A measure of the output per worker in a given time period.
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Equation for labour productivity
Output per period /Number of employees per period
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Ways in which labour productivity can be increased
1) New technology that speeds up the production process 2) Invest in training 3) Improve working conditions 4) Streamline production process 5) Measure performance and set targets.
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How can an increase in labour productivity benefit a business?
Allow them to increase output without affecting costs. Also allows them to reduce costs without affecting output.
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Name 2 reasons that make businesses cautious about improving labour productivity
The costs of improving labour productivity and because it may conflict with other objectives EG- workers may lose sight of other operational issues such as flexibility, dependability and quality.
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Define unit costs
The average total cost of producing a product.
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Define capacity
The maximum total level of output or production that a business can produce in a given time period. A company producing at this level is said to be producing full capacity.
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What does capacity depend on?
Product demand, flexibility of production lines, seasonality of output, seasonality of demand, implications of failure to meet demand and the opportunities for sub contracted or outsourced production.
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Define capacity utilisation
The % of a firms total possible production level that is being reached. If a company is large enough to produce 100 units a week but only produces 92. Its capacity utilisation is 92%.
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Capacity utilisation equation
Actual output per annum / Max possible output per annum X 100
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Other cards in this set
Card 2
Front
Equation for labour productivity
Back
Output per period /Number of employees per period
Card 3
Front
Ways in which labour productivity can be increased
Back
Card 4
Front
How can an increase in labour productivity benefit a business?
Back
Card 5
Front
Name 2 reasons that make businesses cautious about improving labour productivity
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