Productivity

Concepts
Productivity is the efficiency and therefore the
power of inputs to produce.
Productivity is measured as output per unit of
input.
Productivity = Q/I
where: Q=output, I=input
Average productivity is the efficiency of inputs taken
as a whole and is measured as their average
output.(as illustrated above)
Marginal Productivity is the efficiency of additional
inputs and it is measured as their marginal output.
Marginal Productivity= Q/ I
Advantages
Productivity improvement means more
output per unit as the increase in the
efficiency ratio(Q/I) indicates. It means also
as less input for output as the decrease in
the ratios inverse(I/Q) indicates.
Therefore, efficiency is not a matter of size.
A bigger plant is not necessarily more
efficient than its smaller counterparts. To
use a simple analogy, a class may be best
the rest in a school fund drive by soliciting
members. But the most efficient class has a
biggest amount solicited by every member
which reflects on individual initiative.
Productivity is not an end but means to
compete and survive in the free market.
The profitable improvement in overall
resource efficiency in the foregoing is
categorized as an increase in economic
efficiency. This form of efficiency is
measured as output per monetary unit of
input with latter expressed as monetary
cost in the basic productivity ration(Q/I).
Therefore, economic efficiency balances
or reconciles the effects of two other
types of productivity.
 Relative Resource Efficiency
Production Resources complementary
not only in function but also efficiency.
A better machine also enables its
operator to work faster or the other
way around. Resources do not become
more internally efficient at the same
time, but every improvement
contributes to the overall productivity
picture.
Basic ways of Improve Resource
Efficiency

1.Change the nature of the resource

through innovation.
2.Change the external condition of
resources.
3.More balanced resource
combination.
4.Using resource saving technology.
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