2) Navistar, Inc manufactures electrical assemblies The current process uses 11 workers and produces 200 units per hour The firm is considering changing the process with new assembly methods that increase output to 300 units per hour, but will require 12 workers Particulars are as follows Current Process New Process Output (units hour) 200 300 Number of Workers 11 12 Material Cost hour $120 $150 Workers are paid at a rate of $10 per hour, and overhead is charged at 140 (or 1 4 times) labor costs Finished switches sell for $20 unit a) Calculate the multifactor productivity for the current process b) Calculate the multifactor productivity for the new process c) Determine if the new process should be implemented

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Question: 2) Navistar, Inc. manufactures electrical assemblies. The current process uses 11 workers and produces 200 units per hour. The firm is considering changing the process

2) Navistar, Inc. manufactures electrical assemblies. The current process uses 11 workers and produces 200 units per hour. The firm is considering changing the process with new assembly methods that increase output to 300 units per hour, but will require 12 workers. Particulars are as follows:

	Current Process	New Process
Output (units/hour)	200	300
Number of Workers	11	12
Material Cost/hour	$120	$150

Workers are paid at a rate of $10 per hour, and overhead is charged at 140% (or 1.4 times) labor costs. Finished switches sell for $20/unit.

a) Calculate the multifactor productivity for the current process.

b) Calculate the multifactor productivity for the new process.

c) Determine if the new process should be implemented.

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