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CAHSEE Math Exam: Help and Review22 chapters | 255 lessons | 13 flashcard sets

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Lesson Transcript

Instructor:
*Karin Gonzalez*

Karin has taught middle and high school Health and has a master's degree in social work.

In this lesson, you will learn the definition of a productivity ratio and will be given the formula to calculate productivity. The lesson will also analyze productivity in different realms.

Brianna opened her very own clothing boutique in South Beach, Miami. Following a period of success, Brianna noticed that her sales were decreasing. In an effort to pinpoint the reason for the decline, she decided to ascertain if her employees were being as productive as possible.

In order to do this, she needed to look at the productivity ratio. The **productivity ratio** is a fraction of output over input.

This image gives you the formula for the productivity ratio and a general definition of output and input. In measuring productivity, you need to decide what numbers you are going to plug in for input and output in the formula.

Input is what a business puts in to turn a profit (output). Therefore, the most common input measured is hours and the most common output is money when business owners, CEOs, or general managers are trying to decide if their business is efficient, productive, and profitable.

But input is not always measured by hours worked. And output is not always measured by money made. Input could also be measured by raw materials used, energy, amount of land, etc. It is pretty much anything that is put forth to get an output and to make a profit! Output could also be measured by amount of products produced, number of sales, etc. It is pretty much anything that is a result of the input put forth.

Let's look at an example in more detail.

Leo, a supervisor at a financial services company, wants to evaluate the level of productivity and effectiveness of his four new financial advisors, Jim, John, Jorge, and James. He decides to use the productivity ratio and use the average number of cold calls per day as his input and average number of accounts opened per day as his output.

As you can see from this image, Leo put each advisor's output (accounts opened on average per day) over their input (cold calls made per day) and came up with a decimal quotient that indicates their productivity.

If we look again at the image, the financial advisor with the highest productivity ratio is James with 0.17. This is interesting to Leo because he is the advisor that made the least amount of calls. What we can conclude from this data is that although James is not making as many cold calls as his colleagues, his effectiveness and productivity with the calls that he does make is higher than his colleagues due to his level of skill, technique, personal skills, and his persuasiveness on the phone with prospective clients. Therefore, we can say that James is a more productive worker than his colleagues (even if only by a little).

Let's review. Productivity ratios are important in evaluating the efficiency, effectiveness, and health of a person, company, industry, or business. The **productivity ratio** is a fraction of output over input. **Output** is the amount produced by a person, machine, business, or industry. **Input** is what is put into a process, system, or business, usually to produce a profit. When you use the formula output/input for the productivity ratio, you must use numerical values for output and input. One of the most common applications of the productivity ratio is using hours worked as the input and money made as the output, although there are other numerical values that can be used for input and output.

**Productivity ratio** - a fraction of output over input

**Output** - the amount produced by a person, machine, business, or industry

**Input** - the labor, materials, etc. put into a process, system, or business

After viewing this lesson, check to see if you can accomplish the following tasks:

- Define productivity ratio, output, and input
- Calculate the productivity ratio for a given scenario

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Lesson
13 in chapter 10 of the course:

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CAHSEE Math Exam: Help and Review22 chapters | 255 lessons | 13 flashcard sets

- Ratios & Rates: Definitions & Examples 6:37
- How to Solve Problems with Money 8:29
- Proportion: Definition, Application & Examples 6:05
- Calculations with Ratios and Proportions 5:35
- Percents: Definition, Application & Examples 6:20
- How to Solve Word Problems That Use Percents 6:30
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- Compounding Interest Formulas: Calculations & Examples 7:45
- Taxes & Discounts: Calculations & Examples 8:07
- How to Solve Problems with Time 6:18
- Distance Formulas: Calculations & Examples 6:31
- Fibonacci Sequence: Examples, Golden Ratio & Nature 5:17
- Productivity Ratio: Formula, Calculation & Analysis 3:41
- What is the Golden Ratio in Math? - Definition & Examples 4:41
- Go to CAHSEE Ratios, Percent & Proportions: Help & Review

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