What is a production system ? What are tire measures of labour productivity and cost productivity ?Ripunjay Tiwari
Ans. Production System – A production system is the design process by which elements are transformed into useful products. A process is an organized procedure for accomplishing the conversion of input into output, as shown in fig. 5.3.
Ans. There are the following types of productivity measurement-
(i) Direct Cost Productivity– All the items of direct cost associated with resources are aggregated on a monetary value basis.
(ii) Energy Productivity – Only the amount of energy consumed is considered as the resource. All the types of energy consumed· are utilized in proper manner or not can be determined with the measurement of energy productivity.
(iii) Labour Productivity -It is measured in tens of labour hours. Hence this index is relatively free of changes caused by wage rates and labour mix. This productivity measures the proper hour management of labour working .
(iv) Raw Material Productivity-Raw material productivity measures the proper utilization of raw materials. In this the numerators are usually weight of product, the denominators are the· weight of raw material consumed to make the products.
(v) Capital Productivity -Many formulations are possible in one, the resource inputs may be the charges during the period to depreciation. In other, the inputs may be book value of capital investment. How utilization of capital is done, is kept in mind at the time of measurement of capital productivity.
(vi) Direct Labour Cost Productivity – These inputs are measured in terms of direct labour costs. This index will reflect the effect of both wage
rates and changes in the labour mix. Direct labour cost productivity helps the
managers to analyse the utilization of direct labour costs in proper manner.