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Homework answers / question archive / For the data below, suppose Firm B is a foreign firm

For the data below, suppose Firm B is a foreign firm

Business

For the data below, suppose Firm B is a foreign firm. What additional caveats would you place on interpretations of the data?

A company has gathered the following financial information for itself and a competing firm. They wish to compare productivity for the two firms (all numbers in 000s).

 

  Firm A Firm B
Labor $30,000 $16,000
Plant and equiptment $200,000 $150,000
Energy $17,500 $20,500
Materials $200,000 $180,000
Sales $1,200,000 $900,000

 

a. Compute partial and total factor productivity measures for Firms A and B.

b. What is the picture you get of the two firms?

c. What would you suggest to the management of Firm B?

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