Topic two

• Productivity is the relationship between output and the quantity of resources or inputs used to produce them
• Productivity is concerned with how efficiently goods and services are produced and the value created by the production process
• Productivity equation: Productivity = Output/Input
• Two basic types of competitive advantage a firm can possess are low cost or differentiation
• Cost Leadership strategy: A firm reduces its economic costs below that of competitors to gain a competitive advantage
• Differentiation strategy: A firm seeks to be unique in its industry along dimensions widely valued by buyers
• Focus Strategies: The generic strategy of focus involves choosing a narrow competitive scope within an industry and tailoring the strategy to serve specific segments or buyer groups
• Labor Productivity is the quantity of output produced by one unit of production input in a unit of time
• Labor Productivity is a single factor productivity measure
• Total Factor Productivity is the year-by-year change in output considering multiple factors
• Total Factor Productivity attempts to construct a productivity measure for an aggregation of factors
• Factors considered in productivity improvements include efficiency, maximum output, economy, quality, elimination of waste, and satisfaction of human beings through increased employment, income, and better standard of living
• Improvements in productivity aim to increase the value of output relative to the cost of input
• Long-term productivity improvements can be achieved through the human factor, including skills, systems, management, and positive attitudes
• Waste can be eliminated through technology, innovation, automation, learning, experience, job design, work analysis, and motivation
• Technology, innovation, and automation bring new ideas, methods, and equipment to the production process
• Learning and experience curve concepts enhance productivity and reduce costs
• Job design, work analysis, and motivation techniques enable firms to examine work at the individual worker level
• Productivity is measured by the efficiency through which inputs are converted into outputs
• Productivity = Output/Input = Goods or Services Produced/All Factors of Production
• Productivity Indices express productivity as a percentage of output to input
• OMS: Output per man-shift
• Wastivity is a concept that measures the amount of wastage generated in the system
• Wastivity = 1/Productivity
• Wastivity is a tool for measuring the efficiency of inputs by measuring wastages such as unnecessary inputs, defective outputs, or idling of resources