BA3653

Fall 2016: Assignment 1 Deadline: October 12, 2016, 2Pm

1. Use Excel to answer your assignment.

2. Explain all the details, like definition, units, justification, etc.

3. Name your Excel file as "ID_Assign1" where ID is your ID.

4. Please upload your answer file no later than Wednesday, October 12, 2016, 2pm.

Assignment 1: A company produces 78,000 plastic bags each month using labor and an equipment. The equipment will remain productive for three years with a total cost of $6,000 for three years. The annual labor cost is $7,000.

a) Identify the inputs and output and their values. (4 marks)

b) Calculate the multifactor productivity over a 3 year period. (3 marks)

c) How many additional plastic bag(s) should be produced if an increase of 5% in the multifactor productivity is required? Give details. (3 marks)

d) The company has an option to buy a new equipment, with an operating life of three years and a total cost of $7,500. It would reduce labor costs to $4,000 per year. Would you recommend the purchase of this new equipment? Justify your answer. (5 marks)