Productivity can be measured in a variety of ways, such as by labor, capital, energy, material usage, and so on. At Modern Lumber, Inc. Art Binley, president and producer of apple crates sold to growers, has been able, with his current equipment, to produce 240 crates per 100 logs. He currently purchases 100 logs per day, and each log requires 3 labor- hours to process. He believes that he can hire a professional buyer who can buy better – quality log at the sane cost. If this is the case, He can increase his production to 260 crates per 100 logs. His labors- hours will increase by 8 hours per day.
What will be the impact on productivity (measured in crates per labor-hour) if the buyer is hires?
Art Binley has decided to look at his productivity from multifactors ( total factor productivity) perspective (refer to Solved Problem 1.1) To do so, ha has determined his labor, capital, energy, and material usage and decide to use dollars as the common denominator. His total- labor- hours are now 300 per day and will increase to 308 per day. His capital and energy costs will remain constant at $350 and $ 150 per da, respectively. Material costs for the 100 logs per day are $1,000 and will remain the same. Because he pays an average of $10 per hour ( with fringes). What will be the impact on multifactor productivity