Module1 Assignment

1. As part of a study for the Dept. of Labor Statistics, you are assigned the task of evaluating the improvement in productivity of small businesses. Data for one of the small businesses you are to evaluate is are shown below:

	Last year	This year
Production (dozen)	2,000	2,000
Labor (hours)	350	325
Capital investment ($)	15,000	18,000
Energy (BTU)	3,000	2,700

Note Labor: $10 per hour, Capital: 0.50% per month of investment, Energy: $0.60 per BTU

*Show calculation process with answers in three decimal places.

The data are monthly average of last year and the monthly average this year.

Determine the multifactor productivity with dollars as the common denominator for:

1) (10 pts). Last year

2) (10 pts). This year

3) (5 pts). Then determine the percent change in productivity for the monthly average last year versus the monthly average this on a multifactor basis.

2. Three small companies in the same industry are competing each other with the following input and output during the same period of operations:

Company	A	B	C
Input (costs)	10	5	20
Output (Boxes)	5000	1000	2000

a) ( 5pts). Rank companies according to the productivity (Highest to lowest):____________________

b) (5 pts). For the least productive company, calculate the desired output, while holding the same level of input, to be comparable to the most productive company, which is called a benchmark.

Answer) ______________________

3. (5 pts). What are the five reasons productivity is difficult to improve in the service sector?