CPIM Practice Exam

What does productivity measure?

1. Time taken to manufacture goods

2. Input resources compared to output production

3. Amount of labor applied

4. Quality of finished goods

The correct answer is: Input resources compared to output production

Productivity measures the efficiency of production by comparing the amount of input resources used to the output produced. This concept involves evaluating how effectively resources like labor, materials, and capital are transformed into finished goods or services. Higher productivity means that more output is generated from the same amount of input, indicating a more efficient production process. In the context of manufacturing, for example, if a factory can produce a greater number of items with the same amount of raw materials and labor over a given period, this signifies higher productivity. It is a key performance indicator in supply chain management and operations as it directly relates to cost efficiency and profitability. Understanding productivity helps organizations identify areas for improvement, optimize resource allocation, and ultimately increase competitiveness in the market.