Question: please show me full work. thank you Problem 1: A company that makes shopping carts for supermarkets and other stores recently purchased some new equipment
please show me full work. thank you
Problem 1: A company that makes shopping carts for supermarkets and other stores recently purchased
some new equipment that reduces the labour content of the jobs needed to produce the shopping carts.
Prior to buying the new equipment, the company used four workers, who produced an average of 80
carts per hour. Labour cost was $10 per hour and machine cost was $40 per hour. With the new
equipment, it was possible to transfer one of the workers to another department. Machine cost
increased by $10 per hour while output increased by four carts per hour.
a. Calculate labour productivity before and after the new equipment. Use carts per worker per
hour as the measure of labour productivity.
b. Calculate the multi-factor productivity before and after the new equipment. Use carts per
dollar cost (labour plus machine) as the measure.
c. Comment on the changes in productivity according to the two measures (labour and
multifactor). Which measure do you believe is more pertinent for this situation and why?
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