Operational Cases

Hi there,

I like the way you're approaching this!

1) Capacity = number of units can be produced

Correct. Normally within a timespan (hours/days/week/years)

2) Productivity = output/input or output/time

Correct. For a given input (hours, lbs, etc) how much do we make)

3) Utilisation = utilisation rate of a machine from its maximum capacity

Correct.

4) Efficiency = output/input but in terms of quality

It's actually essentially the same as #2 (productivity), but almost flipped. For a given item produced, how little can we use?

1. Capacity = Theoretical maximum number of units can be produced in the line
2. Labor Productivity = Units produced per employee per hour (also know as man-hour)
3. Capital Productivity = Revenue produced per dollar invested in the line.
4. Combined Productivity = Revenue produced per combination of dollar invested and labor employed. This is governed by theories like Cobb-Douglas Function.
5. Utilisation = Actual units produced divided by theoretical maximum possible (capacity)
6. Efficiency = Total man-hours of effort spent divided by the theoretical man-hours required based on an ideal labor productivity level

Productivity is how much output there is per input unit.
Efficiency is the percentage of the actual output to the expected output (if everything was working well).
 

Hi!

I think you're actually on the right track and I agree with your definitions.

Best,

Anto