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Butte Stack Works (BSW) upgraded their equipment in 2016. The upgrade was supposed to increase their labor productivity and their multifactor productivity. The labor cost for Butte Stack Works (BSW) is $12.50/hour. Energy costs are $0.72 per BTU. Capital is 0.075 (or 7.5%) annually. In 2015, BSW invested $10,000 in capital improvements, BSW used 5,500 BTUs of energy, and BSW had 425 labor hours. Butte Stack Works produced 1200 stacks in 2015. In 2016, BSW invested $17,000 in capital improvements, BSW used 4,500 BTUs of energy, and BSW had 350 labor hours. Butte Stack Works produced 1350 stacks in 2016. Setup the problem in Excel, labeling all variables. Calculate the multifactor productivity and labor productivity for both years and the percentage increase or decrease from 2015 to 2016.

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92502814

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