Multi-factor productivity for labor and lumber


Consider a company that uses 25 hours of labor, 10 pieces of lumber, and 2 boxes of nails to create 4 wooden chairs. Employees are paid $20/ hour. Lumber costs $100 per piece, and each box of nails costs $50. The company sells the chairs for $500 each.

a. Calculate the company's labor productivity.

b. Calculate the company's multi-factor productivity for labor and lumber

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Operation Management: Multi-factor productivity for labor and lumber
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