4.2 Operational Performance Flashcards
Formula for unit costs
Total costs / output
What is labour productivity
The volume of output produced by each employee
Formula for labour productivity
Output / number of staff
Productivity (per worker) formula
Total output per time period / number of employees at work
4 Factors influencing productivity
The amount of capital (tools and machines able labour to increase output)
Technology (improvements in productivity and reduction in unit costs)
Human capital (skilled workforces produce more but require more investment)
Organising resources more efficiently (poor organisation reduces productivity)
Formula for efficiency
Total costs / total output
How to improve efficiency
Outsourcing
Relocating
Invest in new Tech
Redesign
Lean production - reduce waste
Improve capacity utilisation
What is labour intensive
Higher human intervention eg. Services , people onsite
What is capital intensive
Relies heavily on automation and machinery - relatively small labour input
