Reference no: EM132627636

Question - A health club has 4 employees who work on lead generation. Each employee contacts leads 20 hours a week and is paid $20 per hour.

Each employee contacts an average of 150 leads a week. Approximately 12% of the leads become members and pay a onetime fee of $100.

Material costs are $180 per week, and overhead costs are $1,400 per week.

Required -

a. Calculate the multifactor productivity for this operation in fees generated per dollar of input.

b. The club's owner is considering whether to purchase a new software program that will allow each employees to contact 20 more leads per week. Material costs will increase by $320 per week. Overhead costs will remain the same. Calculate the new multifactor productivity if the owner purchases the software.

c. How would purchasing the software affect productivity?