Year Output Input Productivity in Dollars in Dollars (Output/Input) 2009 $200,000 $30,000 + 35,000 + 1.64 5,000 + 50,000 + 2,000 = $122,000 2010 $220,000 $40,000 + 45,000 + 1.53 6,000 + 50,000 +3,000 = $144,000 Partial Measure Labor – Year Output Input Productivity in Dollars in Dollars (Output/Input) 2009 $200,000 $30,000 6.67 2010 $220,000 $40,000 5.50 Partial Measure Raw Materials – Year Output Input Productivity in Dollars in Dollars (Output/Input) 2009 $200,000 $35,000 5.71 2010 $220,000 $45,000 4.89 Partial Measure Capital – Year Output Input Productivity in Dollars in Dollars (Output/Input) 2009 $200,000 $50,000 4.00 2010 $220,000 $50,000 4.40 The overall productivity measure is declining, which indicates a possible problem. The partial measures can be used to indicate cause of the declining productivity. In this case, it is a combination of declines in both labor and raw material productivity, but an increase in the capital productivity. Further investigation should be undertaken to explain the drops in both labor and raw material productivity. An increase in the cost of both of these measures, without an accompanying increase in the selling price might explain these measures. 7. Contract Output Input Productivity
Year Output in Dollars Input in Dollars Productivity (Output/Input) 2009 $200,000 $30,000 + 35,000 + 5,000 + 50,000 + 2,000 = $122,000 1.64 2010 $220,000 $40,000 + 45,000 + 6,000 + 50,000 +3,000 = $144,000 1.53 Partial Measure – Labor Year Output in Dollars Input in Dollars Productivity (Output/Input) 2009 $200,000 $30,000 6.67 2010 $220,000 $40,000 5.50 Partial Measure – Raw Materials Year Output in Dollars Input in Dollars Productivity (Output/Input) 2009 $200,000 $35,000 5.71 2010 $220,000 $45,000 4.89 Partial Measure – Capital Year Output in Dollars Input in Dollars Productivity (Output/Input) 2009 $200,000 $50,000 4.00 2010 $220,000 $50,000 4.40 The overall productivity measure is declining, which indicates a possible problem. The partial measures can be used to indicate cause of the declining productivity. In this case, it is a combination of declines in both labor and raw material productivity, but an increase in the capital productivity. Further investigation should be undertaken to explain the drops in both labor and raw material productivity. An increase in the cost of both of these measures, without an accompanying increase in the selling price might explain these measures. 7. Contract Output Input Productivity