Question: Problem 1 ( 2 0 % ) : The management of a company that produces custom computer components received a proposal about investing in advanced
Problem :
The management of a company that produces custom computer components received a proposal about investing in advanced machinery to streamline its production processes. Currently, with the existing machinery, the company employs five technicians who assemble an average of components per hour in total. The labor cost is $ per hour, and the machine cost is $ per hour. According to the proposal, by implementing the new machinery, one technician can be reassigned to a different project. The machine cost will be increased by $ per hour, but the output will be increased by six components per hour.
a Calculate labour productivity for the current and new machinery. Use components per hour as the measure of labour productivity. How much in percentage did labour productivity grow?
b Calculate the multifactor productivity for the current and new machinery. Use components per dollar cost labour cost plus machine cost as the measure. How much in percentage did the multifactor productivity grow?
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