GMS 401 Chapter Notes - Chapter 2: Strategic Business Unit, Market Environment, Vertical Integration

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Better quality, higher productivity, lower costs, and the ability to respond quickly to customer needs are more important than ever and the bar is getting higher. A good manager never pays overtime wages for any reason because they should always be in control of production scheduling. High productivity is linked to higher standards of living: as an economy replaces manufacturing jobs with lower productivity service jobs, it is more difficult to maintain high standards of living, increase in productivity increases standards of living. Higher productivity relative to the competition leads to competitive advantage in the marketplace: pricing and profit effects. For an industry, high relative productivity makes it less likely it will be supplanted by foreign industry. Outputs = goods and/or services produced by the operations system (measured in units or $) Inputs: single input/single factor (e. g. , labor, materials, capital, time, multiple input/multifactor (e. g. , labor + materials, in $, all inputs/total factor (total system productivity, in $)

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