1. 5. Extensions of the Multifactor Productivity: Benchmarking
IESEG SCHOOL OF MANAGEMENT
PRODUCTIVITY AND PROFITABILITY ASSESSMENT
USING FINANCIAL STATEMENTS
5. Extensions of the Multifactor Productivity: Benchmarking
Dr. Diego Prior
Business Economics Department
Universitat Autònoma de Barcelona and IESEG School of Management

2. Efficiency vs. productivity
Output c b d a
input

3. An example y y d d c c b b a a x x a) Outputs orientation b)
Inputs orientation

4. Technological assumptionsy d a
Constant returns
to scale b
Variable returns c
to scale x

5. FDH models j efficient under FDH, but inefficient under DEA yx y
Outputs orientation
Inputs orientation
j efficient under FDH, but inefficient under DEA
DMUj

6. L(y) x2 x1
IsoqL(y) xc xa xb xd
axa
bxb
Inputs orientation

7. Another easy example Unit Isoquant C A A’ B D E (Trucks/tm)*1000
Potential contraction A’ B D E
(employees/tm)*1000
Potential contraction

8. Outputs orientation y2
P(x) y1 ya yb yc yd
a ya
b yb
Isop P(x)