Definition

Efficiency is a measure of the amount of input necessary to achieve a given output. It is a productivity metric measuring the speed and cost of doing a job.

Examples

The number of labor hours or labor dollars per unit of output, working capital per unit or total capital per unit, etc.

Application

Efficiency metrics can be very useful to evaluate how actions translate into cost savings and net financial impact; however, they do not speak to the customer's experience.

See Also

Effectiveness