Lori produces Final Exam Care Packages for resale by her sorority. She is currently working a total of 5 hours per day to produce 100 care packages.
a) What is Loris productivity?
100/5 = 20 packages per hour
b) Lori thinks that by redesigning the package, she can increase her total productivity to 133 care packages per day. What will be her new productivity?
133/5 = 26.6 packages per hour
c) What will be the percentage increase in productivity if Lori makes the change? PX
26.6-20*100/20 = 33 % increase in productivity
Question 2
There are three generic strategies which are applicable to a large variety of situations and contexts. Below are the example of organization which have sustained competitive advantage by competing with the basis of;
a. Cost leadership
b. Response
c. Differentiation
Cost leadership strategy
Cost leadership’s purpose is becoming and remain the least cost producer or distributor in the industry. This company aimed at reduction of input costs and minimizing the operation expenses. This type of least cost producer gain advantage by getting its costs of production lower than other producer in the market. For an example; Kawanku Roti Parata (Malaysian cuisine product). This product have multi choice of food to the customer service with high quality. Moreover, Kawanku makes efficient operation by effective supply chain management and low budget manpower. Another example is; Walmart. Walmart makes the business by lower costs to the customer in the form of lower price. The goods that discounted retain the original profit margin where the same margin as the competitors.
Walmart gain profit by selling low price while maintaining the same profit margin. Therefore, an organization with cost leadership strategy gain the advantage which is not easily followed by others. This, strategy may cause some consequences in dynamic environment as certain expenses may be asking for research cost. However, these expenses need
References: for Business (n.d) Generic Competitive Strategies [Online] Available from http://www.referenceforbusiness.com/management/Ex-Gov/Generic-Competitive-Strategies.html (Accessed November 18 2014) Jay Heizer and Barry Render (2011) “Operations Management” Global Edition, 10th Edition, Pearson Learning Solutions Mott, E. (2014) How Must an Operations Strategy Integrate With Marketing & Accounting. Available from: http://smallbusiness.chron.com/must-operations-strategy-integrate-marketing-accounting-81479.html (Accessed November 19, 2014)