Question

Various financial data for the past two years follow. Calculate the total productivity measure and the partial measures for labor, capital, and raw materials for this company for both years. What do these measures tell you about this company?
Last Year This Year

Output: Sales $200,000 $220,000
Input: Labor 30,000 40,000
Raw Materials 35,000 45,000
Energy 5,000 6,000
Capital 50,000 50,000
Other 2,000 3,000

Answer 1

Answer:

the total productivity decreased from 1.66 to 1.53 due to the decreased in the productivity of the labor( from 6.67 to 5.5) and raw materials (from 5.71 to 4.88)

Explanation:

productivity is defined as the ratio of the output to input.

partial measures is defined as the ratio of the output to the single input or it is the ratio of the output to the labor or the ratio of the output to capital.

total measure is the ratio of the goods or services produced to all the inputs used in producing them.

LAST YEAR:

total productivity = $\frac{200,000}{30,000 + 35,000 + 50,000 + 5,000 + 2,000} = 1.66$

partial productivity for labor = $\frac{200,000}{30,000} = 6.67$

partial productivity for capital = $\frac{200,000}{50,000} = 4$

partial productivity for raw materials = $\frac{200,000}{35,000} = 5.71$

THIS YEAR:

total productivity= $\frac{222,000}{40,000 + 45,000 + 6,000 + 50,000 + 3,000} = 1.53$

partial productivity for labor= 5.5

partial productivity for capital = 4.4

partial productivity for raw materials = 4.88