3.4 Business Flashcards
What is operations data?
Measures performance of business.
What is the Labour productivity formula?
Output per period / Number of employees.
A factory has 15,000,000 output per unit and has the amount of 48 workers, what is the labour productivity?
15,000,000 / 48 = 312.5
What is unit costs formula?
Total costs / output units of output.
If a shoe manufacturer has makes 500 pairs of shoes and the firms total costs are 35000 what is the cost?
35000/500 = 7.00
Capacity Utilisation formula?
The actual output/capacity x 100
JT Co’s fixed overheads of £600,000 a month pay for a maximum capacity of 200,000 units. Variable costs are £2 per unit, the selling price is £8 and current demand is for 120,000 units.
120,000/200,000 x 100 = 60
Explain the use of data in operational decision making and planning
-Identify patterns and problems to find solution improve efficiency.
-Help know business in terms goals and opportunities.
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What is the importance of Capacity utilisation? (1)
Increase efficiency as more materials used.
Decrease wastage —> Decrease Unit costs.
What is the importance of Capacity utilisation (2)
Decreased unit costs —> Decreased price —> Increased price.
(Helpful in competitive market)
What is the importance of labour productivity? (1)
It allows Business to be more efficient and profitability as it is linked to labour productivity.
What is the importance of labour productivity? (2)
It allows business to remain competitive as it reduces unit costs down.
What ways to improve Labour productivity
Measure performance and set targets.
Improve working conditions
Invest in employee training
What Problems trying to improve Labour productivity? (1)
Employee demand higher pay for improved productivity (Impact labour cost per unit)
Labour intensive Process features
Labour costs higher then capital
Mainly variable costs
Quantity and quality are key issues. (E.g Hotels, farming, Hairdressing)
