Question 1187470: 4. A company offers ID theft protection using leads obtained from client banks. Three employees work 40 hours a week on the leads, at a pay rate of $25 per hour per employee. Each employee identifies an average of 3,000 potential leads a week from a list of 5,000. An average of 4 percent actually sign up for the service, paying a one-time fee of $70. Material costs are $1,000 per week, and overhead costs are $9,000 per week. Calculate the multifactor productivity for this operation in fees generated per dollar of input.
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! you are looking for the multi-productivity factor in fees generated per dollar of input.
your numerator will be dollars of revenue generated.
your denominator will be dollars of cost required.
your labor input will be 3 people * 25 dollars an hour each * 40 hours each = 3000 dollars per week.
your material costs are 1000 dollars per week.
your overhead costs are 9000 dollars per week.
your total input costs are 3000 + 1000 + 9000 = 13000 dollars per week.
each employee identifies an average of 3000 leads per week from a list of 5000.
an average of 4% of those leads actually signs up for the service, paying a one time fee of 70 per service.
each employee therefore generates .04 * 3000 * 70 = 8400 dollars in fees each week.
multiply that by 3 employees to get 3 * 8400 = 25200 dollars a week generated in fees.
that's your revenue.
your output is 25200 dollars of revenue.
your input is 13000 dollars of cost.
you productivity factor would be 25200 / 13000 = 1.938461538 per average week.
that translates to 1.938461538 dollars of revenue for every 1 dollar of cost.
here's a reference on multi-factor productivity you might find interesting.
https://smallbusiness.chron.com/multifactor-productivity-ratio-31922.html
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