1. Compute the productivity report the company’s output and input.

2015 2016 2017

Output (in units)

Energy 3 2.95 2.18
Chemicals 40 41.40 40
Labor units 18.18 17.11 17
Hauler 75 81.25 85
Inventory cost 54.55 54.17 52.31
Multifactor Input ($) 0.031 0.030 0.029

2. Compute the period to period ratio

2016 vs. 2015 2017 vs. 2016

Energy down 1.52% down 26.23%

Chemicals up 3.50% down 3.38%
Labor units down 5.92% down 0.62%
Hauler up 8.33% up 4.62%
Inventory cost down 0.69% down 3.43%

3. Conclude the results of the computations.

Based on the results, the inputs - Energy, Labor units and Inventory cost

productivity in 2017 decreased to 2.18, 17 and 52.31 respectively same in the period

ratio, there is downward ratio for the energy, labor units and inventory cost in the year

2017 by 26.23%, 0.62% and 3.43% respectively. It shows that Benz strategy in

increasing the inputs- Energy, labor units and inventory cost were not effective

because the results shows a decrease in single-factor productivity at the same time in

the multifactor productivity. Another factor affects the decrease in productivity is that

Benz hired additional workers from the community. Benz should also consider the

ability, skills and education of the workers because it is very important in having an

effective labor force.

On the other hand, chemicals’ productivity is fluctuating, in the year 2016 there

is an increase in productivity of 41.40 and an upward period ratio of 3.50%. The reason
of this increase is because of the little increase on the input (chemical) that gives

contribution in the oil extraction. In the year 2017, there is a decrease of 40 in

productivity and a downward ratio of 3.38%. it only shows that the higher increase in

input (chemical) could lead to a lower productivity.

However, the input (hauler) maintain the number of units for three years and

the productivity increases by 85 and an upward period ratio of 4.62% in the year 2017.

Therefore, productivity measures do not vary on the output but also in the input.

Based on the productivity results, as the input increases the productivity and period

ratio decreases and as the input remains constant productivity increases. Thus, Benz

should know that high in production or output may imply only that more people are

working or there is a high contribution of inputs, but it does not imply high productivity.

In addition, if Benz wants to improve its productivity he should have a reduction in

inputs while output remains constant or an increase in output while inputs remain

constant.