What is efficiency

Efficient companies maximize outputs from given inputs, thus minimizing their costs. The state or quality of being efficient, or able to accomplish something with the least waste of time and effort; competency in performance. Accomplishment of or ability to accomplish a job with a minimum expenditure of time and effort. In its simplest form, the difference between productivity and efficiency is the difference between quantity and quality.

Companies need to find the right combination of efficiency and productivity in order to optimize output while at the same time minimizing waste. Productivity: is commonly measured as output during comparable periods — production per minute, hour, day, week, etc.

Efficiency: looks at the quality of the work done, which usually includes creating output with less waste, spending less money and fewer resources. Sometimes efficiency is more desirable than productivity. Understanding Efficiency. Types of Efficiency. A Historical Look. The Impacts of Efficiency. Example of Efficiency. How Do You Calculate Efficiency? What Is Allocative Efficiency?

What Is Peak Efficiency? What Is Energy Efficiency? Efficiency in an Investment. The Bottom Line. Key Takeaways Efficiency occurs when you reduce waste to produce a given number of goods or services. You can measure efficiency by dividing total output by total input. There are a number of different types of efficiency, including economic efficiency, market efficiency, and operational efficiency.

You can measure the efficiency of your investments using the return on investment figure. You can also express efficiency as a percentage by multiplying the ratio by What Is a Measure of Efficiency in an Investment?

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This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace. Related Terms Operational Efficiency Definition Operational efficiency is a metric that measures the efficiency of profit earned as a function of operational costs.

Economic Efficiency Definition Economic efficiency is an economic state in which every resource is optimally allocated to serve each person in the best way while minimizing waste. What Is Production Efficiency? Production efficiency describes a maximum capacity level in which an entity can no longer produce more of a good without lowering the production of another.

Cost Accounting Definition Cost accounting is a form of managerial accounting that aims to capture a company's total cost of production by assessing its variable and fixed costs.

Why Minimum Efficient Scale Matters The minimum efficient scale MES is the point on a cost curve when a company can produce its product cheaply enough to offer it at a competitive price. What Is a Smokestack Industry? A smokestack industry is a traditional heavy manufacturing industry that tends to produce pollution in its process. Hence assuming the mechanical efficiency of the engine to be and substituting! We have seen that the efficiency of an electromagnetic engine is greatest when the current is indefinitely small, and then the rate at which it works is also indefinitely small.

All rights reserved. Filters 0. Words form: efficiencies. See word origin. Efficiency is defined as the ability to produce something with a minimum amount of effort. These example sentences are selected automatically from various online news sources to reflect current usage of the word 'efficiency.

Send us feedback. See more words from the same year. Accessed 13 Nov. More Definitions for efficiency. Nglish: Translation of efficiency for Spanish Speakers. Britannica English: Translation of efficiency for Arabic Speakers.

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