Professional Documents
Culture Documents
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Process
The economic system transforms inputs to outputs
Outputs
$oods and Ser%ices
(hat is Producti%ity)
Producti%ity is a common measure of ho* *e!! resources are ein# used or a measure of the effecti%e use of resources usua!!y e+pressed as the ratio of output to input
Productivity =
Output Input
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(a#es increased
/%era#e *or'er0s annua! cash compensation increased
27000 26000 25000 24000 Year A Year B Year C Year A Year B Year C
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"easures of Producti%ity
Partial measures
Output Labor Output Output Machine Capital Output Energy
Multifactor Output Output measures Labor + Machine Labor + Capital + Energy Total measure
Goods or Services Produced ll inputs used to produce them
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Uti!ity p!ant
E+amp!e 6
7898 Units Produced So!d for :6;68<unit Cost of !a or = :6,888 What is the multifactor productivity?
So!ution 6
"&P @ Output La or A "ateria!s A O%erhead 27898 units3B2:6;683 :6888 A :>?8 A :?888
"&P @
"&P @ ?;?8
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E+amp!e ?
>,>88 Units Produced So!d for :C><unit >88 !a or hours are used Cost of !a or= :?><hr Cost of ra* materia!= :>,888 Cost of o%erhead= ? + !a or cost What is the labor productivity?
2-12 What is the multifactor productivity?
So!ution ?= La or Producti%ity
>,>88 units<>88 hours @ 66 units<hour Or *e can arri%e at a unit!ess fi#ure= 2>,>88 unitsB:C><unit3<2>88 hours B :?><hr3 @6>;9
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"&P @
"&P @ 9;>?
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E+amp!e C
You ha%e Dust determined that your ser%ice emp!oyees ha%e used a tota! of ?988 hours of !a or this *ee' to process >E8 insurance forms; Last *ee' the same cre* used on!y ?888 hours of !a or to process 9F8 forms; (hich producti%ity measure shou!d e used) /ns*er= Cou!d e c!assified as a Partia! "easure; Is producti%ity increasin# or decreasin#) /ns*er= Last *ee',s producti%ity @ 9F8<?888 @ 8;?9, and this *ee',s producti%ity is @ >E8<?988 @ 8;?C; So, producti%ity has decreased s!i#ht!y;
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Producti%ity $ro*th
Productivity !rowth Current productivity - Previous productivity 100% Previous productivity
Producti%ity $ro*th is a 'ey factor in a contry,s rate of inf!ation and the standard of !i%in# of its peop!e
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E+amp!e 9
La or producti%ity on the /GC assem !y !ine *as ?> units per hour in ?88E; In ?887, !a or producti%ity *as ?C units per hour; (hat *as the producti%ity #ro*th from ?88E to ?887)
Productivity !rowth
#% - #$ 100% = "% #$
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Gott!enec' Operation
&achine &achine '1 '1 &achine &achine '# '#
10+hr
10+hr
%0+hr
Ser%ice Producti%ity
Typica!!y !a orHintensi%e as in teachin# &re4uent!y indi%idua!!y processed 2doctors3 Often an inte!!ectua! tas' is performed y professiona!s 2medica! dia#nosis3 Often difficu!t to mechani1e or automate 2haircut3
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