CPIM Practice Exam

What term describes the ratio of standard hours of work produced to actual hours worked?

1. Efficiency

2. Productivity

3. Utilization

4. Yield

The correct answer is: Efficiency

The correct term describing the ratio of standard hours of work produced to actual hours worked is efficiency. Efficiency specifically measures how well resources are utilized to produce output relative to the expected or standard output measures. In this context, it reflects the effectiveness of labor in completing tasks within a given timeframe, evaluating how much work was accomplished against established standards. Productivity, while related, generally refers to the output produced per input over a given period, which includes aspects beyond just the efficiency of labor hours. Utilization pertains more to how well resources, such as manpower or machinery, are being used relative to their potential or capacity, which does not necessarily focus on the standard versus actual hours worked. Yield typically relates to the output quality from a process compared to the expected standard, often within manufacturing contexts, rather than directly addressing labor efficiency. By understanding efficiency as the ratio of standard to actual hours, one can better analyze labor performance and identify areas for improvement in operational processes.