LABOUR & MACHINE

PRODUCTIVITY
DHANSHREE NARAYAN SAWARKAR

G.H.RAISONI SCHOOL OF BUSINESS

MANAGEMENT, NAGPUR
MBA II SEM

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 Productivity

Outputs
Productivity =
Inputs

 Single-factor measures
 Output / (Single Input)
 All-factors measure
 Output / (Total Inputs)

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What are the factors that affect productivity?

Training Methods

Technology Management

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 Measures of Productivity

Single-factor Output Output Output Output

measures Labor Machine Capital Energy

All-factors Output
measure All inputs

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 Single Factor

Single-factor Output Output Output Output

measures Labor Machine Capital Energy

If we produce only one product, the numerator can be either

the total units of the product or the total $ value of the
product. If we produce several products, the numerator is
the total $ value of all products.

The denominator can be the units of input or the total $

value of input.

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 Example: Single Factor Productivity

10,000 Units Produced

Sold for Rs10/unit

500 labor hours

What is the
labor productivity?
Labor rate:Rs9/hr

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 Example: Labor Productivity

 10,000 units / 500hrs = 20 units/hr

 (10,000 units * Rs10/unit) / 500hrs = Rs200/hr

 10,000 units / (500hrs * Rs9/hr) = 2.2 unit/$

 (10,000 units * Rs10/unit) / (500hrs* Rs9/hr) = 22.22

The last one is unit-less

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 Some Single Factor Measurements

• Labor Productivity
– Quantity (or value) of output / labor hrs
– Quantity (or value) of output / shift
• Machine Productivity
– Quantity (or value) of output / machine hrs
• Energy Productivity
– Quantity (or value of output) / kwh
• Capital Productivity
– Quantity (or value) of output / value of input 8
 All Factors

All-factors Goods or Services produced

measure All inputs used to produce them

If we produce only one product, the numerator can be either

the total units of product or total $ value of the product.
If we produce several products, the numerator is the total
$ value of all products.

Usually, the numerator is the total $ value of all outputs.

The denominator is total $ value of all inputs.

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 Example

10,000 Units Produced

Sold for Rs10/unit

500 labor hours

Labor rate: Rs9/hr

Cost of raw material: Rs30,000

Overhead: Rs15,500
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 Example : All-Factor Productivity

Output
AFP = Labor + Materials + Overhead

(10,000 units) * (Rs10)

AFP =
(500)*(Rs9) + (Rs30,000) + (Rs15,500)

AFP = 2.0

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THANK YOU !

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