Question

The Production Process and Costs 03 LEARNING OBJECTIVES ter completing this chapter, you will be able to: 11 Explain alternative ways of measuring the productivity of inputs and the role of the manager in the production process. 2 Calculate input demand and the cost-minimizing combination of inputs and use isoquant analysis to illustrate optimal input substitution. Calculate a cost function from a production function and explain how eco- nomic costs differ from accounting costs. LO4 Explain the difference between and the economic relevance of fixed costs, sunk costs, variable costs, and marginal costs. LO5 Calculate average and marginal costs from algebraic or tabular cost data and illustrate the relationship between average and marginal costs. LO6 Distinguish between short-run and long-run production decisions and illus- trate their npact on costs and economies of scale. LO7 Conclude whether a multiple-output production process exhibits economies of scope or cost complementarities and explain their significance for mana- gerial decisions. adLINE eing Loses the Battle but Wins the War nearly eight weeks, Boeing and its International Association of Machinists and space Workers Union (IAM) reached an agreement that ended a strike involving O workers. The strike followed several days of "last minute," around-the-clock talks nont and union negotiators failed to reach an agreement over

LO1 LO6 LO7

Answer 1

Answer 1 :-

Alternative ways to measuring the productivity of inputs and the role of the manager in the production process are discussed below:-

Part 1 :- Alternative ways to measuring the productivity :

Productivity is a measure of the ability to produce a good or service. Productivity also is defined as an index that measures output like goods and services relative to the input such as capital, labor, materials, energy, etc.

Productivity can be expressed mathematically as ;

Productivity = units of output / units of input There are two major ways to increase productivity, one is increase the output and other is decrease the input.

Organizations can use this formula in many ways to measure the productivity of the inputs like labor productivity, machine productivity, capital productivity and energy productivity. And a productivity ratio can be calculated for a single operation, a department, a facility or for whole organization.

A productivity measure illustrates that how well the resources of an organization are being used to produce from inputs.

The productivity is a relative measure, for it to be meaningful or useful it must be compared to something it could be similar firms, other departments within the same firm, or against past productivity data for the same firm or department.

Total productivity index = total output / total input

= Total production of goods and services / (Labor + capital + material + energy)

Part 2 :- The role of manager in the production processes are as follows :-

• Define productivity and direct behavior related to the productivity
• Monitoring performance and provide feedback
• Productivity analysis, particularly the examination of trends and identify problems and take corrective measures
• Facilitate planning and control related to costs, time, output rate, and resource usage to allow decision making with respect to pricing, production scheduling, purchasing, contracting, delivery scheduling etc.
• Productivity analysis, together with other elements of a competitive strategy.
• Support innovation for the continuous improvement efforts.

(Note : Dear Students, As per the Chegg Guidelines, I'm not allowed to answer than one question)