Multifactor productivity improvement


Problem: CD players are produced on an automated assembly line process. The standard cost of CD players is $150 per unit (labor $30, materials $70 and overhead $50) the sales price is $300 per unit.

1. To achieve a 10 percent multifactor productivity improvement by reducing materials cost only, by what percentage must these costs be reduced?

2. To achieve a 10 percent multifactor productivity improvement by reducing labor cost only, by what percentage must these costs be reduced?

3. To achieve a 10 percent multifactor productivity improvement by reducing overhead cost only, by what percentage must these costs be reduced?

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Other Management: Multifactor productivity improvement
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