BUAD 341 1st Edition Lecture 2 Outline of Last Lecture I The study of operations management II Goods and Services Outline of Current Lecture III Productivity measures IV Importance of productivity V Impact of productivity Current Lecture A 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 13 500 Inputs Human Material Capital 3 000 153 10 000 These 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 number Partial Measure finished units energy 10000 540 18 52 Importance 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 manufacturer
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