MODIFIED MULTIFACTOR PRODUCTIVITY APPRO
MODIFIED MULTIFACTOR PRODUCTIVITY APPROACH TO
MEASURE PRODUCTIVITY OF OPERATIONS by Balbinder S. Deo (2004)
Compiled By:
Saurabh Deewan(078)
Shivani M. Gupta(082)
Siddhi Agarwal(110)
Introduction
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Motto of an Organization: How can the desired quality product be produced for the least cost?
This fundamental question tightly links the productivity of operations to cost of operations which is “Productivity is the inverse of cost”, if the relationship is described in a formal logic
Managers and other engineering professionals involved with the actual work, generally work on physical resources and most often, they use physical units to measure productivity and to measure the effect of improvements made, with the assumption that the improvements shown in physical productivity measures means improvement in overall productivity of the system and that assumed to mean reduction in the cost of production
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The type of productivity measures that involve physical units of output and physical units of resource inputs, such as quantity of materials as inputs and quantity of units as output, are partial productivity measures and improvements shown in terms of partial productivity measures may not translate in terms of reduction in the cost of production
The possible reason for not using cost as a unit of measure by engineering professionals for measuring productivity may be
– lack of training in cost measurement methods
– lack of appropriate costing methodology designed specifically to meet the information needs of shop floor management
– The available existing methodologies are more appropriate to meet the information needs of higher levels of management as most often they are interested to get the cost information at a plant level and /or at a corporate level
Research Problem
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Managerial professionals tend to measure productivity in terms of units of output per unit $ input basis and multifactor productivity measure is one of the common measures that help
MEASURE PRODUCTIVITY OF OPERATIONS by Balbinder S. Deo (2004)
Compiled By:
Saurabh Deewan(078)
Shivani M. Gupta(082)
Siddhi Agarwal(110)
Introduction
•
•
•
Motto of an Organization: How can the desired quality product be produced for the least cost?
This fundamental question tightly links the productivity of operations to cost of operations which is “Productivity is the inverse of cost”, if the relationship is described in a formal logic
Managers and other engineering professionals involved with the actual work, generally work on physical resources and most often, they use physical units to measure productivity and to measure the effect of improvements made, with the assumption that the improvements shown in physical productivity measures means improvement in overall productivity of the system and that assumed to mean reduction in the cost of production
•
•
The type of productivity measures that involve physical units of output and physical units of resource inputs, such as quantity of materials as inputs and quantity of units as output, are partial productivity measures and improvements shown in terms of partial productivity measures may not translate in terms of reduction in the cost of production
The possible reason for not using cost as a unit of measure by engineering professionals for measuring productivity may be
– lack of training in cost measurement methods
– lack of appropriate costing methodology designed specifically to meet the information needs of shop floor management
– The available existing methodologies are more appropriate to meet the information needs of higher levels of management as most often they are interested to get the cost information at a plant level and /or at a corporate level
Research Problem
•
Managerial professionals tend to measure productivity in terms of units of output per unit $ input basis and multifactor productivity measure is one of the common measures that help