Measuring productivity in multi-stage, multi-product environment

Productivity is defined as the ratio of output to the resources required to produce it. The objective of this study is to present a model aimed at measuring the productivity of producing different products, each consisting of a few work stations, in a service and manufacturing environment. Since organisational profit, or other financial indicators used for evaluating organisational success, cannot be measured at the time of the operation, the presented model can be used as a fast and valid indicator of expected future profit. Calculating productivity requires measuring both output and resources. This study focuses on the measurement of the outputs and offers methodologies to quantify the following two concepts: 1) calculating total output for each product, taking into consideration the value of items in process by summing up partial items into an equivalent number of complete items; 2) developing a method to sum up the outputs of various products by assigning the relative weight of each product, according to the level of usage of the most intensively used resource.