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Efficiency is the output you create for a unit of input. All governments, organizations, communities and individuals have limited resources such that efficiency is the basis of economic output. The following are examples of efficiency.
The efficiency of work is known as productivity. This is the output achieved in an hour of work. For example, a graphic designer who produces more designs in a month after discovering a software tool that streamlines their work.The labor, resources, energy and time consumed by a process for each output.
The energy consumed by equipment and transport relative to their output. For example, the energy consumed per passenger mile by a high speed train as compared to an aircraft.Allocative EfficiencyProducing things that have value to businesses and consumers. In other words, producing a product that nobody wants is extremely inefficient.
The output of a management team relative to the assets they control and resources they expend. For example, managers of a startup who consume $1 million in expenses to produce $1 billion in value are extremely efficient.Cost efficiency is the value you get for the cost you pay. For example, the brand recognition that is created for each dollar of advertising spend.
The value created for resources consumed including materials, parts, labor, machine time, energy and land.Efficiency is calculated using the value of outputs. Value is based on quality. A chef who takes an hour to prepare 24 meals may be more efficient than a fast food worker who produces 24 hamburgers a minute because the quality of the chef's meals may be much higher.
Efficiency often needs to consider quality of life. For example, a factory that produces $1 million in goods a month that causes $1 billion in pollution or reduced enjoyment of a community isn't efficient.|
| Type | | | Definition | The value created for a unit of input. | | Related Concepts | |
Efficiency
This is the complete list of articles we have written about efficiency.
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A list of efficiency measurements.
Common types of business efficiency.
How to calculate the common types of process efficiency.
The common types of business benchmark.
A definition of red tape with examples.
The definition of work efficiency with examples.
The definition of management efficiency with examples.
The common types of economic efficiency.
The definition of agency cost with examples.
The basics of productivity.
An overview of flow.
The difference between efficiency and productivity.
A definition of knowledge work with examples.
A definition of bottleneck with several business examples.
How to calculate productivity with 3 examples.
The definition of productivity improvement with examples.
The formula for productivity rate with calculation examples.
The definition of toil with examples.
The definition of work ethic with examples.
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