CURRENT PROCESS

NEW PROCESS

PRODUCTS $($UNITS $/$ HOUR$)$

$200$

$380$

NUMBER OF WORKERS

$10$

$16$

MATERIAL COST $/$ HOUR

$$120$

$$200$

$$

Workers are paid at a rate of $$10$ per hour, and overhead is charged at $150\%($or $1\mathrm{.}5$ times$)$ labor costs. Finished switches sell for $$20/$unit$.$

$$

Please answer the following questions.

a$.$ Calculate the multifactor productivity for the current process.

Hint: Multifactor productivity $=$ Output$/($Labor cost $+$ Material cost $+$ Overhead$)$

$$

$$

b$.$ Calculate the multifactor productivity for the new process.

$$

c$.$ Calculate the increase$/$decrease of productivity $($in percentage$).$ Determine if the new process should be implemented.

Hint: Productivity increase$/$decrease $($in percentage$)=($new process productivity $-$ current process productivity$)/$current process productivity