A U.S. company has two manufacturing plants, one in the United States and one in another country. Both produce the same item, each for sale in their respective countries. However, their productivity figures are quite different. The analyst thinks this is because the U.S. plant uses more automated equipment for processing while the other plant uses a higher percentage of labor. Explain how that factor can cause productivity figures to be misleading. Is there another Way to compare the two plants that would be more meaningful?
Answer to relevant QuestionsWhile it is true that increases in efficiency generate productivity increases, it is possible to get caught in an "efficiency improvement trap- Explain what this means.Contrast the use of MAD and MSE in evaluating forecasts. Contrast design capacity and effective capacity. What is group technology?In what ways can the location decision have an impact on the production system?
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