Productivity Measurement: Trade-Offs, Profile 15-5 and Profit-Linked Analyses L02, L03 Wilton Company has recently installed a computer-aided manufacturing system. The decision to automate was made so that material waste could be reduced. Better quality and a reduction of labor inputs were also expected. After one year of operation, man- agement wants to see if the expected productivity improvements have materialized. The president is particularly interested in knowing whether the trade-off between capital, labor, and materials was favorable. Data concerning output, labor, materials, and capital are provided for the year before implementation and the year after. Chapter 15 Productivity Measurement and Control 551 Output Input quantities: Materials (lbs.) Labor (hrs.) Capital (dollars) Input prices: Materials Labor Capital Year Before 100,000 25,000 5,000 $10,000 Year After 120,000 20,000 2,000 $300,000 S5 S10 10% S5 S10 10% Required: 1. Prepare a productivity profile for each year. Evaluate the productivity changes. 2. Calculate the change in profits attributable to the change in productivity of the three inputs. Assuming that these are the only three inputs, evaluate the decision to automate