AmazonX, an online retailer, plans to invest in a new material handling technology, e.g., Kiva robots, that will enable faster processing of orders in its warehouse. Currently, a staff of 95 works for 8 hours per day at a payroll cost of $20 per hour per person. In addition to labor, this facility incurs $500 per day for rent and another 5,000 in miscellaneous expenses related to warehouse operations. AmazonX processes an average of 240 orders per day. The new material handling technology allow processing of 300 orders per day. The company will lay off 65 workers and the remaining workers will get a raise to receive $25 per hour per person and will continue to work 8 hours per day. However, daily miscellaneous expenses will go up to $15,000. Compute the expected change in multifactor productivity for AmazonX if they invest in the new material handling technology by answering the questions below.
NOTE: SHOW ALL YOUR WORK. USE 4 DECIMAL PLACES IN YOUR CALCULATIONS.
What is (are) the input(s) that would be used to calculate productivity at AmazonX?
What is (are) the output(s) that would be used to calculate productivity at AmazonX?
Provide the exact formula to calculate multi-factor productivity for AmazonX. (Your answer should be in the form of an equation without any numbers or calculations.)
What is the expected percentage change in multifactor productivity at AUmazon if the company invests in the new material handling technology? NOTE: Use 4 decimal points in all your calculations. Do NOT round values to nearest whole numbers.