb. Calculate:

a. The labor productivity of the current process

b. The labor productivity of the proposed process

c. The multifactor productivity of the current process

d. The multifactor productivity of the proposed process

e. How did automation affect labor and multifactor productivity?

f. Should Sweet Tooth Inc. continue with the existing process or switch to the new process?

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Reference no: EM132209972

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