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

Decision tree analysis applied to capacity expansion, Decision Tree Analysi...

Decision Tree Analysis Applied to Capacity Expansion Linear programming and computer simulation models focus on the short term question of how to use existing capacity. But the

Explain legal and ethical behaviour in marketing, Describe the difference b...

Describe the difference between legal and ethical behaviour in marketing. Give an example of each as it pertains to marketing

Explain what do you think make up the concept, What do you think make up th...

What do you think make up the concept, package and process for the adventure playground?

#, what do you understand by "line balancing"? what happens if balance dose...

what do you understand by "line balancing"? what happens if balance dosen''t exist?

Explain guidelines on discrimination because of religion, Inez Garcia was b...

Inez Garcia was born in Portland, Oregon. Her mother is from Italy and Jewish. Her father is Mexican. Under the Guidelines on Discrimination Because of Religion or National Origin,

Explain decision alternatices and various levels of demand, The following p...

The following payoff table provides profits based on various possible decision alternatices and various levels of demand at Amber Gardner's software firm

Explain what is the yield to maturity on this bond, Plasma TV Corporation b...

Plasma TV Corporation bonds are currently priced at $1,088. They have 12 years until maturity and a coupon rate of 6%. What is the yield to maturity on this bond?

Explain manager able to overcome your resistance, Managers, think back to a...

Managers, think back to a time when a manager announced a change that you, the employee, did not want to adopt. What was the reason(s) for your resistance to change? Was the manage

Decision tree, #questionSpencerville Products is expanding its operations w...

#questionSpencerville Products is expanding its operations west of the Mississippi. Its first step is to build a manufacturing facility in Denver to satisfy demand on the West Coa

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