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CHAPTER 15 PRODUCTIVITY MEASUREMENT AND CONTROL Continuous improvement implies that efficiency is increasing. Over time a company can create a competitive advantage by using fewer inputs to produce a given output or by producing more output for a given set of inputs. This chapter focuses on the measurement of productivity and efficiency. LEARNING OBJECTIVES After studying Chapter 15, you should be able to: 1. Explain the meaning of productive efficiency, and describe the difference between technical and allocative efficiency. 2. Define partial productivity measurement, and list its advantages and disadvantages. 3. Explain what total productivity measurement is, and name its advantages. 4. Discuss the role of productivity measurement in assessing activity improvement. KEY TOPICS The following major topics are covered in this chapter (related learning objectives are listed for each topic): 1. Productive Efficiency (LO 1) 2. Partial Productivity Measurement (LO 2) 3. Total Productivity Measurement (LO 3) 4. Measuring Changes in Activity and Process Efficiency (LO 4) I. PRODUCTIVE EFFICIENCY Productivity is concerned with the efficient production of output. It specifically addresses the relationship between inputs and outputs. Total productive efficiency is the point at which both technical and allocative efficiency is achieved. Technical Efficiency
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This note was uploaded on 02/08/2010 for the course ACTG 3000 taught by Professor C during the Spring '10 term at Oregon State.

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