# Measure of productivity

Productivity is measured as unit of input per unit of output.
(e.g., employees per pound sold.) Productivity has two components, Efficiency and Effectiveness, and is the product of these two components.
Productivity

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Example 1:

The CEO of R.R. Donnelley & Sons Co. argues that there is a key advantage to print that will let print survive despite the growing digital world: the economic efficiency of print. If you're an advertiser trying to sell product, the measurement of the cost efficiency is the dollar of sales generated to the cost of advertising. For example, in TV advertising, you spend 19 cents for each \$1 of sales. It's 15 cents for radio, and a little under 11 cents for online advertising, and that will come down. But for most print media, it ranges from 8 cents to 11 cents. And for Yellow Page directories, it's around 3.5 cents. As long as there are these powerful economic advantages, print is going to be in good shape. (Year 2001-SIC 2711)

Explanation: The cost of advertising per dollar of sales created varies across the alternative modes of advertising. Each has different productivity.

Example 2:

In 1979, Japan's auto makers could build a small car and ship it to the U.S. for \$1500 less than Detroit's cost to produce a similar car. In 1983, the gap increased to \$2500. By 1986, the gap was \$1900. (Year 1986-SIC 3711)

Explanation: Japanese auto makers were far more productive than the U.S. manufacturers. Their total cost per car was substantially lower than that of the U.S. manufacturers.

Example 3:

Cooper surpassed all of its competitors in the number of tires it produced and sold per day per employee. Cooper's overall manufacturing productivity was the highest, with an average of 22.7 versus 18.8 for Goodyear. (Year 1991-SIC 3011)

Explanation: Cooper's productivity at the time was higher than Goodyear's. Cooper used fewer inputs (people) to produce its outputs (tires) than did its competition.