Explain the difference between production and productivity with example. | Production and productivity in management

 

Explain the difference between production and productivity with example.

Production and productivity in management.

Production and productivity are two related but distinct concepts that are often used in business and economics. Here are some key differences between the two:

Definition:
Production refers to the process of creating goods and services.
Productivity refers to the efficiency with which resources (such as labor, capital, and materials) are used to produce goods and services.

Focus:
Production focuses on output or the final result of the process, such as the number of units produced or the value of goods and services.
Productivity focuses on input or the resources used to create the output, such as the amount of labor, capital, and materials required to produce a given amount of output.

Measurement:
Production is typically measured in terms of quantity, such as the number of units produced or the value of goods and services.
Productivity is typically measured in terms of efficiency or output per unit of input, such as the amount of goods produced per hour of labor or the amount of revenue generated per dollar of capital invested.

Example:
Production: A car manufacturer produces 1,000 cars per month.
Productivity: The same car manufacturer produces 1,000 cars per month with 50 employees, while a competing car manufacturer produces the same number of cars with only 30 employees. The first car manufacturer has lower productivity because it requires more labor to produce the same output.
In summary, production and productivity are both important measures of economic activity, but they focus on different aspects of the production process. Production measures the final output of the process, while productivity measures the efficiency with which resources are used to produce that output.