The Operational Performance

Question 3

Part (a) Discuss the concepts used in measuring the operational performance of a company and explain why they are important for managing operations.

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[10 marks]

Part (b) A small electronics company operates a single production line producing dashboard cameras for the automotive market. The production line has 5 employees, working 5 days a week for 8 hours a day at £12 per hour and the production line produces 30 dashboard cameras per hour.

The company sells the dashboard cameras for £35 each.

Assume the company sells everything it makes and retains zero finished goods stock.

Table 1. Dashboard Camera Manufacturing Information

Item Details
Number of Employees 5 employees
Working days per week 5 days per week
Working day length (hours) 8 hours per day
Pay rate (£s per hour) per employee £12 per hour
Production rate (dashboard cameras per hour) 30 dash cameras per hour
Sales price per Dashboard camera (£s) £35 per dashboard camera
Raw materials & assemblies cost (£s per week) £20,000 per week
Overheads costs (£s per week) £4,000 per week
Energy cost (£s per week) £200 per week
Planned Downtime (hours per week) 11 hours per week
Unplanned downtime (hours per week) 7 hours per week

Note: all calculations should be per week. Calculate the following:

(i) The Design Capacity of the dashboard camera production line.

(ii) The Effective Capacity of the dashboard camera production line.

(iii) The Achieved Capacity of the dashboard camera production line.

(iv) The Single Factor Productivity:

(a) In dashboard cameras produced per Labour hour and;

(b) In dashboard cameras produced per pound of labour costs.

(v) The Multifactor Productivity for the production line.

(vi) Comment on the Profitability of this business and the sensitivity of the business to improved downtime.

[15 marks]

[Total 25 marks]

 

 

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