Calculating Total Factor Productivity: Methods and Case Study Guide
Learn how to measure Total Factor Productivity using the output/input ratio, including all necessary components in the equation. Follow a detailed case study on garden service productivity calculations for practical application. Enhance your understanding of productivity metrics and efficiency assessment.
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Presentation Transcript
PERSONAL ASSISTANT L4 MALUTI TVET BETHLEHEM CAMPUS SJ MOFOKENG
PERSONAL ASSISTANT L4 TOPIC 5 MODULE 17
OVERVIEW At the end of this module you will be able to: Measure Total Factor Productivity using the output/input ratio. Include all output and input items in the equation.
Measuring Total Factor Productivity using the output-input ratio. Measuring Total Factor Productivity Productivity = Output(Value of production) Cost of inputs(labour/ wages, capital, raw materials) NB!!!Case study calculations on pg184-185 How do we measure productivity based on the case study on pg 184-185? Step1: Calculate Output(Value of production) Output of 15 gardens = 15 gardens x R120 Output = R1800
Measuring Total Factor Productivity Step2 :Calculate Cost of inputs( Labour, Materials and Capital) Labour +Materials + Capital Labour = 5 people at R120 each = 5 x R120 Labour = R550 Materials(Fuel, maintenance, and insurance) = 15 gardens at R12 = 15 x R12 Materials = R180 Capital given = R25
Measuring Total Factor Productivity Cost of inputs = Labour + Material + Capital = R550 + R180 + R25 Cost of inputs = R755 Step 3 Calculate Productivity Productivity = Output(Value of Production) Cost of inputs(Labour, Materials and Capital) = R1800 R550 + R180 + R25 = R1800 R755 = 2.38: 1
Total Factor Productivity Second paragraph on page 185 NB!!After the first year , Productivity increased. Step 1 : Calculate Output = 20 gardens x R120 each = R2400 NB!! They now service 20 gardens hence R2400
Total Factor Productivity Step 2 : Calculate Cost of inputs = Labour + Materials + Capital = R550 + (R12 x 20 gardens ) + R25 = R550 + R250 + R25 = R 815
Total Factor Productivity Step 3 : Calculate Productivity Productivity = Output/Value of Production Cost of Inputs = R2400 R815 = 2,94:1
ASSESSMENT ACTIVITY 17.1 Scenario A page 186 Scenario A.page168 1. Write down the Value of the Production/Output The value of completed umbrella = R1000 They have added a customer value of R200 The Value of Production/Output = R1000 + R200 The Value of Production = R1200 NB!!!Given from the scenario.
Assessment Activity 17.1 Scenario A pg 186 Calculate the total cost of inputs Labour = 5 people x R240 per person 20 = R60 NB !!! The daily wages of the workers divided equally amongst 20 umbrellas hence we have divided by 20 Material = R100 given from scenario Capital = R200 also given Cost of Inputs = Labour + Material + Capital = R60 + R100 + R200 = R360
Assessment Activity 17.1 Scenario A pg 186 3. Calculate the productivity ratio for the business Productivity = Output/Value of Production Cost of Inputs( Labour , Material and Capital = R1 200 R 60 + R100 + R200 = R1 200 R 360 = 3.33:1
Assessment Activity 17.2 Scenario B Please do Assessment Activity 17.1 Scenario B on Page 186 question 4,5 and 6.
TANK YOU VERY MUCH!! BY : Me MOFOKENG
