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It is the ratio of total output to the sum of all input factors. Thus, a total productivity measure reflects the joint impact of all the inputs in producing the output. Total factor productivity is commonly recognized as a variable that represents the amount of output not directly related to the amount of inputs, such as materials and capital. Total factor productivity is part of a larger idea of multi-factor productivity, where economic planners look at all of the factors in the growth of a corporate or national economy. In these kinds of appraisals, total factor productivity (TFP) addresses the kinds of growth that can¶t be linked to a corresponding rise in concrete input. For example, if two companies, company A and company B, have the same amounts of materials and resources, but one produces more than the other, someone might attribute the better output of the winner to hiring more skilled labor, or having a more educated middle management. That's how total factor productivity helps to explain the "big picture" in corporate activities. 

A broader gauge of productivity, total factor productivity is measured by combining the effects of all the resources used in the production of goods and services (labor, capital, raw material, energy,etc.) and dividing it into the output. One example, is a ratio computed by adding standard hours of labor actually produced, plus the standard machine hours actually produced in a given time period divided by the actual hours available for both labor and machines in the time period. Total productivity ratios reflect simultaneous changes in outputs and inputs. As such, total productivity ratios provide the most inclusive type of index for measuring productivity and may be preferred in making comparisons of productivity. However, they do not show the interaction between each input and output separately and are thus too broad to be used as a tool for improving specific areas

It is the ratio of output to one class of input. For example, labor productivity (the ratio of output to labor input) is a partial productivity measure. The standard definition of productivity is actually what is known as a partial factor measure of productivity, in the sense that it only considers a single input in the ratio. The formula then for partialfactor productivity would be the ratio of total output to a single input or: Managers generally utilize partial productivity measures because the data is readily available. Also, since the total of multifactor measures provides an aggregate perspective, partial factor productivity measures are easier to relate to specific processes. Labor-based hours (generally, readily available information) is a

it would seem that productivity could be increased by substituting machinery for labor. Other partial factor measure options could appear as output/labor. misinterpretation may occur. output/machine. energy productivity (using kilowatt hours). Labor-based measures do not include mechanization and automation in the input. Terms applied to some other partial factor measures include capital productivity (using machine hours or dollars invested). that may not necessarily be a wise decision. output/capital. . When this is the case. and materials productivity (using inventory dollars). or output/energy. However.frequently used input variable in the equation. thus when automation replaces labor.