Question

Interperiod Measurement of Productivity Profiles Helena Company needs to increase its profits and so has embarked on a program to increase its overall productivity. After one year of operation, Kent Olson, manager of the Columbus plant, reported the following results for the base period and its most recent year of operations: 20x1 20x2 Output Power (quantity used) Materials (quantity used) Required: 185,200 18,520 46,300 217,600 10,800 48,000 1. Compute the productivity profiles for each year. If required, round your answers to two decimal places. 20x1 20x2 Power Materials 2a. Did productivity improve? 2b. Explain why or why not.

Answer 1

1.

Productivity ratio of power, 2001 = Output/Power (Quantity used)

= 185,200/18,520

= 10

Productivity ratio of material, 2001 = Output/Material (Quantity used)

= 185,200/46,300

= 4

Productivity ratio of power, 2002 = Output/Power (Quantity used)

= 217,600/10,800

= 20.15

Productivity ratio of material, 2002 = Output/Material (Quantity used)

= 217,600/48,000

= 4.53

	2001	2002
Power	10	20.15
Materials	4	4.53

2 (a)

yes, productivity improved

2(b)

Productivity ratio for power and materials increased in 2002. therefore, productivity improved in 2002

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