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Lake Manufacturing produces bike tires. They make 1,000 tires per daywith the following resources:
LABOR: 400 hours per day
RAW MATERIALS: 20,000 pounds per day
ENERGY: $5.000 per day
CAPITAL COSTS: $10,000 per day
A. What is the labor productivity per hour for the tires?
B. What is the multi-factor productivity for the tires?
C. What percentage changes in multi-factor productivity if the company can reduce energy costs by $1,000. per day without cutting production, or changing any other inputs?
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