Productivity

Productivity is defined as the ratio of output to input. This software enables you to compute the productivity for any number of inputs and for any number of time periods. The software will compute both the productivity measures for each input and also the changes in productivity from period to period for each input. In addition, the software allows for creating a common denominator so that you will end up with one productivity measure based on multiple inputs. A sample screen that includes both the data and solution appears next. The initialization for this problem requested 3 inputs (labor hours, materials and inspection hours) and 2 time periods.

Data

$/Unit. This column is used to aggregate all of the inputs into one meaningful measure. Thus, we will convert our basic inputs using rates of $8/hour for labor, $2/lb for material and $12/hour for inspection costs.

Period 1, 2. The output is entered in the first row and the inputs are entered in the remaining rows for each period.

Solution

Productivity. For each input the ratio of output to input is displayed as the productivity for each period. In addition, an aggregate measure is created using the conversion factors in column 1. Thus for period 1 the denominator is

8*4000 + 2*5000 + 12*1000 = 54,000 which yields a productivity of 10,000/54,000 or .1852.

Change. A column has been added that relates the change from period to period for each of the productivity measures. For example, the aggregate productivity has decreased by 7.19% from period 1 to period 2.