Operational Performance

Question 1

What does efficiency mean?

Answer 1

Controlling costs when making goods or services and a good use of time and energy

Question 2

How can you measure the efficiency of a business?

Answer 2

Labour productivity
Unit costs
Capacity
Capacity utilisation

Question 3

What does labour intensive mean?

Answer 3

When labour costs outweigh the capital costs of a business

Question 4

What does labour productivity mean?

Answer 4

The amount of output that is obtained from an employee

Question 5

How would you calculate labour productivity?

Answer 5

Labour productivity = output per period
————————
No. Of employees in that period

Question 6

What can affect high labour productivity?

Answer 6

Quality of machinery, resources etc for staff to use
Skills, motivation and ability of the workforce
The methods of production used
Reliability of raw materials and suppliers

Question 7

How can labour productivity be increased?

Answer 7

Increasing the number of hours worked
Investment in equipment and technology
Changing the way the work is carried out
Motivating employees

Question 8

How is unit costs defined?

Answer 8

The cost of producing one unit of output