Production and Productivity

• Production means manufacturing something in order to sell it
• Production involves converting inputs (factors of production) into outputs
• Productivity is the output per factor employed
• Productivity is a way to measure how efficient a company or economy is
• Productivity is defined as the output per input employed
• If one company uses the same inputs but produce more outputs, this company is more productive
• The main way companies use productivity is by calculating labour productivity
• Labour productivity is the output produced per worker
• Labour productivity can be calculated by taking the overall output divided by the total number of workers
• Labour productivity can be improved by introducing better training, more experience, improving technology or specialisation