Productivity:
Productivity Partial measures output/(single input) Multi-factor measures output/(multiple inputs) Total measure output/(total inputs)
Slide 3:
Measures of Productivity Partial: Output/Labor Output/Machine Output/Energy Multifactor: Output/(Labor+Machine) Output (Labor+Energy) Total: All outputs / All inputs
Example:
Example 10,000 Units Produced Sold for $10/unit 500 labor hours Labor rate: $9/hr Cost of raw material: $5,000 Overhead expenses: $25,000 What is the labor productivity?
Example--Labor Productivity:
10,000 units/500hrs = 20 units/hour or we can arrive at a unitless figure (10,000 unit* $10/unit)/(500hrs* $9/hr) = 22.22 Can you think of any advantages or disadvantages of each approach? Example--Labor Productivity
Example--Multifactor Productivity:
Example--Multifactor Productivity MFP = Output Labor + Materials MFP = (10,000 units)*($10) (500)*($9) + ($5000) + ($25000) MFP = 2.90
Factors Affecting Productivity:
Factors Affecting Productivity Capital Quality Technology Management
Improving Productivity:
Improving Productivity Develop productivity measures Determine critical operations Develop methods for productivity improvements Establish reasonable goals Get management support Measure and publicize improvements Don’t confuse productivity with efficiency
Competitiveness:
Competitiveness Quality Price Time Flexibility Differentiation