The productivity-operations management linkage

Date: 2015-10-07; view: 823.

Productivity is an efficiency concept that gauges the ratio of outputs relative to input into a productive process. Effectiveness relates to the extent to which performance reaches organizational goals. In contrast, efficiency addresses the resource usage (inputs) involved in achieving outcomes (outputs). Productivity is aimed at assessing the efficiency aspect of organizational performance – the ratio of outputs relative to inputs. As such, productivity can be a useful tool for managers because it helps them track progress toward the more efficient use of resources in producing goods and services.

Organizational productivity is often measured by using this equation:

An approach, like this one, that considers all the inputs involved in producing outputs is sometimes referred to astotal-factor productivity. Managers also usepartial-factor productivity, a productivity approach that considers the total output relative to a specific input, such as labor. For example: