Relative Resource Efficiency
Relative Resource Efficiency
Relative Resource Efficiency
RESOURCE
EFFECIENCY
N A C H O R , WA G A N
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OBJECTIVES
o Identify the basic ways to improve resource efficiency
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ECONOMIC EFFICIENCY
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Technical efficiency
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RELATED CONCEPTS
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Basic Ways to Improve Resource Efficiency
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Change the nature of resource through innovation
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RETURN SCALE
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INCREASING RETURNS
TO SCALE
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DECREASING RETURNS
TO SCALE
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CONSTANT RETURN TO SCALE
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RETURN TO SCALE
R = RETURN TO SCALE
Hunter
Q = OUTPUT
Ranger Wizard
I = RESORCE INPUT
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RETURN TO SCALE
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When increasing returns to scale occurs, it results in
economies of scale. This is owing to the fact that efficiency
increases when organizations progress from small-scale to
large-scale production. A loss of efficiency in the production
process, even when the production has been expanded, results
in decreasing returns to scale. This may occur if the
organization becomes too large to be operated as one single
entity. In this case, there is no economy of scale.
RETURN SCALE
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REASONS FOR RETURNS TO SCALE
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SMALL PLANT
- a resource may be assigned different functions
LARGE-SCALE PRODUCTION
Hunter Ranger Wizard
- enable resources to concentrate on job requirements instead of
diffusing efficiency
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Overcoming Decreasing and Negative Returns
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The more efficient you are at doing the wrong thing,
the wronger you become. It is much better to do the
right thing wronger than the wrong thing righter. If
you do the right thing wrong and correct it, you get
better.
-Russell L. Ackoff
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REFERENCES
https://www.economicshelp.org/blog/glossary/technical-efficiency/
https://www.investopedia.com/terms/e/economic_efficiency.asp
https://smallbusiness.chron.com/concept-marginal-productivity-10570.html
https://bizfluent.com/info-8463028-difference-between-average-marginal-productivity.html
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