15.7

Productivity Measurement, Technical and Allocative EFhcency, Partial Measures Bellamy Company produces handcrafted pottery that uses two inputs: materials and labar, During the past quarter, 22,000 units were produced, requiring 88,000 powinds of materials and 44,000 hours of labor. An engineering efficiency study commissioned by the local university revealed that Bellamy can produce the same 22,000 units of output using either of the following two cambinations of inputs: The cost of materals is $6 per pound; the cost of labor is $14 per hour. Required: 1. Compute the output-input ratio for each input of Combination F1. If required, round your answers to two decimal places. Does this represent a productivity improvement over the current use of inputs? What is the total dollar value of the improvement? Classify this as a technical of an allocative efficency improvement: Classify this as a technical of an allocative efficiency improvement. Finally, describe which data analytic types were used in addressing these issues (descriptive, diagnostic, predictive, and preseriptive; see Exhibits-2.5 and 2.6, for a brief review]. The calculabion of the current productivity ratios is , as it describes what it is. The calculation of the F1 productivity ratios is 2. Compute the output-input ratio for each input of Combination F2. If required, round your answers to two decimal places. Materials Labor Does this represent a productivity improvement over the current use of inputs? Now, compare these ratios to those of Combination F1. What has happened? F2 has productivity for materials and productivity for labor. 3. Compute the cost of producing 22,000 units of output using Combination Fl. Compare this cost to the cost using Combination 12 Does moving from Combination F1 to Combination f2 represent a productivity improvement? What would be your recommendation to beilamy? Overall, Combination F1 produces the productivity improvement for Bellamy than Combination F2. 4. Some would argue that the entire productivity analysis from start to finish is an example of a prescriptive data analytic model. What case would you make to support this position