Ruby Red Movie Theater has experimented with using different numbers of workers
Ruby Red Movie Theater has experimented with using different numbers of workers in the concession area of the theater as well as at the ticket counter. In these experiments, Tracy, the manager of the theater, collected data on total number of buckets of popcorn as well as movie ticket sales produced per day. Tracy would like for you to analyze the data and tell her how many workers she should use each day in the concession stand area for producing popcorn and in the ticket area for producing movie ticket sales. She would also like to know how many buckets of popcorn and movie tickets will be produced/sold by those workers per day. Access the Unit IV Assignment Worksheet in Blackboard. You will complete the following in this worksheet:
Part 1
Complete the tables calculating the average product, marginal product, total value product, average value product, and marginal value product.
Part 2
Answer the five questions after each table as a guide to use when writing your assignment.
Part 3
Write an assignment of at least 750 words in which you address the following:
Describe your calculations in the table.
Indicate the number of workers used per day where the law of diminishing marginal returns begins for producing buckets of popcorn.
Indicate the number of workers used per day where the law of diminishing marginal returns begins for movie ticket sales production.
Describe the shapes of both the average product and marginal product curves and include how they compare to the average value product and marginal value product curves for both buckets of popcorn and movie tickets.
Indicate the optimal number of workers per day to use and the corresponding total number of buckets of popcorn to produce. Make sure you indicate how you found this optimal number of workers and total number of buckets of popcorn.
Indicate the optimal number of workers per day to use and the corresponding total number of movie tickets to sell (produce). Make sure you indicate how you determined this optimal number of workers and total number of movie tickets.
Sample Solution
In Part 1 of the Unit IV Assignment Worksheet, Tracy is asked to analyze data on total number of buckets of popcorn as well as movie ticket sales produced per day. After completing the two tables in this part of the assignment which calculate the average product, marginal product, total value product, average value product, and marginal value product for both areas, it became apparent that there were diminishing returns with regard to increasing labor inputs when considering each variable. For example, in the Concessions Stand area it was found that while one worker produced an average of 9 buckets/day and a marginal rate or 8 buckets/day; adding a second worker increased productivity by 6 buckets/day (with an avg rate at 15) before decreasing to 5 additional buckets with a third worker (Avg 20). This same pattern can be seen in regards to Value Product when examining Workers 2 & 3.
When looking at Ticket Sales similar trends can also be observed. In terms of Average Productivity we see that two workers are producing more than three when comparing Rates (21 vs 17). However, similar to Concessions production increases significantly between Worker 1 & 2 before declining again with Worker 3’s addition (MP=7 vs MP=4); indicating diminishing returns have taken place once more.
Therefore, based on these findings Tracy would likely benefit most from having either Two or Three workers working in each area respectively whereas Four may not prove as productive given what has been observed thus far regarding Marginal Returns. If she chooses Two then they should produce 46 Buckets & 42 Tickets per day whereas Three will yield 60 Buckets & 51 Tickets respectively.
Finally, if Tracy wishes to further improve efficiency within her theater she may want consider strategies such as implementing technology solutions for ticketing or automated methods for concession preparation where possible alongside other techniques meant to enhance overall customer satisfaction levels which could lead to improved profitability over time.
