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Nekundi Shilongo is president of Shilongo Manufacturing, a producer of bicycle tires. Fok makes 1,000 tires per day with the following resources:
Labor: 400 hours per day @ $12.50 per hour.
Raw material: 20,000 pounds per day @ $1 per pound.
Energy: $5,000 per day
Capital costs: $10,000 per day
Question a) What is the labor productivity per labor-hour for these tires at Shilongo Manufacturing?
Question b) What is the multi-factor productivity for these tires at Shilongo Manufacturing?
Question c) What is the percent change in multi-factor productivity if Nekundi can reduce the energy bill by $1,000 per day without cutting production or changing any other inputs?
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