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