From the course: Operations Management Foundations
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The importance of productivity
From the course: Operations Management Foundations
The importance of productivity
- As a manager, your boss and the investors are counting on you to do a good job, but what does that mean? Think about it. What exactly is your job? You're a manager, but what exactly are you managing? You're managing resources, and for what reason? Well, you're expected to use those resources to create outputs, products, and services. So, while most of us think it's our job to make the company profitable, that's only sort of true. Yes, without profits, there is no company, but as a manager, my more immediate goal, the goal that will make my bosses happy, my goal is to be productive. My bosses want productivity. What's productivity? Much like value can be expressed as a ratio, productivity is probably best understood by this formula. Productivity equals what did we make divided by what did it cost us to make it. What did we make is typically the value of all the items produced. What did it cost us is typically the…
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