Name: Mendoza, Jochel Zeeb Section: BA220
Course & Year: BSMA-2 Date: June 11, 2023
CHAPTER 16
MANAGING PRODUCTIVITY AND MARKETING EFFECTIVENESS
Productivity is defined as the output to input ratio.
𝑂𝑢𝑡𝑝𝑢𝑡
𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = 𝐼𝑛𝑝𝑢𝑡
A productivity metric can be either operational or financial in nature:
𝑂𝑢𝑡𝑝𝑢𝑡 𝑢𝑛𝑖𝑡𝑠
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = 𝐼𝑛𝑝𝑢𝑡 𝑢𝑛𝑖𝑡𝑠
𝑃 𝑜𝑢𝑡𝑝𝑢𝑡
𝐹𝑖𝑛𝑎𝑛𝑐𝑖𝑎𝑙 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = 𝑃 𝑖𝑛𝑝𝑢𝑡
PARTIAL PRODUCTIVITY
The link between the output and one or more of the needed input resources employed in
creating the result is measured as partial productivity. The greater the ratio, the better.
# 𝑜𝑓 𝑢𝑛𝑖𝑡𝑠 𝑜𝑟 𝑣𝑎𝑙𝑢𝑒 𝑜𝑟 𝑜𝑢𝑡𝑝𝑢𝑡 𝑚𝑎𝑛𝑢𝑓𝑎𝑐𝑡𝑢𝑟𝑒𝑑
𝑃𝑎𝑟𝑡𝑖𝑎𝑙 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = # 𝑜𝑓 𝑢𝑛𝑖𝑡𝑠 𝑜𝑟 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑎 𝑠𝑖𝑛𝑔𝑙𝑒 𝑜𝑟 𝑝𝑎𝑟𝑡 𝑜𝑓 𝑡ℎ𝑒 𝑖𝑛𝑝𝑢𝑡 𝑟𝑒𝑠𝑜𝑢𝑟𝑐𝑒𝑠
A partial operational productivity is the quantity of an input resource that is required to
generate one unit of output, whereas a partial financial productivity of an input resource is
the number of units or the value of output made for each peso spent on the input resource.
Illustrative Problem 16-1: Partial Productivity
1
, Press Tool Company
Operating Data for XOX
(Pesos In 000’s)
20X4 20X5 % Inc. (Dec)
Units of XOX manufactured and sold 8,000 9,600
Total sales @ P500 P4,000 P4,800 20%
Direct materials
20X4: 50,000 x P24/lb. 1,200
33%
20X5: 64,000 x P25/lb. 1,600
Direct labor
20X4: 8,000 x P40/hr. 320
25%
20X5: 8,000 x P50/hr. 400
Fixed factory overhead and other operating 600 600 -
expenses
Operating income P1,880 P2,200 17% (unfavorable)
The manufacturing costs include total fixed factory overhead and other operating expenses
of P300,000 per year and variable manufacturing costs consisting of metal alloy (direct
materials and direct labor-hours).
Analysis:
The decrease in operating income is due to a greater-than-proportional increase in the firm's
variable expenses for direct materials and direct labor.
𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡𝑠 20𝑋4: 1, 200 + 320 = 1, 520
𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡𝑠 20𝑋5: 1, 600 + 400 = 2, 000
2,000−1,520
𝑇𝑜𝑡𝑎𝑙 𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡𝑠 = 1,520
= 0. 315 𝑜𝑟 32%
2
Course & Year: BSMA-2 Date: June 11, 2023
CHAPTER 16
MANAGING PRODUCTIVITY AND MARKETING EFFECTIVENESS
Productivity is defined as the output to input ratio.
𝑂𝑢𝑡𝑝𝑢𝑡
𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = 𝐼𝑛𝑝𝑢𝑡
A productivity metric can be either operational or financial in nature:
𝑂𝑢𝑡𝑝𝑢𝑡 𝑢𝑛𝑖𝑡𝑠
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = 𝐼𝑛𝑝𝑢𝑡 𝑢𝑛𝑖𝑡𝑠
𝑃 𝑜𝑢𝑡𝑝𝑢𝑡
𝐹𝑖𝑛𝑎𝑛𝑐𝑖𝑎𝑙 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = 𝑃 𝑖𝑛𝑝𝑢𝑡
PARTIAL PRODUCTIVITY
The link between the output and one or more of the needed input resources employed in
creating the result is measured as partial productivity. The greater the ratio, the better.
# 𝑜𝑓 𝑢𝑛𝑖𝑡𝑠 𝑜𝑟 𝑣𝑎𝑙𝑢𝑒 𝑜𝑟 𝑜𝑢𝑡𝑝𝑢𝑡 𝑚𝑎𝑛𝑢𝑓𝑎𝑐𝑡𝑢𝑟𝑒𝑑
𝑃𝑎𝑟𝑡𝑖𝑎𝑙 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦 = # 𝑜𝑓 𝑢𝑛𝑖𝑡𝑠 𝑜𝑟 𝑐𝑜𝑠𝑡 𝑜𝑓 𝑎 𝑠𝑖𝑛𝑔𝑙𝑒 𝑜𝑟 𝑝𝑎𝑟𝑡 𝑜𝑓 𝑡ℎ𝑒 𝑖𝑛𝑝𝑢𝑡 𝑟𝑒𝑠𝑜𝑢𝑟𝑐𝑒𝑠
A partial operational productivity is the quantity of an input resource that is required to
generate one unit of output, whereas a partial financial productivity of an input resource is
the number of units or the value of output made for each peso spent on the input resource.
Illustrative Problem 16-1: Partial Productivity
1
, Press Tool Company
Operating Data for XOX
(Pesos In 000’s)
20X4 20X5 % Inc. (Dec)
Units of XOX manufactured and sold 8,000 9,600
Total sales @ P500 P4,000 P4,800 20%
Direct materials
20X4: 50,000 x P24/lb. 1,200
33%
20X5: 64,000 x P25/lb. 1,600
Direct labor
20X4: 8,000 x P40/hr. 320
25%
20X5: 8,000 x P50/hr. 400
Fixed factory overhead and other operating 600 600 -
expenses
Operating income P1,880 P2,200 17% (unfavorable)
The manufacturing costs include total fixed factory overhead and other operating expenses
of P300,000 per year and variable manufacturing costs consisting of metal alloy (direct
materials and direct labor-hours).
Analysis:
The decrease in operating income is due to a greater-than-proportional increase in the firm's
variable expenses for direct materials and direct labor.
𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡𝑠 20𝑋4: 1, 200 + 320 = 1, 520
𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡𝑠 20𝑋5: 1, 600 + 400 = 2, 000
2,000−1,520
𝑇𝑜𝑡𝑎𝑙 𝑣𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝑐𝑜𝑠𝑡𝑠 = 1,520
= 0. 315 𝑜𝑟 32%
2
