Question Set 2. For this question set, you will calculate labor productivity and multifactor productivity, both in tons of rice produced per dollar value of inputs.
A Rice Manufacturer employs 65 fleld workers (each working 40 hours per week at a wage of$12/hr) and 18 line workers (each working 40 hours per week at a wage of $22/hr).The business has capital expenses of $17,500 per week and produces 325,000 tons of rice perweek.
Recently, the company decided to invest on additional equipment which increased the capital expenses by 8%. Also, the number of field workers was cut short by 20% whereas line workers were 5% more recruited. Both field and line workers were given a raise of 10% and 8%,respectively. Due to the above-mentioned changes, the new system reported to have a 8%more output than the old system.You will need the following formulas:
LABOUR PRODUCTIVITY = WEEKLY OUTPUT /WEEKLY TOTAL LABOR COST
MULTIFACTOR PRODUCTIVITY= WEEKLY OUTPUT /WEEKLY TOTAL LABOR COST WEEKLY CAPITAL EXPENSES
1. Calculate the Total Input Cost for Old and New systems (Labor cost + capital expense) (2pts)
2. Calculate the Capital Expenditure and Output of the new system (2 pts)
5. Calculate the percentage changes in labor and multifactor productivity. (3pts)
3. Calculate labor productivity including all employees (line workers & field workers) for the old and new systems, in tons of output per dollar of input. (4pts)
4. Calculate the multi factor productivity (including line workers, field workers, and capital expenses) for the old and new systems, in tons of output per dollar of input. (4pts)
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