Reference no: EM131952448

Shawn and his associate, Kim, are university juniors and have started a part-time company. They focus on finding stylish products to sell while the products are a fad and then move on to finding the next product.

They are currently selling Lens accessories which people use to take pictures of their surroundings. Shawn orders parts from China and he and Kim must unpack the parts, assemble the lenses, and then repack in a retail box. Since Shawn and Kim are full-time juniors, they can dedicate 15 hours each to the assembly and packaging process per week. On average, they can assemble and box 400 Lens accessories per week from their combined effort.

Shawn wants to determine what the productivity would be if this were a business that he and Kim started after commencement and moved out of their student rental studio with employees. He thinks rent per month for small manufacturing space would be $450 per month. He estimates utilities for space would cost $300 per month.

He and Kim would work on developing the business and hire one employee to work 30 hours per week with a wage of $11.50 per hour. Shawn has an arrangement with a Chinese exporter to purchase the unassembled lenses for $0.50, and the packaging cost is $0.25 for each glass.

Using four weeks per month, what would the productivity be for Sabrina and Kim's new business arrangement assuming they are selling just the selfie sticks and the one employee produced 437 lenses per week?

What will be their % change in productivity?