Topic—2. Productivity and System Performance. What is Productivity ?. Definition: Productivity--- is the relationship between the output generated and input provided to create this amount of output during the measurement period. (Sink, 1985)
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Productivity and System Performance
Productivity---is the relationship between the output generated and input provided to create this amount of output during the measurement period. (Sink, 1985)
Productivity---is the linkage between resources and results: how efficiently organizational resources are managed in achieving performance objectives. (Groff,1986)
Productivity---is a measure of efficiency and computed as the ratio of output divided by input.
Productivity = output/input
(e.g. 100 units/machine-hour, in
20 customers/teller-hour, in service)
1. aggregate unit
2. dollar sales
3. production volume
1. labor 2. capital
3. raw material 4. energy
labor productivity: output/labor hour
capital productivity: output/capital
TFP=output/all inputs (labor + capita l+
1. cost structure change
2. method of allocating fixed cost change
3. product life cycle length change (shorter)
4. new product innovation rate change (higher)
5. production more dynamic oriented
How to calculate TFP?
Effectiveness—Do the “Right” things
Efficiency---Do things in the “Right” way.
a Production Facility.