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The first example about hospital capacity really just involves tradeoffs around your specific goals, whereas it only makes sense to talk rigorously about effici

by baddox 6y ago

The first example about hospital capacity really just involves tradeoffs around your specific goals, whereas it only makes sense to talk rigorously about efficiency in the context of some specific output goal. So if you fix some goal, say, "we want to be over capacity 1% of the time," then the most efficient way of doing that is probably to have the minimum number of beds that you need according to your predictions about utilization. But you can't really talk about efficiency when you're deciding what your goal is, e.g. whether you're okay being over capacity 10% of the time versus 1% of the time.

didibus 6y ago
Yes, efficiency requires a fixed output goal. Because you want to minimize input while sustaining your desired output target. For example, how can I make all of today's deliveries with less delivery trucks? While productivity requires a fixed input goal. Because you want to maximize output while sustaining your desired input goal. For example, how can I deliver more products per day without increasing the size of my delivery truck fleet? Often time, improving one can improve the other, but not always. For example, someone could ask, how can we grow profit? Okay, one way is to be more efficient, thus spend less money to make the same revenue. Alright, maybe we use cheaper materials, so now produce the same amount and sell the same, but our margin has increased and we make more revenue. Someone else could say, we need to be more productive. Okay, so you invest in better marketing, and scale production to meet increased demand. You are as efficient as before, but more productive. So I feel like, reducing the process from X,Y,Z to only X is about productivity. You still have the same number of employees, but since they don't need to waste time doing Y and Z anymore, they can produce more output. That said, you could choose to apply the gains to efficiency as well, for example, hey, because I eliminated Y and Z, I can now cut my workforce in half and deliver the same output.

by baddox 6y ago

didibus 6y ago

Yes, efficiency requires a fixed output goal. Because you want to minimize input while sustaining your desired output target. For example, how can I make all of today's deliveries with less delivery trucks? While productivity requires a fixed input goal. Because you want to maximize output while sustaining your desired input goal. For example, how can I deliver more products per day without increasing the size of my delivery truck fleet? Often time, improving one can improve the other, but not always. For example, someone could ask, how can we grow profit? Okay, one way is to be more efficient, thus spend less money to make the same revenue. Alright, maybe we use cheaper materials, so now produce the same amount and sell the same, but our margin has increased and we make more revenue. Someone else could say, we need to be more productive. Okay, so you invest in better marketing, and scale production to meet increased demand. You are as efficient as before, but more productive. So I feel like, reducing the process from X,Y,Z to only X is about productivity. You still have the same number of employees, but since they don't need to waste time doing Y and Z anymore, they can produce more output. That said, you could choose to apply the gains to efficiency as well, for example, hey, because I eliminated Y and Z, I can now cut my workforce in half and deliver the same output.