300 units were produced by three workers who used 600 pounds of materials. 20% of the units are defectives and cant be sold. Workers have an hourly wage of $20, and material cost is $1 per pound. Overhead is 1.5 times labour cost.

a. Compute the multifactor productivity measure for an eight-hour day. (Show your calculations).

(10 marks)

b. The production manager suggested to invest in the automated production aiming reducing the defect rate to 0. Discuss the impact of the new automated production machines in growing their productivity in that year? (Show your calculations).