Merrifield Post Office is evaluating the productivity of its mail processing centers. The centers differ in the degree of automation, the type of work that can be performed, and the skill of the workers.

Center	1	2	3
Pieces processed/hr	1000	2000	3000
No. of workers/hr	12	8	4
Hourly wage rate	$6.50	$12	$15
Overhead rate/hr	$11	$28	$55

1. Calculate the multifactor productivity for each center.
2. Workers in Center 1 are scheduled to receive a 10% pay raise next month. How will that affect productivity?
3. A new processing machine is available for Center 3 that would increase the output to 5000 pieces an hour at an additional overhead rate of $30 an hour. Should Merrifield install the new processing machine?

Answer rating: 100% (QA)

1 To calculate multifactor productivity we use the formula Multifactor Productivity Output Labor Ove... View the full answer