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Chp $2$ Objective Question #$14$ Productivity Measures.

A general metric for many businesses and departments, within the business, is 'productivity'. This goes for manufacturing businesses, as well as service businesses, like banks, insurance, and healthcare. Productivity is generally measured by the amount of output divided by the amount of input. So$,$ for example, if a home painting company paints $30$ homes in the month of April, and it had $20$ painters working, then the productivity for April would be $\frac{30}{20},$ or $1\mathrm{.}5$ homes per painter. By itself, the $1\mathrm{.}5$ does not mean very much $-$ however, when you compare this productivity measure to March or February measures, you will see whether or not you were more productive or less productive than you were in earlier months. Knowing this will enable managers to intervene, if necessary, to try an improve productivity $-$ such as using better paint equipment or providing better training to the painters. If April $(1\mathrm{.}5)$ looked to be worse than March $(3\mathrm{.}0),$ then management may want to step in and do something. In this example $-$ March productivity was $60$ homes$/$divided by $20$ painters $-$ a productivity measure of $3\mathrm{.}0.$

Sometimes, productivity is simply output divided by the input $($in dollars$),$ such as the total labor $ spent on those painters. It could also include the cost of the paint, as well as paint brushes and trays.

Business professionals really need to understand how the productivity measure is being calculated, and whether or not it is providing meaningful information.