In international economics, the capability of one producer to produce a given good using fewer resources than any other producer.
Asset Turnover is a financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue. It is an important metric to assess how well a company is utilizing its assets to produce revenue.
Benchmarking is a technique for measuring an organization's products, services, or activities against those of best-performing organizations to identify areas for improvement.
Best practices are industry-standard methods and procedures that are established as the most effective way to achieve a desired outcome. Consultants evaluate various firms to gather and share these practices.
The relationship between the value of capital and the output it produces in a given period, usually a year; the lower the ratio, the more efficiently capital is being used to produce goods and services.
The concept of comparative advantage explains the efficiency of individuals or groups in particular economic activities compared to others, encouraging specialization and trade for maximum benefit.
Competition refers to the rivalry in the marketplace wherein goods and services are bought from those who provide 'the most for the money.' It rewards efficient producers and suppliers, driving the economy toward the efficient use of resources.
Decreasing returns to scale is a characteristic of the production of a good that requires proportionally higher amounts of inputs to produce each unit of output as the amount of output increases.
A phenomenon in economics where adding additional units of resources to a production process results in smaller increments of output due to overcrowding, inefficiency, or less effective resource allocation.
A direct hour is the time spent working directly on a product, service, or cost unit within an organization. It is measured in direct labor hours, machine hours, or standard hours.
Direct Materials Yield Variance, also known as Direct Materials Quantity Variance, is a fundamental concept in standard costing systems. It assesses the efficiency in the use of direct materials by comparing the standard quantity allowed for production to the actual quantity used, then valuing this difference at standard prices.
Division of labor refers to the separation of the workforce into distinct categories of labor and assigning specific tasks required to produce a product to different workers. This concept is integral to increasing efficiency and productivity in various industries.
Economic inefficiency refers to the misallocation of society's resources, where a different distribution can improve the well-being of some without reducing the well-being of others.
Economies of scope refer to the increases in efficiency and potential sales that businesses experience when they produce, distribute, and market a range of products rather than focusing on a single product or type of product.
Efficiency in accounting is a measure of how effectively an organization can produce and distribute its product, typically quantified by comparing standard hours allowed for production and actual hours taken.
Comparing two types of changes that impact production systems—changes stemming from internal market dynamics and those arising from external factors such as consumer preferences and technological innovations.
GRC is an integrated approach to managing an organization's governance, risk management, and compliance activities. It promotes cohesive information sharing and coordination to enhance purpose and efficiency.
Idle capacity ratio measures the proportion of a company's total production capacity that is not being utilized during a specified period, compared to the budgeted capacity. It helps in understanding inefficiencies in resource utilization.
The IFRS Foundation is a not-for-profit organization responsible for the development and oversight of the International Financial Reporting Standards (IFRS). These standards provide a common global language for financial reporting, ensuring transparency, accountability, and efficiency in financial markets worldwide.
International Financial Reporting Standards (IFRS) are a set of accounting rules that standardize how businesses report their financial outcomes globally, ensuring transparency, accountability, and efficiency in financial markets.
An approach to manufacturing designed to match production to demand by only supplying goods to order. This has the effect of reducing stocks of raw material and finished goods, encouraging those production activities that add value to the output, and minimizing levels of scrap and defective units.
Just-In-Time (JIT) inventory control is a methodology designed to improve efficiency by reducing in-process inventory and its associated costs. It involves close coordination with suppliers to align production schedules with sales levels and often integrates computerized systems for optimal inventory management.
An organizational structure where direct line functions contribute to the organization's output. This setup ensures clear lines of authority, accountability, and streamlined decision-making, focusing on direct communication from top management to entry-level employees.
Low-tech products use earlier or less developed technology, often characterized by simplicity and ease of use. These products typically have fewer technological complexities and are designed to fulfill basic needs or functions without incorporating advanced technical elements.
Macros are a series of computer keyboard or mouse actions recorded to be replayed. They are typically used to automate repetitive tasks in software applications, increasing efficiency and reducing the possibility of human error.
Mass production refers to the manufacturing or processing of uniform products in large quantities using interchangeable parts and machinery. It can be either a wholly automated process or a series of short, repetitive procedures.
A 'Mover and Shaker' refers to an individual who has a dramatic impact on an organization or a series of events through their dynamic ability to get things done quickly and successfully.
Nonproductive activities or assets do not contribute to the production of the desired goods or realization of the expected effects, often resulting in wasted effort and financial resources.
Normal capacity is a measure of production that reflects the average level of operating activity needed to meet production demands over a long period. It considers both seasonal fluctuations and normal occurrences of idle time.
A numeric keypad is a specific set of keys on a computer keyboard, located beside the main alphabetic keypad, primarily featuring digits 0 to 9 and a decimal point key, arranged similarly to an adding machine for efficient numerical input.
An operational audit is a thorough review of an organization's activities to assess whether they are being carried out efficiently and effectively, and to identify opportunities for improvement.
Overhead Efficiency Variance is an accounting concept used in standard costing systems to measure the variance in overhead costs due to the efficiency or inefficiency of actual production time compared to the standard time allocated.
In standard costing, a performance standard refers to the predetermined level of performance to be achieved during a specific period, which is used to calculate standard costs for processes, typically direct labor and materials.
The term 'prefabricated' refers to building components or entire structures that are manufactured in a factory and then assembled on the construction site. Prefabrication aims to enhance efficiency, reduce costs, and minimize construction time.
Process innovation refers to the implementation of a new or significantly improved production or delivery method. This can include changes in techniques, equipment, or software and aims to increase efficiency and effectiveness in an organization.
The planning, coordination, and controlling of an organization's resources to efficiently facilitate the production process, encompassing key issues such as location, labor, transportation costs, and production forecasting.
A mathematical formula that describes the relationship between various inputs and the output they produce, often used to analyze the efficiency and productivity of firms or entire industries.
A graphical representation that shows the various combinations of outputs that an economy can produce given the available resources and technology.
The production rate is a vital metric in manufacturing, representing the speed at which a production line manufactures products. It informs stakeholders about productivity efficiency and capacity utilization.
A graphic representation of various possible outputs of two goods with a fixed supply of resources that are fully employed. Also called a transformation curve, it is useful for determining possible product mixes.
The state of being able to generate creative and valuable output efficiently. Often associated with high levels of creativity, efficiency, and often substantial yields of work in a given period.
Productivity measures the relationship between the quantity and quality of units produced and the labor per unit of time.
Profit margin is a measure of profitability that calculates how much of every dollar earned by a company winds up as profit. It is critical for assessing the efficiency and performance of a company.
A pure-market economy is an economic system in which the forces of supply and demand determine the production, distribution, and consumption of goods and services, with little to no government intervention.
Rationalization refers to reorganization efforts within a firm, group, or industry aimed at increasing efficiency and profitability. Activities under rationalization may include closing redundant units, expanding others, or restructuring the product range to adapt to market demands.
Reengineering involves making major structural changes in a corporation or important business operations to improve efficiency and productivity.
Resource allocation refers to the process of distributing available resources to various projects, departments, or business units to achieve organizational objectives efficiently.
Return on Capital Employed (ROCE) is an accounting ratio that measures an organization's profitability and efficiency in using its capital. It is expressed as a percentage of profit relative to the capital employed.
Return on Equity (ROE) is a measure of financial performance, determined by dividing net income by shareholders' equity. ROE is an essential metric for evaluating a company's profitability and efficiency in generating profits from its equity.
Scheduled production refers to the planning and timetabling of the production process for specific products, detailing when and how each production sequence is to occur.
Span of Control refers to the principle of management stating the number of people a manager can supervise effectively. The ability to supervise people depends on various factors including the nature of the job, the professional level of employees, and their geographical location.
Stock turnover, also known as inventory turnover, is a financial ratio that measures how many times a company's inventory is sold and replaced over a specific period.
Sub-optimization refers to the process of utilizing resources or strategies to less than their maximum potential, which results in achieving less than the optimal output or outcome.
Theoretical Capacity refers to the maximum output that could be achieved by an organization or machinery without interruptions or inefficiencies.
The Theory of Constraints (TOC) is a systematic approach that aims to identify and eliminate bottlenecks in a production system. It aims to increase profits while simultaneously reducing stock levels and operating expenses.
Indication that organizational management procedures are followed very closely. When an organization is run like a tight ship, few allowances are permitted for unorthodox procedures.
Time management refers to the process of planning and controlling how much time to spend on specific activities to achieve maximum productivity, efficiency, and effectiveness.
A time-and-motion study involves measuring the time and movements required to complete specific job tasks. First advocated by Frederick W. Taylor in his book Scientific Management, such studies aim to create a management standard for evaluating individual employee productivity.
Turnaround time refers to the period required to complete a task or fulfill an order once it has been initiated.
Words Per Minute (WPM) is a measure of the speed at which an individual can type or at which a machine can print. It represents the number of words processed within one minute.
An estimate of the time required to carry out a series of manufacturing procedures, by studying the operations involved by means of time, methods, and work studies.
