Group 2 (BSA1B)

Cailao, Audrey
Del Rosario, Danielle Kate
Dimaculangan, Lyka
Manaig, Sofia
Pornillosa, Chrisza Mae
Reyes, Ivygail
1. Prepare the productivity part of the report for Mr. Richards. He probably expects some
analysis of productivity inputs for all factors, as well as a multifactor analysis for both years
with the change in productivity (up or down) and the amount noted.

Single-Factor Productivity:
2008 2009
PRODUCTIVITY PRODUCTIVITY
= UNITS PRODUCED ÷ LABOR-HOURS = UNITS PRODUCED / LABOR-HOURS
USED USED
= 4,500 ÷ 22,000 x 13 = 6,000 ÷ 28,000 x 14
= 4,500 ÷ 286,000 = 6,000 ÷ 392,000
= 0.0157 units/labor-hour = 0.0153 units/labor-hour

Multi-Factor Productivity:
2008 2009
PRODUCTIVITY PRODUCTIVITY
= OUTPUT ÷ LABOR + MATERIAL + = OUTPUT ÷ LABOR + MATERIAL +
ENERGY+ CAPITAL+ ENERGY+ CAPITAL+
MISCELLANEOUS MISCELLANEOUS
= 4,500 ÷ (700 x 320) + 375,000 = 6,000 ÷ (900 x 360) + 620,000
= 4,500 ÷ 224,000 + 375,000 = 6,000 ÷ 324,000 + 620,000
= 4,500 ÷ 599,000 = 6,000 ÷ 944,000
= 0.0075 units/dollar = 0.0064 units/dollar

As seen on the solutions above the productivity in 2008 is greater than the productivity in 2009
both on single-factor and multi-factor productivity. Though all the inputs of all factors increased,
the productivity of Mr. Richards’ company decreased.
2. Having a high producer price index will lead to the consumer to pay more for the product.
The increased on PPI of Mr. Richards resulted to high cost and his high cost can lead to a
 higher price of his product and the consumer might pay more expensive because of it.
Moreover a declining PPI is often taken as a sign of an economic slowdown.

3. The productivity using the single factor in 2008 were 0.01573 and 0.01530 in 2009 so the
productivity decreased by 2.73%. In using the multi factor, the productivity in 2008 were
0.00751 and 0.00636 in 2009 so the productivity decreased by 15.31%. Therefore, Mr.
Richard did not reach the goal of having an annual productivity increase of 5%.