Question

PC.62 Trek is a manufacturing company that produces high-end bicycles. Their prime road bike, the MadOne, can be fully customized through a program called Project One. Last year they rolled out 1,270 bikes which sold on average for $7,900 and used the following inputs as found in the table below:

Inputs	Amount	Cost ($)
Labor Hours	17,400	$19.00
OCLV Carbon (square feet)	1,600	$14.07
Rubber (pounds)	3,375	$4.16
Paint (gallons)	420	$21.84
Energy (kWh)	12,287,180	$0.11

What was last year's single-factor productivity for Trek in terms of rubber (not dollars)? (Display your answer to four decimal places.)


What was last year's single-factor productivity for Trek in terms of OCLV Carbon (input and output units, not dollars)? (Display your answer to four decimal places.)


What was last year's multi-factor productivity for Trek in terms of dollars? (In other words, how many dollars of revenue were generated for each dollar of input? Display your answer to two decimal places.)
   

Suppose in the coming year they expect their multi-factor productivity to increase by 10% over last year (what you just computed). What should be their multi-factor productivity in the coming year? (Display your answer to two decimal places.)
   

Answer 1

We solve the given problem as shown below:

The above solution in the form of formulas is shown below for better understanding and reference:

Hence, we get answers as:

Last year's single-factor productivity for Trek in terms of rubber = 0.3763 Bikes per pound of Rubber

Last year's single-factor productivity for Trek in terms of OCLV Carbon = 0.7938 Bikes per Sq. ft

Last year's multi-factor productivity for Trek in terms of dollars = 5.81

Multifactor productivity in coming year = 5.81 * 1.10 = 6.39

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