ABSTRACT
This chapter discusses four such measures that lie at the heart of most discussions on productivity: productivity index, production function, learning curve, and time study. A productivity index measures the ratio of change in output to a change in input. In common sense terms, it means the quantity of goods produced or service provided with a given quantity of input. The assumption of a single homogeneous product or output with a single input allows one to take advantage of the measurement process where one only needs two sets of information to compute the productivity index – output and a single input. A common concern in dealing with productivity indices is that they are narrowly defined, meaning that they focus more on efficiency than on factors such as effectiveness or quality. Effectiveness simply means the extent to which an organization providing goods and services has achieved its goals and objective, or individuals consuming goods and services are satisfied with them.
