Transforming inputs into outputs - productivity measures, Operation Management

Assignment Help:

Transforming Inputs into Outputs - Productivity Measures

As will become clearer during the course of this chapter, a more quantitative definition of productivity cannot easily be given, since both the measures of achievement and the objectives of the organisation will have a major impact on the way and means by which productivity is measured. For these reasons, the definition of productivity used throughout will be output(s)/ input(s). This is illustrated as a systems diagram in the following figure.

756_Transforming Inputs into Outputs - Productivity Measures.png

To the politician productivity means money to spend on roads and hospitals; to the economist it is a comparative measure of the health, vitality and competitive strength of an economy; to an operations manager it is a comparative measure of improvement.  Productivity is important to everyone. We should constantly seek increases, so that the economy of the nation will continually produce an improving standard of living for all citizens.  The increase in gross national product in the US has increased around 1.7 per cent per annum for the past 10 years. For some Asian economies the increase was as high as 5 per cent. The productivity increase of 1.7 per cent according to Heizer and Render (2001) was due to a mix of inputs which contributed the following proportions: 

  • Capital contributed 38 per cent of the 1.7 per cent growth in the economy
  • Direct labour contributed 10 per cent of the 1.7 per cent growth in the economy
  • Management contributed 52 per cent of the 1.7 per cent growth in the economy

 

Measuring productivity is an effective way of determining a country's ability to improve living standards. Also, increasing productivity is the only way that labour and capital can achieve greater financial benefits. Productivity is a significant issue for all societies and one which operations managers must address. 

Despite varying individual perceptions of the concept, by the end of this chapter there should be little doubt in your mind that productivity is a critical issue to all not only within organisations but also nations, and that efficient operations can play a large role in the improvement of productivity. 

The major constituents are further broken down: 

  • Capital: level of capital investment and cost of capital
  • Labour: basic education and skills; diet and motivation; labour availability
  • Management: education and supply

 

From this breakdown it is clear that management makes a very significant contribution to a nation's GDP. The factors of greatest significance are education and supply. In a knowledge society change is brought about by people who are well educated and motivated who are given the opportunity to bring about improvements in their society. This analysis suggests that if countries wish to lever their productivity, then the education and training of management is their prime goal closely followed by the availability of capital and a conducive environment.


Related Discussions:- Transforming inputs into outputs - productivity measures

Explain what is statistical process control, What is Statistical Process Co...

What is Statistical Process Control? What are the advantages and disadvantages of SPC? Identify two or three applications in your organization that could benefit from Statistical P

Explain how the ebq change if the set-up costs is reduced, How would the EB...

How would the EBQ change if the set-up costs were reduced by 50 percent, and the holding costs were reassessed by 40 percent, taking account of the opportunity costs of capital at

Explain major reasons why companies adopt total quality, Discuss the three ...

Discuss the three major reasons why companies adopt total quality. Also, discuss the initial key steps are involved in the adoption process.

Draw a diagram of the factory and finding the maximum rate, Factory is a ba...

Factory is a bathtub with 50 gallons capacity, drain is outlet to market and can output 3 gallons per hour. Faucet is raw material input and allows materials in at a rate of 4 gall

Find probability that the store is full, A drug store has two windows avail...

A drug store has two windows available for serving customers, who arrive at a Poisson rate of 40/hr. Service time is exponentially distributed with a mean of 2 min. Only one window

Simulation, Which of the following distributions cannot be simulated a) U...

Which of the following distributions cannot be simulated a) Uniform b) Poisson. c) Normal. d) All of these can be simulated.

What are the types of the workforce flexibility, What are the types of the ...

What are the types of the workforce flexibility? Types of workforce flexibility: a. Functional flexibility (task flexibility or multi-skilled employees) b. Financial f

Explain what does it mean to be a risk-tolerant organization, What does it ...

What does it mean to be a risk-tolerant organization? How does that relate to the level of creative that is likely to develop in an organization?

Explain internal environment of an organization, Identify and comment on tw...

Identify and comment on two stakeholders in the internal environment of an organization.

Explain what are the two possible outcomes if this is done, It is generally...

It is generally not appropriate to apply control charts to the same data that were used to derive the mean and limits. Why? What are the two possible outcomes if this is done, how

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd