Subject: Industrial Engineering And Management

Topic: Introduction to Industrial Engineering

Difficulty: Medium

Productivity:

Productivity is an attitude of mind. It is the mentality of progress, of the constant improvements of that which exists. It is the certainty of being able to do better today than yesterdays and continuously. It is the constant adaptation of economic and social life to changing conditions. It is the continual effort to apply new techniques and methods. It is the faith in human progress.

Productivity can be expressed as:

$Productivity = \frac{Output}{Input}$

Following are the basic types of productivity:

Labor productivity: it is the ratio output per person. Labor productivity measures the efficiency of the labor in the transformation of something into a product of high value.

Capital productivity: it is the ratio of output (goods or services) to the input of physical capital. Improving physical capital typically yields an increase in output.

Material productivity: it is the ratio of output to the input of materials.

Total Factor productivity (TFP): it is not a simple ratio of output to input, but rather it is a measure that captures everything that is not captured as labor, capital or material productivity. Factors included in total factor productivity includes attributes like changes in general knowledge, the use of particular organizational structures, management techniques, or returns on the scale.