Operations Management Question: Utilization, efficiency, and productivity: The operations manager creates an 8 hour shift with a 30 minute lunch and two 10 minute breaks, one in the morning and...
Operations Management Question: Utilization, efficiency, and productivity:
The operations manager creates an 8 hour shift with a 30 minute lunch and two 10 minute breaks, one in the morning and one in the afternoon. With personal bathroom and other breaks, such as stretching, the manager feels the workers actually put in 7 hours of productive time in the shift.
The manager uses 3 workers to switch the connectors. After each shift each worker on average produces 58 sets of 20 connectors.
Calculate the utilization, efficiency, and productivity.
Will the owner be satisfied?
These three terms can be calculated from the definitions of each one.
Utilization will generally be the quotient of time spent in operation over total time available. In the business settings I've seen it used (call center), break time was not taken into account, but that might depend on your class. So, I calculate utilization as follows:
U = T(productive) / T(available)
U = 7 hours / (8 hours - 30 min - 2*10 min)
U = 7 / 7.17
U = .976 = 97.6%
Productivity is a bit trickier here. Generally, productivity is thought of output over input, and we certainly want that number to be higher rather than lower. However, considering there are so many things that can be put into the "input" or "output" boxes, it's hard to see here what specifically you are going for. It looks like you have your input defined as the three workers * 1 shift (7.17 hours of available time), and your output is defined as 58 sets of 20 connectors. You could then calculate productivity as follows:
P = 58 sets / 3 worker shifts
P = 19.3 sets / worker shift
P = 2.7 sets / worker hour
Efficiency is going to be a bit more difficult without context. You need to have a baseline, as the calculation is as follows:
E = Output (actual) / Output (standard)
Without a standard output, we can't be sure of our efficiency!