Definition of Production efficiency:
Production efficiency is an economic term describing a level in which an economy or entity can no longer produce additional amounts of a good without lowering the production level of another product. This happens when production is reportedly occurring along a production possibility frontier (PPF).
An operational state whereby a company cannot increase output of a specific good or service without additional costs.
Production efficiency may also be referred to as productive efficiency. Productive efficiency similarly means that an entity is operating at maximum capacity.
How to use Production efficiency in a sentence?
- Analysts can also measure various types of production efficiency by using the equation: Output Rate ÷ Standard Output Rate x 100.
- The concept of economic production efficiency centers around the charting of a production possibility frontier.
- Economic production efficiency refers to a level in which an entity has reached maximum capacity.
Meaning of Production efficiency & Production efficiency Definition