Decision making to improve operational performance- 4.2 Flashcards
How to calculate labour productivity?
Total output/number of employees
How to calculate unit costs (average costs)?
Total costs / Total output
How can managers influence labour productivity?
Changing the way they train employees or how they reward staff.
How can managers influence unit costs?
Consider what suppliers they use, resources, how to make operations processes more effective and how to reduce waste. Although, have to consider knock on effects.
What is capacity utilisation?
Measures existing output as percentage of maximum possible output. The higher the capacity utilisation, the more resources being utilised.
How do you calculate capacity utilisation?
Existing output / maximum possible output X 100
Why is data useful in operational decision making?
You can identify problems or opportunities. Allowing you to analyse different courses of action. For example, low labour productivity’s cause can be identified and you can then consider what to do such as more training required or bonuses.
