The Dulac Box plant produces wooden packaging boxes to be used in the local seafood industry. Current operations allow the company to make 500 boxes per day, in two 8-hour shifts (250 boxes per shift). The company has introduced some moderate changes in equipment, and conducted appropriate job training, so that production levels have risen to 300 boxes per shift. Labor costs average $10 per hour for each of the 5 full-time workers on each shift. Capital costs were previously $3000 per day, and rose to $3200 per day with the equipment modifications. Energy costs were unchanged by the modifications, at $400 per day. You have been asked to prepare a research paper that addresses the following elements:

What is the firm’s multifactor productivity before and after the changes?

Why is it important to be aware of the productivity changes?

Analyze implications of changes in the parameters of the productivity calculation.

Evaluate application of productivity concept in terms of the firm’s business operational goals and requirements.

preview of the answer..

The multifactor productivity value comes in as a value of great importance in determining a production plant’s efficiency in production. Before the changes, the firm’s multifactor productivity value was 0.625 and rose to 0.75 following the changes made at the production plant. As such the changes made at the plant can be said to have been to the increase in the effectiveness of the production unit. Just as the aim of any management team in any firm would be, that of the Dulac Box Corporation must have been to increase the efficiency of production. Clearly, they had met their objective with the changes they had made at the plant.

The production unit is one unit that any given company should pay a lot of attention to. Take …

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