Question 1. A company has gathered the following financial information for itself and a competing firm. They wish to compare productivity for the two firms (all numbers in 000s).
Firm A Firm B
Labor $30,000 $16,000
Plant and equipment 200,000 150,000
Energy 17,500 20,500
Materials 200,000 180,000
Sales 1,200,000 900,000
a. Compute partial and total factor productivity measures for Firms A and B.
b. What is the picture you get of the two firms?
c. What would you suggest to the management for Firm B?
Question 2. For the Firms in problem 1, you have been asked to make a report to the management of Firm A. What are some of the caveats relating to accounting practices that you would include in the report? What numbers should be interpreted cautiously.
Question 3. For the data in Problem 1, suppose that Firm B is a foreign firm. What additional caveats would you place on interpretation of the data?
Marketing Manufacturing Supply
Engineering Chain
Aerospace 4.8 12.5 10.0
Automotive 8.5 5.0 6.0
Communications 11.6 11.8 20.0
Components 3.0 2.4 5.5
Computer 5.0 8.0 12.5
Electromechanical 6.3 6.0 10.0
Electronic Subsystems 4.2 4.5 8.0
Heavy Mechanical 6.0 9.0 9.0
Instrumentation 7.5 4.8 6.1
Light Assembly 2.8 2.5 3.3
Medical 3.8 4.0 13.4
Cross Industry 4.9 6.0 8.2
Above are industry comparisons of the percent of sales spent on salaries for marketing employees, manufacturing engineering employees and supply chain employees for several different industries. Rank these industries by the amount spent in each of the areas and report your findings to the management. What can you infer from your findings about each of the industries?
Question 4: Using the data from problem above, suppose you are a computer company who spends 9% on marketing staff, 6% on manufacturing engineering, and 8% on supply chain staff. Comparing your expenditures with the above averages, what would you recommend to management? What more information would you want?
Question 5: Recently, a medical office administered the SERVQUAL survey to its customers as a way to determine where it should focus the process improvement. Forty surveys were administered to customers before and after they were treated. On the basis of the 40 responses, averages were computed for each item. Using the averages in the table above, compute dimension averages. Based on your findings, which dimensions should be emphasized?
Item Perception Average Expectation Average Differences
1 5.5 2.3 3.2
2 5.4 2.4 3.0
3 5.9 2.2 3.7
4 5.8 2.8 3.0
5 3.2 3.2 0
6 4.4 4.1 0.3
7 4.3 5.3 -0.1
8 2.5 4.9 -2.4
9 4.6 5.6 -0.1
10 6.2 3.4 2.8
11 6.5 3.2 3.3
12 6.6 3.4 3.2
13 6.8 3.6 3.2
14 3.1 3.2 -0.1
15 4.5 3.3 1.2
16 3.3 3.4 -0.1
17 3.1 3.2 -0.1
18 3.2 3.5 -0.3
19 1.6 6.5 -4.9
20 1.8 6.6 -4.8
21 1.5 6.4 -4.9
22 1.4 6.3 -4.9
Also perform a two-dimensional differencing analysis. Do your results differ from your answer in the previous question?