Productive Efficiency


The concept describes how productive efficiency enables companies to produce goods and services at the lowest cost. Using case studies from across industries and countries, it explains the strengths and drawbacks of the concept and provides a series of useful steps and success factors to implement and measure productive efficiency.

Technique Overview

Productive Efficiency

Productive Efficiency Definition

Productive efficiency is the condition that exists when production uses the least cost combination of inputs. In the long run, it is the minimum average cost. Productive efficiency is reached when a company produces at the minimum cost, a situation that is achieved under perfect competition (McEachern, 2011).

Productive Efficiency Description *

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Business Evidence

Productive Efficiency Strengths *

Productive Efficiency Weaknesses *

Examples of Productive Efficiency *

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Business Application

Productive Efficiency Implementation *

Success Factors of Productive Efficiency *

Measures of Productive Efficiency *

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Professional Tools

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Further Reading

Productive Efficiency Web Resources *

Productive Efficiency Print Resources *

Productive Efficiency References (4 of up to 20) *

  • Alvarez, R., Crespi, G. (2003) Determinants of Technical Efficiency in Small Firms, Small Business Economics, 20(3), 233-244.
  • Anderton (2000) Economics (3rd ed.), Pearson, London.
  • Bathwal, R, (2000) Industrial Economics (2nd ed.), New Age International, New Delhi.
  • BusinessWeek, 2011. AMR in Stalemate in Bid for $800 Million Labor Savings. Sep 29. Available at: [Accessed on 19 October 2011].

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