Question

Charles Lackey operates a bakery in Idaho​ Falls, Idaho. Because of its excellent product and excellent​ location, demand has increased by 45​% in the last year. On far too many​ occasions, customers have not been able to purchase the bread of their choice. Because of the size of the​ store, no new ovens can be added. At a staff​ meeting, one employee suggested ways to load the ovens differently so that more loaves of bread can be baked at one time. This new process will require that the ovens be loaded by​ hand, requiring additional manpower. This is the only thing to be changed. The bakery currently makes 1,800 loaves per month. The pay will be ​$8 per hour for employees and each employee works 160 hours per month.

Charles Lackey can also improve the yield by purchasing a new blender. The new blender will mean an increase in his investment. This new blender will mean an increase in his costs of $150 per​ month, but he will achieve the same new output​ (an increase to 2,610.00) as the change in labor hours.

​a) Current productivity for 640 work hours​ =0.352 ​loaves/dollar ​

If Charles chooses to increase the number of work hours to 928 in order to employ the new oven loading​ technique, then the productivity is​= .352 loaves/dollar

b)If Charles instead chooses to purchase a new blender​ (while holding labor constant at 640 hours at $8

per ​hour)​,then the productivity is​ = 0.495 ​loaves/dollar

******c)By adding​ manpower, the percentage increase in productivity is ____% ​(enter your response as a percentage rounded to two decimal places and include a minus sign if​ necessary)

I just need help with *c*

Thank you in advance

Answer 1

Productivity is nothing but the measure that gives clear picture about the efficiency of production. Productivity is calculated by dividing output by input in a specific period.

Multi-factor productivity is nothing but the measure that gives clear picture about the overall efficiency based on the labor and capital inputs used in the production process.