Understanding Maximum vs. Optimum Productivity: What's the Real Difference?

Hi,

Please clarify what is the difference between maximum and optimum productivity.

Ravi

Briefly, it goes like this.

If you want maximum productivity, you go all out to perform, irrespective of any other factors. That is, if the production capacity is 100, you will achieve the full production capacity, irrespective of additional costs, people utilization, market availability, etc.

If you want optimum productivity, however, you have to consider a number of other factors, i.e. do you really need to produce up to maximum capacity, or in view of market prospects, cost of labor and materials, marketing costs, etc. It would be more viable to produce, say, 70 only, being the figure that will give you the best returns.

Hope this helps.

Jeroo

Maximum and Optimum

For example, consider the following scenario: The maximum speed of your vehicle is 100 km/hr, but you would rarely ride at 100 km/hr, only in case of an emergency. Usually, you ride at 50 km/hr as it provides good fuel efficiency and helps maintain the vehicle in optimal condition. Riding at 100 km/hr consumes more fuel and may harm the engine. Therefore, the speed of 50 km/hr is known as the optimum speed.

The same concept applies to production. If the output factor is utilized to the maximum, then some other factors will need to be compensated for.

I hope these corrections are helpful. Let me know if you need further assistance.