Mack's guitar fabrication shop produces low cost, highly durable guitars for beginners. Typically, out of the 100 guitars that begin production each month, only 80 percent are considered good enough to sell. The other 20 percent are scrapped due to quality problems that are identified after they have completed the production process. Each guitar sells for $240. Because some of the production process is automated, each guitar only requires 10 labor hours. Each employee works an average of 160 hours per month. Labor is paid at $9 per hour, materials cost is $40 per guitar, and overhead is $4,200.

The labor productivity ratio for Mack's guitar fabrication shop is $enter your response here per hour. (Enter your response rounded to two decimal places.)

Part 3

The multifactor productivity ratio for Mack's guitar fabrication shop is

enter your response here.

(Enter your response rounded to two decimal places.)

Part 4

b. After some study, the operations manager Darren Funk recommends 3 options to improve the company's multifactor productivity:

Option

1: increase the sales price by

16 percent

Option

2: improve quality so that only

16 percent are defective, or

Option

3: reduce labor, materials, and overhead costs by 16 percent.

If Mack's guitar fabrication shop decides to implement Darren Funk's option 1 to improve the multifactor productivity, the new productivity level would be

enter your response here.

If Mack's guitar fabrication shop decides to implement Darren Funk's option 2 to improve the multifactor productivity, the new productivity level would be enter your response here.

If Mack's guitar fabrication shop decides to implement Darren Funk's option 3 to improve the multifactor productivity, the new productivity level would be

For increasing the multifactor productivity level, out of the three options identified by Darren, the option that provides the most improvement in productivity is