3.4.2 Analysing Operational Performance Flashcards
what are the four types of operational data
labour productivity
unit costs
capacity
capacity utilisation
what is labour productivity
output per worker
how efficient labour is
if its low, managers can analyse to identify cause
may consider necessary training, review reward systems or change the system
what is the labour productivity equation
total output / number of employees
what influences labour productivity
training and skills of workforce
motivation
complexity of product
capital equipment available
what is labour intensive
skill of the worker relies on more than machinery or equipment
what is capital intensive
involves more machinery than people to produce goods
what is unit cost equation
total cost / total output
what is unit cost
cost per make a single product
if higher, managers can analyse cause
suppliers costs, low labour productivity, high defect levels
negotiate with suppliers for lower prices
what is important about unit costs
allows business to lower prices leading to more competition and securing higher market share
enjoy larger profit margins
high profit margin means the business doesn’t need huge revenue to be successful
what is capacity
measures the maximums it can produce given its existing resources
acquiring more resources by a bigger premises or quality improvements
outsourcing and temporary staff to increase capacity
what is capacity utilisation equation
(actual output / maximum output) x 100
how can Ryanair reduces costs
Reduce ice on board
Remove toilets from planes
Eliminate co pilots
Passengers load own luggage
Remove all seats- standing only
Charge for everything
