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Production Operations Management - Lecture 4

Workforce productivity is measured by dividing total output by total work hours. It refers to how much output a worker can produce in a given period of time. Output is measured in dollars earned from goods and services produced, while work hours include all hours spent producing that output. Productivity can then be calculated as output per work hour. Multiple factors beyond just work hours can impact productivity, such as technology, materials costs, and selling prices. Productivity compares total outputs to total inputs used in production.

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30 views11 pages

Production Operations Management - Lecture 4

Workforce productivity is measured by dividing total output by total work hours. It refers to how much output a worker can produce in a given period of time. Output is measured in dollars earned from goods and services produced, while work hours include all hours spent producing that output. Productivity can then be calculated as output per work hour. Multiple factors beyond just work hours can impact productivity, such as technology, materials costs, and selling prices. Productivity compares total outputs to total inputs used in production.

Uploaded by

Hassan Elbayya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Prepared by Dr.

Walid Abouzeid

Production & Operations


Management- Lecture 4
Defining Workforce productivity:

 Workforce productivity or worker


productivity is the amount of goods and
services that a worker produces in a given
amount of time. It is one of several types
of productivity that economists measure.
Defining Workforce productivity:
(continued)
 Worker productivity refers to the amount of
output produced per work hour. In other
words, the calculation is:
Productivity = output / work hours
Measuring worker’s productivity

 Output is generally measured in dollars,


though, within a company, it might also be
measured in terms of units of a specific item
produced divided by the hours required to
produce those specific units.
Measuring worker’s productivity:
(continued)
 So, if you made 10 toys and sold them for
$200 each, and it took you 5 hours to make
each toy, this is how you would calculate your
productivity:
 Output in dollars = 10 toys x $200 each =
$2,000
 Work hours = 5 hours x 10 toys = 50 hours
 Productivity = $2,000 / 50 hours = $40 per
hour
What Factors Impact Productivity?

 Productivity measures total output over work


hours, but hours are not the only input into
producing the measured goods and services.
Capital, such as new production equipment,
improvements in technology, costs of
materials, and selling price of items produced
all impact the output that can be produced
per work hour.
Productivity Equation:

Productivity = Outputs / Inputs


Example of the productivity
equation:
Given the below table, What is the labor
productivity in hours for each car type?
The answer:

What is the labor productivity in hours for


each car type?

 BMW: (4,000 cars / 20,000 Hours) = 0.2


Cars / Hour
 Mercedes-Benz: (6,000 cars / 30,000 Hours)
= 0.2 Cars / Hour
Measuring labor productivity in
dollars:
What is the labor Productivity in Dollars?
 BMW: [(4,000 * $8,000) / (20,000 * $12)] =
$133.33 / Car
 Mercedes-Benz: [(6,000 * $9,500) / (30,000 *
$14)] = $135.71 / Car

 So,based on the data set above, it appears that


Productivity by Hours, both Car X and Car Y are the
same; but, Productivity by Dollars, Car X is cheaper
to make given the labor hours and hourly rate.
Any Questions?

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