Production is a process in which the raw materials are transformed into
finished or semi-finished products suitable for use and delivered to
consumers to satisfy wants. It is the process of transforming inputs
into outputs. Inputs are
resources or factors of production
Productivity is the relationship between the amount of or
quantity of goods or services produced and the work, money, etc., that is used
to produce it. That means the Productivity is the measure of
efficiency with which the goods and services are produced.
Productivity of a particular factor of production is measured by the output of
that factor per unit time. [Example for explanation: There are two workers A and B, both use the same kind
of machines to produce the same kind of commodity. If both of
them work 40 hours in a week and A produces 400 units of the commodity and
B produces 600 units of commodity. Their productivity per hour is as
follows. A’s productivity is 400/40 = 10
units. B’s
productivity is 600/40 = 15 units. Here B
produces more units of the commodity per hour and therefore B is the
more productive than A.
Production function describes the relationship between the output of a
commodity and the input combine to produce it. A simple production function may
be written as; O = f (k, l), where O = output, k =
capital, l = labour and the symbol “f” means the function of or depends on.
Difference between production and
productivity: A Production
figure does not give and idea about productivity. Productivity is different
from production.
The following example explains this.
Firms
Production figures
A
10,000 units
B
5,000 units
From
the above production figures we cannot get any idea about the
productivity of the firm. If we are given with the inputs
used to produce it, then we can calculate the productivity Here the
firm A uses less than double the amount of inputs used by B, then firm A
can be considered as more productive.
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