Productivity

Poor productivity problems at Ping’s Pizza

Questions
1. Define the term ‘productivity’ and state how it is calculated. (2 marks)
Productivity is a measurement of the efficiency with which a firm turns production inputs into
outputs, it is calculated by dividing total output by total inputs.

2. Calculate the labour productivity if the five workers work for eight hours each day. (5 marks)
40/ 5*8 = 1 unit per labour hour

3. Discuss three (3) factors that are contributing to poor productivity at Ping’s Pizza. (12 marks)

Technology

● Technology is always changing and improvements are made at regular intervals. This
could offer significant benefits to firms if they are able to make use of such
improvements. The company can only produce a limited amount of pizzas daily “There
are two older-type ovens, with a maximum capacity of 40 pizzas on average per day in
only two sizes” Many successful businesses utilize powerful tools and applications that
enable them to streamline complex workflows and processes. These technologies have
features and capabilities that facilitate repetitive and time-consuming tasks. One of the
benefits of technology is that it enables the firm to increase output even if it is using the
same amount of resources. Improvement in technology can also help the firm to
minimise wastage of resources. It also could improve quality control. With an old oven
they had to manually move pans from lower to higher racks if that affected bake times,
crusts or other aspects of your pies, cakes and breads. With new technology, you can
improve your baking results by using ovens with rotating racks. New and improved
technology can also increase the level of output per unit of input – that is, productivity.

Quality of the labour supply

● The poor productivity of the business was heavily due to the quality of the labour supply.
There are five employees on staff, consisting of two chefs, one cashier and two servers.
This is not enough for high functioning of the business when customers are demanding
pizza. Improvement in output per man is more likely to be achieved where the workforce
is highly skilled and well trained and. The more educated the workforce is, the more
likely it is to improve productivity. The workers were too old school thus not using
toppings that are in demand ultimately allowing the business to have variety in what it
produces. With experience and the requisite ‘know-how’, workers will be able to improve
their individual and collective output while reducing wastage of resources.

Labour–management relations
 ● This refers to the relationship that exists between management and the workforce. A
good relationship can foster improvements in productivity, while the opposite is also true.
The management of the business could have still achieved higher levels of productivity if
he had delegated tasks to the workers in a strategic manner. Knowing this, management
has tried to improve its relationship with the workforce by improving communication and
their level of motivation. This could have been impactful for older workers, in order for
them to know about how the business is doing financially and in what ways they can
help to improve it.

4. Based on the situation facing Ping’s Pizza, discuss two (2) steps that can be taken to improve
overall productivity.

Technological improvements
● Technological improvements are known to improve productivity. With the use of modern
machines and equipment, the firm can help to reduce waste, improve speed and quality
in production and increase the amount of output that is produced from the inputs. The
pizza business needs to get more up to date, fast place ovens and equipment to make
the pizza limiting wastage. This could even enable the firm to make a great amount of
pizza in a day so it can cater to all the customers that demand it, as opposed to previous
times when they lost customers due to slow service. Technology can reduce human
mistakes while adhering to quality standards.

Training
● This can also be a vital way to improve productivity, especially because of the older age
group workers in the business. Training people how to carry out a given task will help to
improve speed, quality and productivity. As workers acquire new skills or better ways of
carrying out their tasks, it is likely that there will be a reduction in waste and an
improvement in work habits. The workers currently at the pizza place are used to a
specific way of making pizza with only a few basic ingredients. These can become
obsolete, hence workers should be trained to have the skill set to prepare things in
demand and at a fast pace if the company should reap the same benefits in terms of
productivity.

(6 marks) Total 25 marks

Fundamentals of marketing graded

Perfect Cut Furniture Ltd
Questions

1. Describe the business concept that was used at the inception of this firm and outline three (3)
implications of such a concept. (8 marks)
Product concept
This concept is said to focus on the product and it is believed that consumers will demand
products that are of high quality, give excellent performance and contain innovative features.
Once the product is perceived to offer better quality and features than existing products it is
believed that consumers will buy it. With this in mind, businesses using this concept focus on
creating products that are superior to others in order to maintain its competitive edge, such a
firm would have to improve its products over time.
For example the apple brand improves on iphones every year in contrast to the zte brand.

Some of the implications of this concept include:

● The product has to be carefully designed and quality must be maintained. This is
important to boost a firm's image and generate loyal customers.
● Firms using this concept have to continuously make improvements to its product in order
to maintain a competitive edge
● There needs to be some amount of promotion to inform the market about the product
and its features. This is to make customers aware of the so-called high quality
characteristics of the product.

2. Citing evidence from the case, discuss three (3) other business concepts that were used. (12
marks)

Production Concept
The production concept is based upon the belief that once the product is made it will be sold.It
also assumes that if the firm can produce large quantities of the product at very low cost, it will
attract consumers to purchase it. Citing evidence from the case “the firm implemented its
B-Quality line which offered the same designs but made from lower-quality materials”.
“This allowed the firm to produce more as the input costs were less for these products
than its high-end line of furniture”. This shows that the firm is now trying to mass produce its
furniture in order to lower production cost from using lower quality material,hence trying to
benefit from economies of scale.

Marketing concept
The marketing concept deals with conducting research to ensure that goods being produced are
what the market is demanding. Citing from the case “With more furniture in stock, the
company had to implement very aggressive promotion tactics geared towards
convincing customers to buy its new line of products and not those of its main
competitors” There had to be a shift of focus towards ascertaining customer needs and the
factors that lead to satisfaction. The marketing concept therefore holds that, in order to achieve
its organisational goals, the firm should ascertain the needs and wants of its potential customers
and fulfil their desired satisfaction more effectively than competitors.

Societal market concept

Societal marketing concept focuses on more than the business profits but also other
stakeholders and the environment on a whole.Organisations are expected to produce goods
that are environmentally friendly. Companies therefore are encouraged to promote social and
ethical considerations in the production and the marketing of their products. Firms using the
societal marketing concept will make a concerted effort not to satisfy the desires and demand of
consumers at the expense of the society citing evidence from the case. “The firm took a very
bold step by launching its ‘Go Green’ campaign”. “It refuses to buy lumber reaped from
protected forestry areas around the country”.

3. Giving two (2) reasons for your answer, discuss which business concept is best suited for
Perfect Cut Furniture Ltd. (5 marks)

The best suitable business concept for Perfect cut Furniture Ltd. is the societal marketing
concept for the company niche of production is based upon trees from the environment. Due to
the firm's operations it could be destroying forest which houses endangered animals. Also, the
cutting down of trees can lead to deforestation which ultimately leads to climate change or soil
erosion. The societal marketing concept would make the business more aware and focused on
the right way to go about its business without making the environment suffer harshly through
planting back trees. This way the business would make its furniture, satisfy its customers, gain
profits and salvage the environment.

Total 25 marks