Saturday, 19 March 2011

What are the measurement units?

The productivity ratio has 2 components (as do all ratios, of course). Sometimes we forget to think about the units of the denominator.

If you have cattle, you might look at their productivity in terms of quantity of milk produced per animal.

But if your most expensive resource is land (as it is for many farmers) then the yield per hectare is more important. So, you might be more efficient with a lower yield per animal but more animals grazing the same area.

So, next time you see a productivity ratio, give a little thought to the units ... and whether changing them would change priorities.

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