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CMA Intermediate · Operations Management and Strategic Management · Productivity Management and Quality Management

A Pune plant produced 12,000 units in a month using 4,000 labour hours. In the next month it produced 13,500 units using 4,500 labour hours. What is the percentage change in labour productivity?

Labour productivity was 3 units per hour in both months (12,000/4,000 and 13,500/4,500), so there is no change. Output rose 12.5%, but labour hours rose by the same proportion, so output per hour stayed constant.

  1. AIncrease of 12.5%
  2. BNo changeCorrect
  3. CDecrease of 10%
  4. DIncrease of 3.0%

Explanation

Month 1 productivity = 12,000/4,000 = 3 units per hour. Month 2 = 13,500/4,500 = 3 units per hour. Hence no change. The 12.5% figure is the rise in output alone (1,500/12,000), ignoring that labour hours also rose by 12.5%.

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