A U.S. manufacturing company operating a subsidiary in an LDC (less developed country) shows the following results:

Question:

A U.S. manufacturing company operating a subsidiary in an LDC (less developed country)

shows the following results:

U.S. LDC Sales (units) 100,000 20,000 Labor (hours) 20,000 15,000 Raw materials (currency) $20,000 FC 20,000 Capital equipment (hours) 60,000 5,000

a. Calculate partial labor and capital productivity fi gures for the parent and subsidiary. Do the results seem misleading?

b. Compute the multifactor productivity fi gures for labor and capital together. Are the results better?

c. Calculate raw material productivity fi gures (units/$ where $1 ⫽ FC 10). Explain why these fi gures might be greater in the subsidiary.

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