Let’s see…Let’s start the the

analytical stuff for Chapter two. We’re going to do some problems so first

I’m going to introduce how to calculate total productivity partial productivity

and multi-factor productivity after that we’ll do some problems on from the book.

okay. The total productivity is calculated as output over input. Partial

productivity is output over part of the input let’s say the input consists of

labor and materials so we have labor cost and material cost so we’re going to

be looking at output over labor as a partial productivity; Output over

materials as a partial productivity so one is a partial productivity of labour

the other one is a partial productivity of materials. A multi-factor productivity

takes multiple inputs so, for instance, if I take the output which is

a total output over the cost of labor and materials that becomes multi-factor

productivity. Let’s look at it so the first thing is I have finished units in

this company as 10,000. Now, these are all dollars so I’m going to make it as

dollars. I’m going to look at the total finished units is 10,000; work

in process is 2,500; dividends is 1,000. These are all output… so the first thing

in this whole chapter 2 is to understand what is output and what is input so here

the input basically is the labor and materials I have some labor of 3,000

dollars and materials of 200 third dollars that

is making this output possible. That’s the whole idea!

So. the total output is calculated if I click on this B15 and I click on this

symbol here which is a total so if I click on that that gives me that total

which is 13,500. Similarly, for the total input I’m going to click on this Sigma

and that gives me 3200 ok so the total output is 13,500 this total input is

3200. My total productivity is going to be equal to the total output

which is B15 over the total input which is going to be B19 and that

comes to 4.21. I can make this to two decimals by clicking on this. See

this one says it decreases the decimal this one increases the decimal so if I

can click on this it decreases the decimal so the total productivity is 4.2

– and this is dollars over dollars so it doesn’t have any units basically. The second one is partial productivity the partial productivity of Labor is

going to be equal to my total output for the labor cost which is three thousand

which is B17 and that comes to 4.5 now the multi-factor productivity of labour

and materials is going to be equal to the total output over the total of labor

and materials which is 3200 which is four point two one and I’m going to make

this again to show to two decimal points. That’s how I calculate the total

productivity partial productivity and multi-factor productivity. Now, let’s talk

about in the book. You have an objective question 14. Here the units produced

for January February March and April for a company are given. The hours per

machines is also given; the number of machines is given. So, my total output for

January is going to be equal to this and I can copy and paste to bring it to

February is 1800. March is 2800; April is 3000. The input is going to be the hours

times number of machines so the hours is 325 for January times the number of

machines is 3 and that comes to 975 and I’m going to copy and paste. My

productivity is going to be equal to the output which is the units produced

divided by the input which is number of machines times hours which is 2.36

and if I copy and paste it I get one point eight for February 1 point 75 for

march 2.34 for April. Now, I can also calculate the average productivity for

January February March and April by having the function average of these

four numbers and that comes to 2.06 Practice this objective

question in the excel sheet that is provided to you in blackboard. I’m going

to do one more problem. The next problem I’m going to do is the

objective number 17. Here, a dealership is selling

deluxe cars and limited cars. They have sold 4000 deluxe cars

with $8,000 per car and 6000 limited cars that is $9,500. The labor for

deluxe and the limited are also given here.

Dollars per unit and units sold. I can calculate the labor productivity in

units of hour or I can calculate the labor productivity in dollars. The last

time when we calculated the units per hour because we had

the the total the units produced the thoth the output was the units produced

and the input was the number of the hours by number of machines. Similarly, we

are going to do this here output in units what is outputs and units that is

going to be equal to this for the limited car the output is going to be

equal to Q5 the input for the labor hours is going to be equal to in hours. The input is going to be so the input in labor hours is

going to be equal to 20,000 which is Q6 and the input in labor hours for the

limited car is going to be equal to Q seven so the productivity of labour

productivity this is a partial productivity is only labor here. So,

basically it’s partial and so partial productivity of a deluxe car is

going to be equal to output which is four thousand divided by the input which

is twenty thousand which comes to 0.2 and the for the limited car it is going

to be six thousand divided by thirty thousand which is R3 and that comes to

zero point two. We have these two numbers as our labor productivity as well as for the limited car the labor productivity in

dollar. Let’s look at it what is the deluxe car output in dollars the deluxe

car output is actually eight thousand dollars per unit times four thousand which is thirty-two million dollars okay so the input in dollars is going to be

equal to twelve dollars per labor times 20,000 laborers for the deluxe car and

that comes to 240,000 the productivity is going to be output over input and

that comes two hundred and thirty three point three

for the limited car the the dollars per unit is 9,500 times 6,000 units were

sold and that comes to 57 million dollars the input in labor would be $14

times the 30,000 laborers and that comes to 420 thousand. that is going to

be the productivity is output over input and that is going to be equal to 57

thousand divided by four hundred and twenty which is Q19 divided by R19

and that comes two hundred and thirty five point seven okay and that is what

we have right now now let’s take a look at it the labor productivity in units

per hour is pretty much the same for the Lexor limited car so it doesn’t have

much difference in productivity the productivity for the labor productivity

in dollars there is a small difference the productivity is better for the

limited car than the deluxe car just a little bit not much but it is still a

little better than the the limited car is little better than the deluxe car. So, that’s how you can compare so this

ends chapter two please practice these simple problems using Excel is going to

get complicated in Chapter three but for the time being we are going to make it

as simple as possible so I would like you to go to the excel and make sure

that you understand and do this. So, this is your online class exercise 2 for

chapter 2.