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Productivity Vs Efficiency

The document discusses the differences between efficiency and productivity. Efficiency is a ratio of output to expected output, while productivity takes efficiency and also factors in equipment utilization and defects. Productivity compares the combined efficiency of workers and equipment. It is calculated as a ratio where the denominator can be any significant input like labor, materials, power. Productivity compares overall performance between similar operations or industries.

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Anjali Khanna
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159 views1 page

Productivity Vs Efficiency

The document discusses the differences between efficiency and productivity. Efficiency is a ratio of output to expected output, while productivity takes efficiency and also factors in equipment utilization and defects. Productivity compares the combined efficiency of workers and equipment. It is calculated as a ratio where the denominator can be any significant input like labor, materials, power. Productivity compares overall performance between similar operations or industries.

Uploaded by

Anjali Khanna
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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while going thru the answer sheets of the test I find that 100% ANSWERS ARE WRONG those

who have attempted have got it wrong totally

--efficiency is the measure expressed in % and it is a ratio of output divided by input ( expected output) --productivity is also the ratio of output divided by input but expressed in terms of a number or a fraction Efficiency generally indicates the speed of a human being if he is fast or slow or a mediocre: If there are 3 workers working on identical machines and identical products and the expected output is 100 pieces per hour One produces 80 pieces second one 95 and the third one 105 so we say the third one is most efficient The efficiency generally compares the workers based on their output in unit time --But if the first one has produced 5 defective pieces , second one 10 defective pieces and the third one 15 defective pieces --The productivity of first one is 0.75 second one also 0.85 and the third one 0.9 it is assumed that the defective pieces will be rectified and rework cost will be incurred Productivity compares the efficiency of the equipment combined with the efficiency of the workers , the efficiency of the equipment is dependent on the design of the equipment, how robust is the design There are weakly designed equipments which breakdown often and thereby the production of the equipment goes down. The worker may be highly efficient but he can do very little if the equipment keeps breaking down, so in such cases the productivity of the equipment goes down. --Hence productivity is a combination ( multiplication) of workers efficiency and equipment's utilisation. If the worker is 100% efficient but the machine runs for only 50 % of the available time the productivity will be 0.5 if the worker is 80% efficient and machine runs for 50% of time the productivity of the machine would be 0.8*0.5= 0.4 The machine may not run 50% of the time for any reason like power not available, finance not available to buy RM, maintenance of the plant, accident, breakdown etc

Productivity also compares similar industries: --for examples if one bank has a revenue of 100 crores and has 100 employees the productivity is 1 crore revenue generated per employee --another bank has revenue of 300 cr and has 150 employees, the productivity is 2 crore revenue per employee --if there are two steel plants making 3000 MT per month each but first one has a power bill of 1 crores and the second one has the power bill of 1.5 crores, then we say the first one has higher productivity as they are using power more efficiently While comparing productivity, the denominator can be any of the inputs like material, money, labour, power etc. For comparing productivity any one significant input is selected as denominator. hope the matter is clear now, I want students to understand the concept and write the explanation in their own words. if you refer to any book or Google you are likely to get more confused. khilnani

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