What is the productivity model?

productivity is a tool used in economics. It deals with the relationship between sources used in production and final output. This measures productivity: the effectiveness with which the resources are used. There are many different examples of productivity model that covers different factors and gives different weights to different factors.

The specific productivity model usually falls into one of the three categories. These are models based on specific companies, models based on the entire industry and models based on the entire national economy. When comparing two competing models, it is the fairest to compare only those from the same category. For example, the aim of any productivity model is the economy model of much greater uncertainty and room than a model of a particular company. The aim of any productivity model is to create a mathematical relationship between input sources and the output product. This could create a pattern like 10 employees plus one Aline SSEMBLY plus 100 wooden lengths every day equals25 ready chairs. The model would include an estimate of the relationship between different factors. Someone who uses the model could then calculate the expected output if, for example, there were 12 employees and 150 lengths of wood. A more accurate model contains more details about the limitation of the mathematical formula: for example, there may be only space for 15 employees on the assembly line, which means that hiring 16. The employees will not immediately increase production without other modifications.

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productivity model is a more complicated and more detailed version of the production function. The production function is a simplifying mathematical equation, which also converts the input funds to the output. The difference is that the manufacturing function allows only one variable input. The production function for the previous example could only correspond to Effect that the increasing or decreasing number of employees has chairs.

One of the significant limitation of productivity model is inflation. JIt is about the problem if the output is measured by the value rather than the quantity, because the increase in prices can give the impression of higher power, even if the same number of units is formed. In many cases, especially for individual business, this is automatically repaired by inflation impacts on resource costs. In the case of industry or the whole economy, it is more likely that the costs of sources and output values ​​will be affected by inflation at different rates, causing a problem with direct comparison.