BUAD 341 1st Edition Lecture 2 Outline of Last Lecture I. The study of operations managementII. Goods and ServicesOutline of Current Lecture III. Productivity measuresIV. Importance of productivityV. Impact of productivity Current LectureA fundamental measure of performance is productivity measures. These are relative measures which mean a measurements needs to be compared to historical data or it has no meaning.-Partial productivity measures: -Total productivity measures: -Multifactor productivity measures: An example problem:Outputs:- Finished units - $10,000- WIP - $2,500- Dividends - $1,000- Total Output - $13,500Inputs:- Human - $3,000- Material - $153- Capital - $10,000These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- Energy - $540- Other Expenses - $1,500- Total Input - $15,193 Productivity:Total Measure= total output/total input. 13500/15193 = .89**compare this number to historical data or the industry numberPartial Measure = finished units/energy. 10000/540 = 18.52Importance of Productivity - According to Robert Reno (Newsday columnist) - More than anything, productivity determines how well we eat, how many appliances we can stuff in our homes, how many luxuries we can afford,... Productivity allows wages to grow without igniting inflation.- According to John Cunniff (Associated Press) - If you had to single out just one explanation for the economic good times of the past decade, you could not go wrong by choosing productivity. Other explanations played mainly supporting roles.An example of the impact of productivity: An automotive study shows (2000), For subcompact cars made in the US, pretax profit per vehicle ranged from $1,464 (Honda) to -$163-Why is this? Differences in labor efficiencies, capital efficiencies and quality: Labor hours/per car in assembly ranged from $17.73 (Toyota Corolla) to $38.16 for some similar subcompacts. Capital cost ranged from $552 dollars per vehicle (Honda) to $1,694 for another
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