Dimal, Neil Laurrence A.

MA-335

PRODUCTIVITY ASSIGNMENT

ABC Company has a staff of 4, each working 8 hours per day (for a payroll cost of
$640/day) and overhead expenses of $400 per day. ABC Company processes and closes on
8 titles each day. The company recently purchased a computerized title-search system that
will allow the processing of 14 titles per day. Although the staff, their work hours, and pay
are the same, the overhead expenses are now $800 per day.

a. What is the labor productivity with the old system?

Old labor productivity = 8 tiles per day / 32 hours
= 0.25 tiles/hour
b. What is the labor productivity with the new system?
New system productivity = 14 tiles per day / 32 hours
= 0.4375 tiles/hour
c. Multifactor productivity with the old system?
Old multifactor productivity = 8 tiles per day / ($640 + $400)
= 0.0077 tiles/dollar
d. Multifactor productivity with the new system?
New multifactor productivity = 14 tiles per day / ($640 + $800)
= 0.0097 tiles/dollar
e. What is the change in productivity? Did it increase or decrease?
When compared to the prior labor productivity, the new system increased productivity by 75%.