Intro To IE
Intro To IE
Very simply,
Productivity = Output
Input
Total-factor Productivity is the ratio of net output to sum of associated labour and captial (factor) inputs.
total-factor productivity = net output / (labour and capital input)
Both the output and input(s) are expressed in real or physical terms by being reduced to constant rupees of a reference
period (base period).
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Example for productivity measure
For a company XYZ, the total inputs and outputs have been converted in to money value and are
given below. calculate total productivity and partial productivity for different categories of inputs.
• Material input= Rs 20,000
• Human input= Rs 30,000
• Energy input= Rs 10,000
• Capital input= Rs 3,00,000
• Miscellaneous input= Rs 50,000
• Total output = Rs 5,00,000
Total productivity = total output/ total input
= 5,00,000/4,10,000 =1.219
Partial productivities
Solution:
First, define the inputs and the outputs for the analysis. Is the proper measure of inputs the number of
nurses or of hours worked? In this case the definition of the input would be total nursing hours. When the
total number of nursing hours worked per nurse is used as the input measure, then the productivity
measures for the two units are:
Total Hours 25
Hours per patient day HPPD A 5
Patient Days 5
Total Hours 16
HPPD B 4
Patient Days 4
COMMON MISUSE OF THE TERM PRODUCTIVITY
XYZ electronic company produced 10000 calculators by employing 50 people at 8 hours/day for 25 days.
This company increased its production to 12000 calculators by hiring 10 additional workers at 8 hours/day
for 25 days.
Effectiveness
• Measures what the system sets out to accomplish (objective) with what was actually
accomplished; plan vs. actual
• Hence, effectiveness is an output measure. (Is the output “right” - right quality, right
quantity, on time, etc.)
Factors Affecting Productivity (1 of 3)
Standardization
Technology
Use of Internet, fax machines, e-mail, computerized billing, software
Searching for lost or misplaced items
Scrap rates
Labor turnover, layoffs, new workers
Safety
Bottlenecks
Factors Affecting Productivity (2 of 3)
Methods
Design of the workspace
Incentive plans that reward productivity
Capacity utilization
Location
Methods Quality
Layout
Inventory
Scheduling Technology Management
Factors Affecting Productivity (3 of 3)
• WWW. GOOGLE.COM
• http://www.iienet2.org
• Buffa E.S., (2009), Modern Production / Operational Management,
John Wiley & Sons.
• Nigel Slack, Stuart Chambers, Robert Johnston., (2010)Operation
Management, Pearson
• R. Danreid & Sanders, (2009), Operations Management, John Wiley &
Sons.
• Panneerselvam. R. (2006), Production/Operations Management,
Prentice Hall of India Pvt Ltd.