GMS 401 Lecture Notes - Lecture 2: Cost Leadership, Man-Hour, Vertical Integration
10 Nov 2018
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Class two: how effectively an organization meets the wants and needs of customers relative to others that offer similar goods or services, organizations compete through some combination of their marketing and operations functions. How can these customer needs best be satis ed. Productivity: the ratio of outputs (goods and services) divided by one or more inputs (such as labour capital, or management, ef ciency means doing the job well with a minimum of resources and waste. Why productivity matters: high productivity is linked to higher standards of living. As an economy replaces manufacturing jobs lower productivity service jobs, it is more dif cult to maintain high standards of living higher productivity relative to the competition leads advantage in the marketplace. Pricing and pro t effects: for an industry, high relative productivity makes it less likely it will be supplanted by foreign industry. Productivity: outputs = goods and/or services produced by the operations system (measured in units or $ )
