chapter 16 Flashcards
productivity measure thst includes all input resources used in production is a
total productivity
productivity formula
output/ input
among the benefits that higher productivity brings about to business firms are
1 competitive advantages
2 higher than average returns, earnings
3 attainment of long-term success
a productivity measure that includes all input resources used in production is
total productivity
it is the required physical amount of an input resource to produce one unit output
partial operational productivity
it is an input resource which is the number of units or the value of output manufactured for each peso spent on the input resource
partial finanancial productivity
advantages of partial productivity measures
1 allows managers to focus on the use of a particular input
2 easily interpreted by all within the organization and are easy to use for assessing productivity of performance of operating personnel
3 for operational control, the standard for performance are very often short term - easy tracking
limitations of partial productivity analysis
1 measures only input and output relationship. it ignores other factors that could affect productivity
2 ignores any effect that changes in other production factors have on productivity
3 ignores the effects that changes in the firm’s operating characteristics have on the productivityof input resource
benefits of total productivity measures
-measures the combined productivity of all operating factors
-decreases possibility of manipulating some of the manufacturing factors to improve productivity
limitations of total productivity measures
1 executives at operational level may have difficulty linking financial productivity measures to their day-to-day operations
2 basis for assessing changes in productivity could vary over time
3 ignore the effects of changes in demand for the product, changes in sp of the goods and services and special purchaing and selling arrangements on productivity
managing marketing effectiveness will enable to accomplish the ff:
1 earn the projected operating income
2 attain the desired and budgeted market share
3 adapt to market change
it is the difference between the actual peso amount received from all the units sold and the peso amount the firm would have received has the firm sold these units at the budgeted selling price per unit
sales price variance
the difference between the budgeted CM for the actual total units sold and the budgeted CM for the budgeted units
sales volume (activity) variance
a variance which it is of a product of the difference between the actual and budgeted sales mix
sales mix variance
it measures the effect on the contribution margin and operating income due to the deviation of actual total sales units from the budgeted total units
sales quantity variance
