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In its simplistic form productivity equals output divided by inputs(Vonderembse (2013). However, when it some to productivity it is very difficult to increase productivity with out negatively effecting quality. For example, if on an assembly line you want to increase the number of products produced per hour you can accomplish this by speeding up the assembler line. However, if you speed up the line there are more likely to be more defects in the product and thus the quality goes done. This is called the Quality Condition. This means that even though more products are produced at a faster pace, there may be more defects and returns which will actually negatively effect the companies over all productivity,

There are trade offs in productivity and the key os for management to understand the proper formula to make a company the most productive. A manager needs to understand that ratio between the increase of speed of manufacturing a product versus the quality of products off the line. If the line is running too fast the defects mat out weight the additional products being make at the higher rates. The returns will put outweigh the larger number of products being produced and as a result productivity would go down. The manager is responsible for understanding the optimum number products to produce with a low rate of failure.

There can also be other factors with productivity such as skilled versus unskilled labor and higher grade materials versus cheaper ones. Again, a manager needs to weigh the pros and cons of both to understand the most productive route.