Analysing operational performance

Question 1

What does labour productivity measure? (equation required)

Answer 1

measures output of employee and how productive the workforce is.

Question 2

What is meant by the unit costs(avg cost) and what is its equation?

Answer 2

unit cost takes into account the total costs of a busines(FC+VC) and divides it by the total output

Equation:

total cost of production / number of units produced

Question 3

What is capacity utilisation and what is the equation for it?

Answer 3

Capacity utilisation measures the exisiting output as a percentage of the maximum possible output.

Question 4

What is meant by the capacity of prouction?

Answer 4

its the maximum output a business can produce over a period of time given the resources avaliable