|
| |
Productivity rate is the amount of output produced in an hour of work. FormulaProductivity rate is calculated as the total output of workers divided by hours worked.productivity = output / hours workedOutput is typically a dollar amount. This is usually net output that represents the value added by the hours worked. Alternatively, output can be measured in production units or any other measure of output that is meaningful to your business.
Example #1Workers on a production line produce 110,000 chocolate bars with a wholesale value of $170,000 on a shift. The costs of non-labor inputs such as ingredients, machines and electricity are $90,000. Therefore, the workers added $80,000 of value ($170,000 - $90,000) on the shift. The shift represents 64 hours of work.productivity = $80,000 / 64 = $1,250 / hourAlternatively, productivity could be calculated in units. This is useful when value added dollar amounts are difficult to estimate.productivity = 110,000 / 64 = 1718.8 units / hour
Example #2A freelance designer completes 4 projects for clients with a total value of $9,900 in a month. He has $2000 in expenses resulting in a net profit of $7,900. He works a total of 210 hours in the month including all administrative work and customer relationship management.productivity = $7900 / 210 = $37.62 / hour|
| Type | | | Definition (1) | The net output produced in an hour of work. | | Definition (2) | The value added in an hour of work. | | Related Concepts | |
Productivity
This is the complete list of articles we have written about productivity.
If you enjoyed this page, please consider bookmarking Simplicable.
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 definition of toil with examples.
The definition of work ethic with examples.
A comprehensive guide to time management techniques.
Common examples of self-improvement.
The definition of time boxing with examples.
An overview of the physics of time.
The definition of discipline with examples.
A comparison of discipline and motivation.
The definition of self-discipline with examples.
The definition of attention span with examples.
TrendingThe most popular articles on Simplicable in the past day.
Recent posts or updates on Simplicable.
Site Map
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.
View credits & copyrights or citation information for this page.
|
