PRODUCTION AND PRODUCTIVITY
Productivity, on the other hand, is concerned not merely with the total value or volume of output of product, what is more important is that it shows us the efficiency of the production.
The difference between the two is when we find that all increases in production, does not necessairly result in increased productivity. If increase in total output is brought about with an increase in the input of factors of production, production will have increased, but productivity will only remain constant or low.
In fact Productivity refers to the quality of production. The clear definition of Productivity is the ratio of output to aggregate inputs.
Productivitiy can handle in two categories. First named as “total productivity”and second named as“partial productivity”. The inputs, which are necessary to product goods, and the outputs, which are consume the inputs in manufacturing process, raito reach us to the “Total Productivity”. (Outputs / Inputs )
On the other hand, we can reach the “Partial Productivity” with dividing the outputs to the factors of the inputs. So we have the ratio of pruductivity with partial meanings. Because, the factors of inputs do not used at the manufacturing process equally and the unit of inputs factors not the same from each other. For instance, “Labour Productivity, Machine Productivity, Material Productivity etc…” are the partial productivity samples. For calculating these productivity ratios we have to determine the unit of their formula. If The unit of these formula determined wrong, the decsions making based on the productivity values could be completely wrong.
Labour Productivity = Outputs / Number of Labour “The amount of production per labour”
= Outputs / (Man – Hour) “The amount of production per Man – Hour”
Machine Productivity = Outputs / (Machine – Hour) “The amount of production per Machine – Hour load”
Material Productivity = Outputs / Materials “The amount of production per material (like raw material)”
= Outputs Value / Materials Value “The value of production per material value”