The paper "Operations & Process Analysis" is an outstanding example of a management assignment. Labor productivity is a measure indicating the output that is productive for an hour within a specified period of time (Krajewski et al. , 2013, p. 37). From the formula of calculating labor productivity, we should have the total output as well as the total productive hours. In this case, Total Output: Here we shall consider the costs incurred in the production of the total units in the one month against the total number of hours worked throughout the one month period. Total Output: 185 each at £ 250 = £ 21250 Total number of input hours per month = 100 x 10 =1000 Labor Productivity = 21250/1000 = £ 21.25 per hour Calculation of the multifactor productivity ration basically entails incorporating the total input costs incurred in the manufacturing process with respect to the total output (Mantel et al. , 2007, p. 68).
In the case of Nick’ s race shop, we shall have as follows: Total output = £ 21250 Inputs: Direct material = 40 x 100 = 4000 Direct labor = 10 x 10 x 100 = 10000 Overheads = 5000 Total Inputs = 19000 Therefore, the multifactor productivity gives 21250/19000 = 1.118 B. ) Let us consider each option: i) Increasing sales by 10%.
This will result to 110% x 250 x 85 = 23375/19000 = 1.23 ii) Increasing efficiency to only 10 defective: 250 x 90 = 22500/19000 = 1.184 iii) Reducing material, overhead, and labor costs by 10%: 21250/ (19000 -1900) = 1.243 From the above calculations, it is quite clear that the third (iii) option will yield the greatest impact on the multifactor productivity of the firm as it provides the largest value for the ratio as compared to the other two available options. C.
Operations management is crucial in optimizing productivity in an organization. As can be observed in Nick’ s Race jacket shop, the various factors involved in the manufacturing process impact on the final productivity of the organization. The primary aim of operation management, therefore, is to make sure that the delicate balance between the factors of production is maintained (Nicholas & Herman, 2008, p. 59). An organization should price its product prudently in the market of it is to maintain financial leverage. Moreover, operations management aids in designing and readjusting input costs accordingly to achieve the desired levels of productivity (Waller, 2003, p. 42).
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