4.

Awfat food complex to produced 1600kg/hours macaroni it will use input 300kg/hour
flour,14labor hours and 730birr/hours

i) Identify the outputs and inputs of the company

ii) Estimate yearly outputs and inputs identified either in value or volume

iii) Calculate single, multiple, and total factor productivity

Calculate single, multiple, and total factor productivity

i. Identify the outputs and inputs of the company

Outputs:

1600 kg/hour macaroni

Inputs:

300 kg/hour flour

14 labor hours

730 birr/hour

ii. Estimate yearly outputs and inputs identified either in value or volume

Assuming that the company operates 24 hours a day, 365 days a year, then the yearly output of
macaroni would be:

1600 kg/hour * 24 hours/day * 365 days/year = 132,480,000 kg/year

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The yearly input of flour would be:

300 kg/hour * 24 hours/day * 365 days/year = 26,288,000 kg/year

The yearly input of labor hours would be:

14 labor hours/hour * 24 hours/day * 365 days/year = 11,544,000 labor hours/year

The yearly input of birr would be:

730 birr/hour * 24 hours/day * 365 days/year = 615,220,000 birr/year

iii. Calculate single, multiple, and total factor productivity

Single factor productivity:

Flour: 1600 kg/hour / 300 kg/hour = 5

Labor: 1600 kg/hour / 14 labor hours = 114.28

Birr: 1600 kg/hour / 730 birr/hour = 2.19

Multiple factor productivity:

Total output / Total input = 132,480,000 kg/year / (26,288,000 kg/year + 11,544,000 labor
hours/year + 615,220,000 birr/year) = 0.021

Total factor productivity:

Total output / (Flour + Labor + Birr) = 132,480,000 kg/year / (300 kg/hour + 14 labor hours/hour
+ 730 birr/hour) = 0.35

Interpretation:

The single factor productivity of flour, labor, and birr is 5, 114.28, and 2.19, respectively. This
means that for every 1 kg of flour, 14 labor hours, or 730 birr, the company can produce 5,
114.28, and 2.19 kg of macaroni, respectively.

The multiple factor productivity is 0.021. This means that for every birr spent on inputs, the
company can produce 0.021 kg of macaroni.

The total factor productivity is 0.35. This means that for every unit of input (flour, labor, and
birr), the company can produce 0.35 kg of macaroni.
The total factor productivity is lower than the multiple factor productivity because it takes into
account all three inputs, while the multiple factor productivity only takes into account the cost of
birr.