P7 - Anprod - The Objectives Matrix OMAX
P7 - Anprod - The Objectives Matrix OMAX
P7 - Anprod - The Objectives Matrix OMAX
Matrix
OMAX
Dewi Hardiningtyas, ST., MT., MBA.
Industrial Engineering Department, University of
Brawijaya
indicate
New Machine
Production rate
100 parts/man-hour
120 parts/man-hour
$5/man-hour
$5/man-hour
Labor productivity
100/5 = 20 parts/$
120/5 = 24 parts/$
24/20 = 1.2
$40/man-hour
$60/man-hour
Machine productivity
120/60 = 2 parts/$
2/2.5 = 0.8
totaltangible
output
TotalProductivi
ty
totaltangible
input
Total tangible output = value of finished
units produced
+ value of partial units
produced
+ dividends from securities
+ interest from bonds
+ other income
OUTPUT
Outputs
(tangible)
Finished
units
produced
Partial units
produced
For sale
For sale
For internal
use
For internal
use
Dividends
from
securities
Interest
from bonds
Other
income
Inputs
(tangible)
Human
INPUT
Workers
Capital
Fixed
Material
Working
Energy
Other
expense
Raw
materials
Oil/Gas/Coal
Travel
Purchased
parts
Water
Taxes (local,
city, state,
federal)
Electricity
Professional
fees
Managers
Land
Inventory
Professionals
Plant
(buildings)
Cash
Staffs
Machinery
Accounts
receivable
Marketing
Tools and
equipment
Notes
receivable
R&D - IS
General /
office admin
expenses
Advantages of TPM
It provides both aggregate (firm-level) and detailed (operational unit-level) productivity
indices
It points out which operational units are profit making and which are not.
It shows which particular input resources are being utilized inefficiently so that
corrective action can be taken.
Product i
Tangible
output in
period t
Oit
Total productivity
in period t
TPit = Oit / Iit
Oit
Oit
Oit
TPit
Iit
Iijt IiHt IiMt IiCtIiEt IiXt
j
{j} = {H, M, C, E, X}
H = human input
Firm
Tangible
output in
period t
OFit
Total productivity
in period t
TPFit = OFit / IFit
OFit = Oit
Firm
IFit = Iit
Produc
t1
Produc
t2
Produc
t3
Produc
ti
Oi
PPij
Iij
Wij
i = product type
W = weight corresponding to the input
Iij
ij
factor j
PP = partial productivity
TP = total productivity
Function
of Total Productivities of
Individual Products
TPF
W TP
i
Oi
TPi
Ii
{j} = {H, M, C, E, X}
i = product type
W = weight corresponding to the input
Ii
Wi
IF
factor i
TP = total productivity
TPF = total productivity firm
W PP , forallj
TPF
ij
ij
{j} = {H, M, C, E, X}
Oi
PPij
Iij
Wij
i = product type
W = weight corresponding to the input
Iij
ij
factor i
PP = partial productivity
TPF = total productivity firm
Profit per
product type
Profit firm
Homework
Given the following data for two type of products.
Calculate profit per product type and profit firm !
PRODUCT 1
Inputs :
- Human $4000
- Material $5000
- Fixed Capital $1800
- Working Capital $200
- Energy $600
- Other expense $400
Output $ 12,000
PRODUCT 2
Inputs :
- Human $3500
- Material $4500
- Fixed Capital $2300
- Working Capital $400
- Energy $800
- Other expense $400
Output $ 15,000
Thank you