Productivity is a measurement of output resulting from the use of productive resources or inputs. It refers to the amount of output per unit of input over a period of time. An increase in productivity may mean producing the same amount with fewer inputs, producing more output with the same inputs, or a combination of the two. Companies look for ways to maintain and increase the level of productivity in order to remain competitive while maintaining profits. One way of accomplishing this is through investing in capital goods such as machines, tools, and new ideas used in the production process. Technological improvements in capital goods are a leading cause of increase in productivity.
After completing the following activities, you will develop a better understanding of the economics associated with productivity. In the first activity you will explore the concepts that are connected to productivity. In the second activity you will investigate the Herr's Potato Chips, a company that is constantly working at incorporating new techniques to satisfy the customer. Finally, in the third activity you will use the Internet to search for inventors and inventions. Your task is to find an invention that you would like to learn more about and learn how that invention improves its environment. After you complete all three parts to this lesson you will find a series of questions that will explore what you have learned from Capital Chips about productivity.
You are going to take a tour of the Herr's Foods Inc in this lesson. Herr's Potato Chips have been on the market for the past 50 years. The company is constantly working at incorporating new techniques to satisfy the customer. The students' job will be to see how these new techniques improve the company and benefits the customer.
- You will learn about some actual investments in capital resources that have increased productivity for one company in particular. You will learn how Herr's Foods, Inc. increased its productivity over the years through a variety of investments in capital resources.
- Click on the point on the Herr's timeline and follow the directions that correspond to the date(s) that you are assigned.
- Answer the following questions using the information you obtain from the timeline for the year assigned.
- What was the capital investment, new idea, or innovation that occurred during this timeframe on the Herr's's timeline?
- How did this change increase the productivity of the Herr's's potato chip business?
- What was the impact of this change on the consumer, producer, and worker?
- Click on the the Herr's Foods History page and and scroll all the way to the bottom to see the progress Herr's Food Inc has made.
We have now applied the concepts from the previous activity to a real-life business. Next you will get a closer look at an innovation or invention, to see how it can be used in a business.