A construction supervisor for a large homebuilder is interested in seeing whether there are ways of improving the profitability of the company through making better use of the people and equipment that are used to construct homes.
Respond to the following:
Research the construction industry to learn what the inputs are that are used by such a homebuilder to build homes (the homes are obviously the output that is being produced by the homebuilder). Be sure to include some inputs that are not strictly labor (in other words, include things that are pieces of equipment or resources other than people).
Give at least two examples of what a partial productivity statistic would be for some of the inputs that you identified.
Give an example of something that would cause the partial productivity of a particular input to be reduced.
Give an example of something that could be done to improve the partial productivity of some particular input.
Describe how the overall productivity of the homebuilder would be calculated. In other words, how could the total productivity of all inputs be incorporated in a total productivity calculation?
Full Answer Section
- Permits and fees: This includes the permits and fees that are required to build the home.
Examples of partial productivity statistics for homebuilders
- Labor productivity: This could be measured as the number of square feet of framing that is completed per hour per worker.
- Equipment productivity: This could be measured as the number of cubic yards of dirt that is excavated per hour per excavator.
- Materials productivity: This could be measured as the number of square feet of siding that is installed per hour per worker.
Causes of reduced partial productivity
- Poor weather: Bad weather can cause delays in construction, which can reduce productivity.
- Equipment breakdowns: If equipment breaks down, it can cause delays in construction and reduce productivity.
- Material shortages: If materials are not available when they are needed, it can cause delays in construction and reduce productivity.
- Lack of training: If workers are not properly trained, it can reduce productivity.
- Poor management: If construction projects are not well-managed, it can lead to delays and reduced productivity.
Ways to improve partial productivity
- Improve weather planning: Construction projects can be planned to minimize the impact of bad weather.
- Maintain equipment: Regular maintenance of equipment can help to prevent breakdowns.
- Plan for material deliveries: Materials can be ordered and delivered in advance to avoid shortages.
- Provide training to workers: Workers can be trained on the latest construction techniques and best practices.
- Improve project management: Construction projects can be managed more efficiently to reduce delays and improve productivity.
Calculating overall productivity
The overall productivity of a homebuilder can be calculated as follows:
Overall productivity = Total output / Total input
Where:
- Total output is the number of homes built in a period of time.
- Total input is the total cost of all inputs used to build the homes, including labor, equipment, materials, land, and permits and fees.
This is a total productivity measure because it takes into account all of the inputs that are used to produce the homes.
Example:
A homebuilder builds 100 homes in a year. The total cost of all inputs used to build the homes is $10 million. The overall productivity of the homebuilder is calculated as follows:
Overall productivity = 100 homes / $10 million = 10 homes / $1 million
This means that the homebuilder produces 10 homes for every $1 million of inputs used.
Conclusion
By understanding the inputs that are used to build homes and how to improve the productivity of those inputs, homebuilders can improve the profitability of their businesses.
Sample Answer
Inputs used by homebuilders to build homes
The following are some of the inputs that are used by homebuilders to build homes:
- Labor: This includes the workers who build the home, such as carpenters, plumbers, electricians, and roofers.
- Equipment: This includes heavy machinery such as bulldozers, excavators, and cranes, as well as smaller tools such as hammers, saws, and drills.
- Materials: This includes lumber, concrete, bricks, shingles, and other materials that are used to build the home.
- Land: This is the land on which the home is built.