Productivity Measurement

In: Business and Management

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Productivity measurement
Productivity is a measure of output from a production process per unit of input.

Productivity is a measure of the effective use of resources, usually expressed as the ratio of output to input.

Productivity is the value of outputs produced (Goods & Services) divided y the value of input resources. It is the quantitative relationship between what we produced and the resources used.
So in shortly we can say:
Productivity =
In general sense productivity is an economic measure of efficiency that summarizes the value of outputs relative to the value of inputs used to create them.

In economic sense, productivity is a measure of production output per unit of production input. This refers, to the ratio of output and input in the production process.

Importance of Productivity

1. Productivity is an important device for comparison of performance for various organizations.
2. Productivity increases the rate of low cost per unit and results in lower price.
3. Education, Research and Development, technology are positively correlated to productivity
4. reduction of poverty
5. It helps companies in measuring their strength and weakness.
6. it helps to know the contribution of different input factor used in conversion process
7. it is an indicator of how well the factors the production are utilized
8. it is an indicator of competitive position of an organization
9. it partially determines the peoples standard of living within a particular country
10. it is a valuable device for bargaining with trade unions

Factors affecting Productivity:

All the factors which are related to input and output components of a production process are likely to affect productivity. These are:

• physical-organic, location, and technological factors;
• cultural belief-value and individual attitudinal, motivational and behavioral factors;
•…...

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