Productive Efficiency

• Productivity


  Productivity is defined as output per unit of input (e.g. worker) per period of time.
• Impact of Productivity


  Lower average cost of production, potentially lower prices for consumers, increased demand, and higher employment.
• Higher Profits


  Earnings from high productivity can be reinvested for long-term growth and further productivity improvements
• Factors Influencing Productivity


  Includes training workers, using advanced capital machinery, and increasing capital stock
• Investment


  The allocation of resources, typically financial, to improve productivity and efficiency in a firm.
• Labour Intensive 


  A production process that relies primarily on human labor rather than machinery
• Capital Intensive


  A production process that relies primarily on machinery and equipment rather than human labor.
• Skilled Labour


  Workers who have specialized training or expertise in a particular field, often influencing production methods
• Fixed Costs 


  Expenses that do not change with the level of output produced, common in capital intensive production.
• Capacity Utilisation


  Actual Output / Max Output x 100
• Under Capacity Utilisation Problems.

  Fixed Costs not spread. Low productivity.
• Over Capacity Utilisation Problems

  Worker dissatisfaction leading to mistakes and quality issues.
• Lean Production


  A process aimed at minimizing waste during production to reduce costs.
• Waste Minimisation


  The goal of lean production to eliminate unnecessary resources and activities.
• Quality Control


  The process of checking products to ensure they meet a minimum standard
• Quality Assurance


  A commitment among production teams to improve product quality and reliability
• Total Quality Management


  A management approach that emphasizes responsibility for quality at all stages of production.
• Kaizen


  A philosophy of continuous improvement in processes and practices.
• Just in Time


  A management strategy that aligns raw-material orders from suppliers directly with production schedules.
• Capital Investment


  Funds invested in a business for the purpose of acquiring or upgrading physical assets.
• Productive Efficiency


  The ability of a firm to produce goods at the lowest possible cost.
• Brand Loyalty


  The tendency of consumers to continue buying the same brand.