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1、,Introduction to Business Jeff Madura,9,Improving Productivity Inadequate quality of work by employees retain or reprimand those employees; Malfunctioning machinery or equipment replace the machinery or make repairs.,933,Methods to Improve Production Efficiency,Production Efficiency: the ability to

2、produce products at a low cost Benchmarking: a method of evaluating performance by comparison to some specified (benchmark) level, typically a level achieved by another company.,934,Methods to Improve Product Efficiency,935,Methods to Improve Product Efficiency,Technology - Automated Tasks are compl

3、eted by machines (less costly) without the use of employees. - The Internet To improve the flow of information and communication,936,Methods to Improve Production Efficiency,Economies of scale Fixed costs. Variable costs. Break-even point Reflects the total quantity of units sold at which total reve

4、nue equals total costs (fixed and variable) and profitability begins. The key measure of production efficiency is the average cost per unit.,937,Relationship between Production Volume and Costs,Exhibit 9.8,938,Relationship between Volume and Profitability,Exhibit 9.9,939,Methods to Improve Product E

5、fficiency,Restructuring - The revision of the production process in an attempt to improve efficiency. - Reengineering The redesign of a firms organizational structure and operations. - Downsizing Cost-saving, but may eliminate job positions; be associated with training; decline morale of the remaini

6、ng employees and result in low quality.,940,Integration of the Production Tasks,Supply Chain The process from the beginning of the production process until the product reaches the customer. A breakdown in one part of the process may cause the entire production process to be slowed. Even service firms use an integrated production process.,941,Learning Goals (revisited),Identify the key resources used for production. Identify the factors that affect the plant site decision. Describe how various factors affect the design and layout decision. Describe the key

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