Business Analysis& Decision Making Essay

According to Haslam, Neale and Johal (2000), the total factor productivity us in general defined in two main types the take aim of get and big(p) and their efficiency of production and the productivity of the firm. The productivity of heavy(p) and wear down is calculated as total sidetracks divided by inputs of labour and capital. sweat cost in a company makes a major part of the production cost and should be therefore almost cost efficient. The total employment divided to the total physical output equals the total labour productivity.EXAMPLE If a company produces more the virtuoso product or provides service rather the manufactured it can be difficult to recognise the physical output. Therefore, financial proxies such as nurture added or last-place output of employment are used. In frame to analyse the figures fair with each other, financial indexes can be produced. This is likely by dividing the total number of labour hours into the value added, (Haslam, Neale and Joh al, 2000).The result of this computing is the value added generated by labour hour. This index can be compare not just with the past years of production of a firm, in addition it is possible to compare with other companies to obtain a vast prospective about labour productivity and how efficient labour is used. Furthermore, over the years inflation changes the purchasing power of money and capital productivity varies. Assts may change value due to depreciation or capital consumption. Therefore, companies analyse the value added per of fixed assets. Capital productivity is calculated as capital stock (before depreciation or capital consumption) divided into the net output or value added figure, (Haslam, Neale and Johal, 2000).The relationship between a outgrowth product market and productivity is that in a increase market the demand of a manufactured good step-up. The result is an increase in volumes produced and sold. However, productivity is the output less the cost of produc tion. Therefore, a growing market is not the only factor in order to strike greater productivity. Like it was briefly pointed out in the paragraph above, labour cost is expensive and therefore should be used efficiently.A make headway in productivity may occur whilst improving the productive flow. overdue to the introduction of new techniques, working methods such as cell or mass production and technical inventions such as conveyors labour be can be cut and productivity increased. Another factor for increase productivity may be employees satisfaction. In addition, in a growing market it comes to fragmentation and segmentation and the market matures. In order to perch competitive many firms lower their prices, which results less revenue generated.Employee satisfactionLabour time most efficient usedlabour efficiency, product quality, fault recognition and the economyHaslam, Neale and Johal, Economics in a Business context 3rd edition, Thomson Learning 2000, London