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A grocery chain is considering installation of the set of four self-checkout lanes. The new self-checkout lane setup will restore two old cashier lanes which were staffed by the cashier and bagger on each lane. One cashier mans all 4 self-checkouts (answering queries, checking for un-scanned items, taking coupons, and so on). Checkout on the new lanes takes two minutes (customers bag their own orders) while checkout with old lanes took only 45 seconds. Additionally the electricity costs for both setups are $.05 per checkout while bagging (material) costs are $.10 per checkout with old system and $.15 for new system. The new lanes as well require $100 in capital costs. Suppose that the new lanes are always in use for eight hours per day (1 shift) and that the worker makes $10.00/hour. What is multifactor productivity for each system?

Operation Management, Management Studies

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