Productivity

Question 1

Productivity

Answer 1

The relationship between inputs and outputs

Question 2

Productivity formula

Answer 2

Inputs / outputs

Question 3

Labour productivity

Answer 3

The volume of output or value produced by each employee

Question 4

Importance of labour productivity

Answer 4

Labour costs = significant part of total costs

Question 5

What would lower labour costs mean for unit costs?

Answer 5

Lower labour costs = lower unit costs

Question 6

Importance of productivity to business + stakeholders

Answer 6

1) lower labour costs —> reduce selling price to inc comp adv or inc profits
2) products produced quicker —> inc comp adv bc customers get products quicker + inc delivery time
3) help competitiveness in international market
4) pay off debts bc costs failed —> please creditors
5) encourage investment

Question 7

Methods of improving productivity

Answer 7

• monitoring
• target setting
• investing in technology
• rewarding jobs + job rotation —> keep engaged
• asking work enjoyable
• training
• ergonomic factory layout
• division of labour
• financial + non financial methods of motivation

Question 8

Other ways of measuring productivity

Answer 8

1) output / number of employees and machines
2) sales revenue / number or value of machines
3) sales rev / wage bill or no. of employees
4) capacity utilisation - the % of total capacity that is actually being achieved in a given period - actually being used
capacity utilisation = (actual output / max potential output) x100