Multifactor Productivity Calculator

Formula

The formula to calculate Multifactor Productivity (MP) is:

\[ MP = \frac{O}{L + C + M} \]

Where:

$ MP $ is the Multifactor Productivity
$ O $ is the Total Units of Output
$ L $ is the Labor Costs
$ C $ is the Capital Costs
$ M $ is the Material Costs

Multifactor Productivity Definition

Multifactor productivity is a rate of production value per unit of combined costs for a product. It accounts for all factors that go into the cost of the product such as labor, capital investment, and material costs.

Example Calculation

Let's consider an example:

Total Units of Output (O): 1000
Labor Costs (L): $200
Capital Costs (C): $300
Material Costs (M): $500

Using the formula to calculate the Multifactor Productivity:

\[ MP = \frac{1000}{200 + 300 + 500} = 1.25 \]

This demonstrates that with a total output of 1000 units and combined costs of $1000, the multifactor productivity would be 1.25 units per dollar.