Business Analysis& Decision Making Essay Example for Free

credit line Analysis Decision Making EssayAccording to Haslam, Neale and Johal (2000), the total factor productivity us in general defined in two main types the Level of repulse and capital and their efficiency of proceeds and the productivity of the firm. The productivity of capital and moil is calculated as total takingss divided by inputs of labour and capital. Labour cost in a company makes a major part of the drudgery cost and should be therefore most cost good. The total employment divided to the total somatogenic output equals the total labour productivity. EXAMPLE If a company produces more the one product or provides service rather the manufactured it faeces be difficult to recognise the physical output. Therefore, financial proxies much(prenominal) as value added or net output of employment are used. In order to equate the figures fair with each other, financial indexes can be produced. This is possible by dividing the total number of labour hours into the value added, (Haslam, Neale and Johal, 2000).The result of this calculation is the value added generated by labour hour. This index can be equal not just with the past years of production of a firm, in addition it is possible to compare with other companies to obtain a broad prospective about labour productivity and how efficient labour is used. Furthermore, over the years inflation dislodges the purchasing power of money and capital productivity varies. Assts may change value due to depreciation or capital consumption. Therefore, companies analyse the value added per of fixed assets. Capital productivity is calculated as capital stock (before depreciation or capital consumption) divided into the net output or value added figure, (Haslam, Neale and Johal, 2000).The relationship between a growing product market and productivity is that in a growing market the demand of a manufactured good increase. The result is an increase in volumes produced and sold. However, productivity is the output less the cost of production. Therefore, a growing market is not the all factor in order to achieve greater productivity. Like it was briefly pointed out in the paragraph above, labour cost is expensive and therefore should be used efficiently.A boost in productivity may occur whilst improving the productive flow. Due to the introduction of new techniques, working methods such as cell or mass production and technical inventions such as conveyors labour costs can be cut and productivity increased. Another factor for increasing productivity may be employees satisfaction. In addition, in a growing market it comes to fragmentation and segmentation and the market matures. In order to expect competitive many firms lower their prices, which results less revenue generated.Employee satisfactionLabour time most efficient usedlabour efficiency, product quality, brand recognition and the economyHaslam, Neale and Johal, Economics in a parentage context 3rd edition, Thomson Learning 2000, London