Concept explainers
a)
To determine: The multifactor productivity for last year.
Introduction: Multifactor productivity is an evaluation of economic performance that compares the amount of products and services produced to the amount of combined inputs used to produce those products and services.
b)
To determine: The multifactor productivity for the current year.
Introduction: Multifactor productivity is an evaluation of economic performance that compares the amount of products and services produced to the amount of combined inputs used to produce those products and services.
c)
To determine: The percentage change in productivity for the monthly average last year versus the monthly average this year.
Introduction: Productivity is a measure of the effectiveness of an individual, systems, machinery and other equipment that are used in converting inputs into outputs. In all organizations, productivity is an important determinant to know cost efficiency.
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Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
- SUPPOSE THAT You are hired as an operations manager for an organization which is having some problems, and you are supposed to help them to put things back on track. In order to do so, there are a number of decisions you have to take regarding the following issue: Productivity: You found that the productivity is declining the past two years at your organization. Measure the multifactor productivity for the current period and compare it to the previous period. Comment on your results showing what might lead to decreasing the productivity and show how can you improve the productivity at your organization. You are supposed to estimate the all the needed numbers.arrow_forwardFactors that may influence the measurement of productivity are a. quality. b. external elements, like the general state of the economy. c. definition of "productivity" in terms of what to measure. d. all of the above. e. all of the above except b.arrow_forwardA-Calculate the total productivity measure for this company for both years B-calculate the partial productivity measures for labor, capital, and raw materials for this company for both yearsarrow_forward
- "We are already measuring total factor productivity. Measuring partial productivities would be of no value." Do you agree? A. Yes, total factor productivity is the goal of the measurement. Once achieved there is no need for further analysis. B. Yes, partial productivity measures should only be calculated if you cannot calculate total factor productivity. C. No, total factor productivity and partial productivity measures work best together because the strengths of one offset weaknesses in the other. D. No, you must always calculate partial productivity measures for the total factor productivity to have any meaning.arrow_forwardanswer all the questions below You have just been given the following production reports as a new manager of a company; January February March April Units Produced 230 1,800 2, 800 3,000 Hours Per Machine 325 200 400 320 No of machines 3 5 4 4 What percentage of production is February production? If you are to forecast for May using four month simple moving average, what would be your forecast Determine the average productivity unit for the first three months. Determine the average productivity units per machine.arrow_forwardAccording to the Bureau of Labor Statistics, during the first quarter of 2015 nonfarm business productivity in the United States fell 3.1 percent and manufacturing productivity fell 1.0 percent compared to the first quarter of 2014. During this same time, real GDP in the United States increased by 2.9 percent. Explain how productivity can decrease when real GDP is increasing.arrow_forward
- As part of the Department of Labor Statistics, you are assigned the task of evaluating the improvement of small businesses. Data for one of the small businesses are shown below. The data are monthly average of last year and monthly average of this year. Last Year This Year Production (dozens) 1,500 1,500 Labor (hours) 350 325 Capital Investment ($) 15,000 18,000 Energy (BTU) 3000 2700 Labor: $10.00/hr. Capital: 6% per month of Investment Energy: $0.75 per BTU. Determine the labor productivity in labor dollars for last year and this year. Determine the multifactor productivity for last year and this year. Determine the percentage change in productivity for last year versus this year.arrow_forwardA furniture manufacturing company working on a 40 hour per week basis makes 100 chairs. The sales price is €70 each, and the company has the following costs:• Direct materials €700• Direct labor €300• Overhead €500a) Calculate the productivity of the company.b) What will be the new productivity if the company decides tomake 135 chairs per week?c) If the company decides to improve productivity throughmaterials costs reduction only, how much these costs mustbe reduced in order to achieve a 10 percent increase in totalproductivity?d) If the company repeats the same exercise as in (c) above, butthrough labour costs reduction, how much these costs mustbe reduced in order to achieve a 10 percent increase in totalproductivity?arrow_forwardAnswer the following Question:You are hired as an operations manager for an organization (Choose an organization that you prefer) which is having some problems, and you are supposed to help them to put things back on track. In order to do so, there are a number of decisions you have to take regarding the following issues:1- Productivity: You found that the productivity is declining the past two years at your organization. Measure the multifactor productivity for the current period and compare it to the previous period. Comment on your results showing what might lead to decreasing the productivity and show how can you improve the productivity at your organization.2- Forecasting: You discovered that the forecasting error falls beyond the acceptable ranges in the past three years. Make a reliable forecast for the demand on your product/service using at least 10 periods of your historical data to forecast the demand for the coming 5 periods. Then compute the MAD for these 5 periods. 3-…arrow_forward
- Explain the meaning of the saying that productivity is a relative measure briefly .arrow_forwardA shoe factory produces 95,000 shoes each week. The equipment used costs $15,000 and will remain productive for three years. The labor cost per year is $16,000. What is the productivity measure of “units of output per dollar of input” averaged over the three-year period? Hint: Productivity = total units produced divided by the total labor cost plus total equipment costarrow_forwardGiven the following information, calculate the multifactor productivity in terms of revenue per multifactor cost. (In other words, use money in the numerator and denominator.)Units produced: 5,000Standard price: $30/unitLabor input: 500 hoursCost of labor: $25/hourCost of materials: $5,000Cost of overhead: 2x labor costA) State the formulaB) Determine the unit of measure for the numeratorC) Determine the unit of measure for the denominatorD) Calculate ProductivityD) Interpret the resultsarrow_forward
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