The legal assistants at a prestigious law firm have proposed

The legal assistants at a prestigious law firm have proposed a new search engine for their use. They charge their clients $670 for each title search and pay their clerks $25.00 per hour. Currently, a typical search process requires 44 minutes of each person\'s time. With the new tool, they will need only 36 minutes per search but they will be charged $2.0 per search in fees. What is the percent change in multifactor productivity compared to the current search process? (Keep two decimal places in your answer)

Solution

Current process :

Price paid by client = $670

Cost of search by each clerk = $25/ hour x 44 minutes = 25 x 44/60 = $18.33

Multifactor productivity = Price paid by client / Cost of search = 670/18.33 =    36.55

New process:

Price paid by client = Original price + search fee = $670 + $ 2 = $672

Cost of search by each clerk = $25/ hour x 36/60 = $15

Multifactor productivity = Price paid by client / Cost of search = 672/15 = 44.8

Percentage change in multifactor productivity

= ( Multifactor productivity in new process – Multifactor productivity in old process) / Multifactor productivity in old process x 100

= ( 44.8 – 36.55)/36.55 x 100

= 8.25/36.55 x 100

= 22.57 %

PERCENTAGE CHANGE IN MULTIFACTOR PRODUCTIVITY = 22.57%