Identify the inputs and output and their values

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Assignment 1: A company produces 78,000 plastic bags each month using labor and an equipment. The equipment will remain productive for three years with a total cost of $6,000 for three years. The annual labor cost is $7,000.

a) Identify the inputs and output and their values.

b) Calculate the multifactor productivity over a 3 year period.

c) How many additional plastic bag(s) should be produced if an increase of 5% in the multifactor productivity is required? Give details.

d) The company has an option to buy a new equipment, with an operating life of three years and a total cost of $7,500. It would reduce labor costs to $4,000 per year. Would you recommend the purchase of this new equipment? Justify your answer.

Reference no: EM131303926

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