Productivity Measurement and Improvement Quiz

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Questions and Answers

Which of the following represents a new trend in operations management?

Long-term supplier relationships

Standardized production techniques

Mass customization (correct)

Focus on local sourcing

What is the total cost of the old system?

$800/day

$1040/day (correct)

$640/day

$400/day

What is the primary goal of productivity improvement?

Improve the ratio of outputs to inputs (correct)

Enhance product variety

Increase production costs

Reduce the use of labor

What is the payroll cost of the new system?

$640 + $800/day Signup and view all the answers

What is the new multifactor productivity?

0.0097 titles/dollar Signup and view all the answers

How many titles does the new system produce per day?

14 titles/day Signup and view all the answers

Which of the following methods was NOT mentioned as a time-saving improvement at Starbucks?

Implementing a digital ordering system Signup and view all the answers

In the context of productivity, which is true about production?

Production only reflects output without considering efficiency. Signup and view all the answers

What factors contribute to the annual productivity increase in the U.S. economic system?

Management, labor, and capital Signup and view all the answers

Which new trend in operations management reflects a focus on sustainability?

Environmentally sensitive production Signup and view all the answers

What is the old multifactor productivity calculated as?

0.0077 titles/dollar Signup and view all the answers

What is the increase in overhead cost when moving to the new system?

$400/day Signup and view all the answers

What percentage of the 2.5% annual productivity increase is attributed to management?

52% Signup and view all the answers

Which statement accurately describes just-in-time performance?

It is about reducing waste by receiving goods only as needed. Signup and view all the answers

Which of the following is a measure of process improvement?

Productivity Signup and view all the answers

How does the new system's productivity compare to the old system's productivity?

The new system is more productive. Signup and view all the answers

What was the effect of not requiring signatures on credit card purchases at Starbucks?

Increased yearly revenue per outlet by $200,000 Signup and view all the answers

Which variable cost per unit was used for the machines' analysis?

$10 Signup and view all the answers

What term describes the ratio of units produced to labor-hours used?

Single-factor productivity Signup and view all the answers

What is a common issue affecting productivity measurement?

Changes in quality despite constant inputs Signup and view all the answers

How many staff members are working under the old system?

4 Signup and view all the answers

If the projected annual demand is between 580 and 660 units, which option should the manager choose?

Purchase 2 machines Signup and view all the answers

What is required for improvements in the standard of living according to the content?

Productivity increases Signup and view all the answers

What formula represents the total dollar sales for multi-product break-even analysis?

BEP$ = FC / ∑[(1 - Vi / Pi) x Wi] Signup and view all the answers

How much time was saved per drink due to the new ice scoop size at Starbucks?

14 seconds Signup and view all the answers

Which factor contributes the most to the annual increase in productivity?

Management Signup and view all the answers

What was the overall improvement in productivity with the enhancements made by Starbucks?

27% Signup and view all the answers

What is the break-even point in units for a single machine with a fixed cost of $9,600, selling price of $40, and variable cost of $10?

320 units Signup and view all the answers

What was the productivity calculation based on the labor productivity example provided?

4 units per labor-hour Signup and view all the answers

What percentage of the annual increase in productivity is attributed to capital?

38% Signup and view all the answers

How many seconds were saved per shot with the new espresso machines?

12 seconds Signup and view all the answers

How many pies need to be sold to break even if the fixed costs are $6,000 and the selling price per pie is $7 with a variable cost of $2?

1,200 pies Signup and view all the answers

What will be the loss if 1,000 pies are sold given the fixed costs of $6,000, selling price of $7, and variable cost of $2?

$1,000 Signup and view all the answers

To achieve a profit of $4,000, how many pies must be sold?

2,000 pies Signup and view all the answers

Which variable is NOT considered a key factor for improved labor productivity?

Increased manufacturing capacity Signup and view all the answers

In the context of service productivity, what is a significant challenge?

Difficult to mechanize Signup and view all the answers

What is the break-even point for two machines with fixed costs of $15,000?

500 units Signup and view all the answers

Which factor is recognized as a contributor to increased productivity in terms of labor?

A supportive diet Signup and view all the answers

External elements can cause changes in productivity. What could these elements include?

All of the above Signup and view all the answers

Which of the following accurately describes service productivity?

Often focused on individual tasks and attributes Signup and view all the answers

Study Notes

Measurement Problems

Quality of inputs and outputs may change while the quantity remains constant
External elements may impact productivity
Precise units of measure may be lacking

Productivity Variables

Labor contributes about 10% to the annual increase in productivity
Capital contributes about 38% to the annual increase in productivity
Management contributes about 52% to the annual increase in productivity

Key Variables for Improved Labor Productivity

Basic education is crucial for the workforce
Diet of the labor force influences their performance
Social overhead needs to support labor availability
Maintaining and enhancing skills are essential with evolving technology

Investment and Productivity

There is a positive relationship between investment and productivity
As investment increases, productivity increases

Service Productivity

Services are typically labor-intensive
Services often focus on unique individual attributes or desires
Services are often intellectual tasks performed by professionals
Services are often difficult to mechanize
Services are often difficult to evaluate for quality

New Trends in OM

Global focus is a growing trend in operations management
Just-in-time performance is increasingly adopted
Supply chain partnering is becoming more common
Rapid product development is sought after
Mass customization is a new trend
Empowered employees are key to success
Environmentally sensitive production is a critical factor
Ethics are increasingly important

Productivity Challenge

Productivity is the ratio of outputs (goods and services) to inputs (resources such as labor and capital)
The objective is to improve productivity
Production is a measure of output only, not efficiency

The Economic System

The U.S. economic system transforms inputs to outputs
The U.S. economic system averages a 2.5% annual increase in productivity
Capital, labor, and management contribute to this productivity increase

Improving Productivity at Starbucks

A team of analysts identifies ways to save time
Improvements have resulted in an average 4.5% annual increase in productivity
Increased productivity has led to increased revenue per outlet for Starbucks

Productivity

Productivity is a measure of process improvement
Productivity represents output relative to input
Increased productivity is essential for improving our standard of living

Productivity Calculations

Labor productivity is measured as units produced divided by labor-hours used
Single-factor productivity considers only one resource input
Multi-factor productivity considers multiple resource inputs

Collins Title Productivity

The company implemented a new system to improve productivity
The new system resulted in an increase in titles processed per day
The new system resulted in a higher multifactor productivity value

Break-Even Analysis

The break-even point is where total revenue equals total costs
The break-even point can be calculated for multiple products
The break-even point can be used to determine the required sales volume to achieve a desired profit
Step costs require calculating break-even points for each range of output
A multi-product case requires calculating a weighted average break-even point

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Description

Test your knowledge on the key variables influencing productivity in various sectors. This quiz covers aspects such as labor, capital investment, and the impact of education and health on workforce efficiency. Challenge yourself to understand the intricate relationship between inputs and outputs in productivity.