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Productivity Indices

Productivity is the ratio of “OUTPUT” to “INPUT”.

Productivity is an index which shows how effectively an organization is using its resources (inputs).

Higher is the productivity Better is the Organization.

In the case of a garment factory, the output can be taken as the number of pieces produced, while “inputs” are the people, machines and time.

On the basis of this- there are 3 indices which are used to measure productivity and these are – Labor productivity, machine productivity and value productivity.

The ways in which input and output are measured can provide different productivity indices or measures.

1. Labour Productivity

it is the ratio of a number of pieces produced to the total number of the operator. This also means output per labour.

2. Machine Productivity

It is the ratio of a number of pieces produced to the total number of machines used. This also means output per machine

3. Value productivity

It is the ratio of a number of pieces produced to the total time used.  This also means output per unit time.

Let’s understand this with one example:

Suppose a garment factory is having

  • The total output of 500 pieces
  • Total machines used are 20
  • Total labours are 25
  • Working hours are 8

Then all the productivity indices are:

  • Labor productivity – 500/ 25 = 20 pieces per labor.
  • Machine productivity – 500/20 = 25 pieces per machine
  • Value productivity – 500/8= 62.5 pieces per hour.

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