Why productivity efficiency measures give different rankings

jilbo

Can anyone help me please with the following task from a MAC paper?

"Comment as to why productivity and efficiency measures give different rankings"

I keep reading through the text book but can't find anything to help me, I think maybe I should withdraw from the exam, I have zero confidence at present and feel I should just concentrate on DFS.

Any pointers would be greatly appreciated. many thanks

SandyHood

I'd like your help in specifying which exam you are refering to. That way I could answer in the context of the question.

In a general the expression productivity means the same as efficiency, but if a question doesn't give you a full breakdown of costs you could find that:

1. The workforce are producing at 40 products per hour in division 1
2. And only 30 products per hour in division 2
3. But the labour cost per unit in division 1 might be £7.00
4. And a much more efficient £6.50 in division 2

These comparisons are unit based (productivity) v cost based (efficiency).

jilbo

Hi Sandy,

Thanks for your post. The paper I'm referring to is a Premier Training short test, Whitby components Ltd.

We are given financial data for 2 profit centres and in part a) we are asked to calculate various performance indicatures as the company is considering closing one of the plants and a meeting is planned to assess the performance of both plants.

Part b) asks for a series of notes to be prepared for the meeting to:

Distinguish between the terms productivity and efficiency.

Identify 2 performance indicators to measure efficiency and 2 to measure productivity.

Comment as to why productivity and efficiency measures give different rankings.

Have completed everything other than the the last statement.

Maybe it's the way they've worded it!

Does this help?

Thanks for you help
Jill

jilbo

Actually Sandy, now I've read your post again maybe the requirement is to give a comparison of the results for the 2 profit centres, whereas I thought it was a general question. :blushing:

Think I'll leave it for tonight and look at it with fresh eyes tomorrow.

Thanks again