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In 20x1, Fleming Chemicals used the following input combination to produce 52,100 gallons of an industrial solvent:

Materials38,400 lbs.Labor76,800 hrs.

In 20x2, Fleming again planned to produce 52,100 gallons of solvent and was considering two different changes in process, both of which would be able to produce the desired output. The following input combinations are associated with each process change:

Change IChange IIMaterials44,800 lbs.32,000 lbs.Labor51,200 hrs.64,000 hrs.

The following combination is optimal for an output of 52,100 units. However, this optimal input combination is unknown to Fleming.

Materials25,600 lbs.Labor51,200 hrs.

The cost of materials is $60 per pound, and the cost of labor is $15 per hour. These input prices hold for 20x1 and 20x2.1.Compute the productivity profiles for each of the items listed below:

a. The actual inputs used in 20x1. If required, round your answers to two decimal places.

20x1MaterialsLabor

b. The inputs for each proposed 20x2 process change. If required, round your answers to two decimal places.

MaterialsLaborChange IChange II

c. The optimal input combination. If required, round your answers to two decimal places.

OptimalMaterialsLabor

2.Compute the cost of 20x1's productive inefficiency relative to the optimal input combination. Repeat for 20x2 proposed input changes.

Cost of Productive Inefficiency20x1$20x2 Change I$20x2 Change II$

Compute the amount of the productivity improvement from 20x1 to 20x2 for each process change. If an amount is zero, enter "0".

Potential Improvement for 20x2Change I$Change II$

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