Case 1: Pristine Oil Company

Benz the production manager of Pristine Oil believes that the productivity of his unit increased
since the time he assumed the position three years ago. According to the latest raw data prepared by his
secretary Bevs, the output last year 2017 increased to 680 barrels. Aside from the increase in the
production over the three-year period, his department generated additional employment for the
community. They hired 40 regular workers in the plant. In addition, they were able to maintain the
number of units required in hauling coconut meat.

2015 2016 2017 P per unit (optional)

Output 600 650 680 550
Energy 200 220 312 8
Chemicals 15 15.7 17 55
Labor units 33 38 40 500
Hauler 8 8 8 0.33
Inventory cost 11 12 13 15

However, Benz's unit supervisor is doubtful on the claim that their unit's productivity increased.
He approached Benz and expressed his doubts. Benz asked the supervisor to run the figures and make a
report.

1. Compute the productivity reports the company’s output and input.

Using Prodman App, the raw data from Pristine Oil Company’s was analyzed for past three year’s
production. Table 1 shows the Company’s productivity reports output and input.

Table 1. Productivity Reports of Pristine Oil Company’s output and input.

MBA 201 Production and Marketing Management 1

2. Compute the period to period ratio

Table 2 shows the periodic comparison of the Company’s capital output and input by representing how the
percentage increases / decreases per variable.

Table 2. Periodic Comparison of capital input-output

Period to period ratios

2016 2017 remarks
Energy 0.985 0.738 decreased
Chemicals 1.035 0.966 decreased
Labor units 0.941 0.994 decreased
Hauler 1.083 1.046 decreased
Inventory cost 0.993 0.966 decreased
Multifactor 1.142 1.084 decreased

Table 3. Period to period productivity ratios for year 2016-2017

3. Conclude the result of the computations.

To conclude, Table 3 summarizes the period to period productivity ratios for year 2016-2017, this supports
the supervisor’s doubt that Pristine Oil Company’s productivity (as figures revealed) is actually decreasing.
Benz, the production manager is wrong about his assumption.

MBA 201 Production and Marketing Management 2