Our examples in the chapter have focused on manufacturing, where the output is units of product and the inputs are manufacturing activities or costs. The concept of productivity can be applied in a variety of settings, wherever there are inputs and outputs. For example, consider LandscapeCity, a landscape design company that specializes in small landscape projects for people living in cities. Amanda Caldwell, the assistant manager, is in the process of trying to determine if productivity has been improving since she was hired 6 months ago. Because it is a design firm, labor is the only significant expense, but Amanda is unsure if the number of projects or the dollar of sales volume should be used when computing productivity. She has collected these data for sales and labor expenses for the past 6 months:

Required:

1. Calculate the productivity for each month and the change in productivity from month to month using number of projects as the measure of output.

2. Calculate the productivity for each month and the change in productivity from month to month using sales dollars as the measure of output.

Month 1 2 3 4 5 6 Labor Expense $ 26, 160 38, 400 21, 392 15, 194 15, 926 22,592 Number of Projects 54 80 50 13 18 50 Sales Dollars $ 22,090 23, 900 30, 780 20,560 23, 680 23, 520