Certified Production & Operations Manager (POM) Practice Exam

What is the recommended approach to improve productivity?

1. Increasing outputs while maintaining inputs

2. Decreasing inputs while holding outputs steady

3. Implementing advanced technology

4. Outsourcing production to third parties

The correct answer is: Decreasing inputs while holding outputs steady

The recommended approach to improve productivity is to decrease inputs while holding outputs steady. This method illustrates an efficient use of resources, emphasizing the ability to produce the same quantity of goods or services with fewer resources, such as labor, materials, or capital. By achieving the same level of output with less input, the organization can lower costs and improve overall efficiency, which directly contributes to enhanced productivity. In this context, maintaining outputs while reducing inputs aligns with the productivity formula, which considers the ratio of outputs produced to inputs used. This approach is often sought after in operational strategies as it can lead to increased profitability and competitive advantages. Increasing outputs while maintaining inputs may seem beneficial at first glance; however, it does not address how effectively resources are used and may lead to overstretching capabilities without improving productivity metrics. Implementing advanced technology can enhance productivity but is typically a broader strategy that may not guarantee immediate improvements without proper integration and training. Outsourcing production to third parties can also lead to productivity gains but involves complexities in management, quality control, and potentially hidden costs, which may not always result in an increase in productivity. Thus, the most straightforward and effective approach highlighted is to focus on reducing the input used for a given output, which is a core principle in productivity