Question

George Kyparisis makes bowling balls in his Miami plant. With recent increases in his costs, he has a newfound interest in efficiency. George is interested in determining the productivity of his organization. He would like to know if his organization is maintaining the manufacturing average of a 3% increase in productivity. He has the following data representing a month from last year and an equivalent month this year:

  

	Last Year	Now	Cost Per Input Unit
Units Produced	1000	1000
Labor (hours)	300	275	$12 per hour
Resin (pounds)	50	45	$5 per pound
Capital Invested ($)	9000	10,000	1 % per month
Energy (BTU)	3000	2850	$0.50 per BTU

The percent change in productivity for one month last year versus one month this year on a multifactor basis with dollars as the common denominator =

Answer 1

Multi-factor productivity is nothing but the measure that gives clear picture about the overall efficiency based on the labor and capital inputs used in the production process.