Amber Patel operates a delicatessen store in South Lambert, Nevada. Currently, the store has 4 employees, each one working 160 hours per month. Because of its excellent product and excellent location, demand has increased by 35% in the last year. On far too many occasions, customers have not been able to purchase the cake of their choice. Because of the size of the stores, no new ovens can be added. Amber can improve the yield by one of these two options: (1) adding a new employee; (2) purchasing an improved blender. A new blender means an increase in his investment. This added investment has a cost of $1,100 per month. The total number of labor hours required per month is 640. The pay will be $7 per hour for employees. The store made 2,000 cakes this time last year. If utility costs remain constant at $600 per month, and cost of ingredients at $0.50 er cake,

What is the current multifactor productivity?

What will the multifactor productivity of the deli be if a new employee is hired?

What will be the percentage of increase or decrease with the addition of a new employee?

Answer

What will be the percentage of increase or decrease with the purchase of a new blender?

AnswerWhat will the multifactor productivity of the deli be if a new blender is purchased?

Based on productivity analysis, which option would you recommend?