Hadley Technology Inc. manufactures a scrambling device for cellular telephones. The device's main component is a delicate part, CT140. CT140 is easily damaged and requires careful handling. Once damaged, it must be discarded. The firm hires only skilled laborers to manufacture and install CT140; however, some are still damaged. Robotic instruments process all other parts. Hadley's operating data for December 2012 and 2013 follow:

	2013	2012
Units manufactured	600,000	800,000
Number of CT140 used	800,000	825,000
Number of direct labor-hours spent	150,000	200,000
Cost of CT140 per unit	$156	$135
Direct labor wage rate per hour	$56	$63

Required:

1. Compute the partial operational productivity for 2012 and 2013.

2. On the basis of the partial operational productivity that you computed, what conclusions can you draw about the firm's productivity in 2013 relative to 2012?

3. Compute the partial financial productivity ratios from 2012 to 2013.

4. On the basis of the partial financial productivity ratios you have computed, what conclusions can you draw about the firm's productivity in 2013 relative to 2012?

5. Separate the change of the partial financial productivity ratio from 2012 to 2013 into productivity changes, input price changes, and output changes.

6. Does the detailed information provided by separating the change of the partial financial production ratio offer any additional insight into the relative productivity for 2012 and 2013?

(In your calculations use 6 significant digits after the decimal point.)

Answer rating: 100% (QA)

Ans 1 Compute the partial operational productivity for 2012 and 2013 Partial operational productivity is a technique that which is used to measure the units that are manufactured relative to each inpu... View the full answer