. Consider a company that uses 25 hours of labor, 10 pieces of lumber, and 2 boxes of nails to create 4 wooden chairs. Employees are paid $20/ hour. Lumber costs $100 per piece, and each box of nails costs $50. The company sells the chairs for $500 each.
a. Calculate the company’s labor productivity.
b. Calculate the company’s multi-factor productivity for labor and lumber
2. A local insurance company staffs 5 claim adjusters, each working 8 hours a day. In a typical 8-hour day, these 5 employees complete a total of 120 claims a day.
a. How productive are the employees (i.e. what is the company’s labor productivity)?
3. In our simulation a few weeks ago, company 1 created 43 units using 6 employees, each working for ½ hour. They bought 7 sheets of paper at $800/ sheet. Assume that each employee was paid $50/ hour. The units were purchased by the customer for $200 each.
a. Calculate the company’s labor productivity.
b. Calculate the company’s multi-factor productivity for labor and sheets of paper.
