Operations Management and Productivity
In reviewing the case study – the calculations are a bit frightening and well upon further review they don’t need to be, simply because production or productivity change was quite easy to determine. Since C. A. Ratchet (the local auto mechanic) typically takes 2 hours to diagnose and fix a typical problem he is only diagnosing and fixing 4 vehicles/problems over a typical 8hr day. It would be in Mr. Ratchet’s best interest to purchase the computer trouble-shooting device that will speed up this process by one hour.
The overall impact of the on his productivity is a positive one in that he will increase his productivity substantially. In order to determine his productivity change his current productivity needs to be calculated. In a typical 8 hour day divided by 2 hours per problem = 4 problems per day. If he purchases this computer trouble-shooting device his new productivity will be calculated using a 7-hour day. The reason for this is because 1 hour is allocated to adjusting the computerized diagnostic device daily. Therefore, 7 hours a day divided by 1 hour per problem = 7 problems per day. Now in utilizing the formula provided of Productivity Change = (New productivity - Current Productivity) / Current Productivity we can see that the productivity change is increased by 75%. The calculation is determined as follows:
Current: 8 hours per day/2 hours per problem = 4 problems per day
New: 8 hours per day – 1 hour for adjusting = 7 hours per day
7 hours per day/1hour per problem = 7 problems per day.
Productivity Change: 7 problems per day – 4 problems per day = 3.
3/4 = .75 or 75%. Therefore, Mr. Ratchet should most certainly purchase this device, as it will increase his overall productivity. In fact, by doing so he will not only be increasing productivity but also contributing to some other aspects of operations management and productivity as a whole. In other words he will be adding to