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(18C) Multiple Resource plus Inflation Productivity Measurement - Printable Version

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(18C) Multiple Resource plus Inflation Productivity Measurement - SlideRule - 11-27-2018 03:14 PM

extract from the Working with your Business Consultant Professional Calculator series,
Manufacturing Consultant


SALES = sales in dollars
IS% = inflation¹ in product prices
LABOR = labor costs
IL% = infaltion¹ in labor costs
ENER = energy costs
IE% = inflation¹ in energy costs
PARTS = material costs
IP% = inflation¹ in material costs
CAPIT = capital costs
IC% = inflation¹ in capital costs
¹{must be 0 for base year}

There are many ways to measure productivity. This section looks at
productivity as a ratio of outputs to inputs - an index - with multiple resources.

The productivity index is a ratio, productivity measurement ratio, but more
resources are used in the index. Sales are considered the output; labor,
energy, materials and capital are the inputs. By watching this index over
time, you can track the productivity of your company.
This formula can be used for profitability as well as productivity. However,
prices and costs inflate at different rates and this must be kept in mind
when using the index over time.