Question

A company offers ID theft protection using leads obtained from client banks. Three employees work 40 hours a week on the leads, at a pay rate of $12 per hour per employee. Each employee identifies an average of 3,400 potential leads a week from a list of 4,600. An average of 6 percent of potential leads actually sign up for the service, paying a one-time fee of $80. Material costs are $1,500 per week, and overhead costs are $9,300 per week.

Calculate the multifactor productivity for this operation in fees generated per dollar of input. (Round your answer to 2 decimal places.)

What is the Multifactor productivity _____

Answer 1

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Answer:

• Multifactor productivity = Output/Input
• Output = (possible leads*no of workers*fee*Conversion percentage)
• Possible leads =3400
• No of employees = 3
• Fee = $80
• Conversion percentage = 6%
• Output = (3400*3*80*6%) = $48960
• Input= Labor cost + Material cost + Overhead cost
• Labor cost = 3*40*12 = $1440
• Material cost = $1500
• Overhead cost = $9300
• Input = 1440+1500+9300 = $12240
• MFP = 48960/12240 = 4 (Answer)

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