Productivity Flashcards
1
Q
What is productivity
A
A measure of the efficiency in which the business turns its inputs into outputs
2
Q
What are the ways to measure productivity
A
Labour productivity
Capital productivity
3
Q
How do we calculate Labour productivity
A
Output (per period) / Number of employees (per period)
4
Q
How to calculate capital productivity
A
Output / Capital employed
5
Q
What are some ways to improve productivity in a business
A
Technology
Lean production
Training
Organisation
6
Q
What are the advantages of high productivity
A
Increased economies of scale
Increased competitiveness
7
Q
What is capacity utilisation in business
A
How much of the factors of production are being used and to what potential
8
Q
What are the problems with spare capacity
A
- Increased cost
- Reduced profits
- Lack of return on investment capital
9
Q
What are the problems with working at full capacity
A
- Lack of flexibility
- More breakdowns
- Pressure on staff
- No room to increase production
