Measuring productivity for all inputs at once is called total productivity measurement.
In practice, it may not be necessary to measure the effect of all inputs. Many firms measure the productivity of only those factors that are thought to be relevant indicators of organizational performance and success. Thus, in practical terms, total productivity measurement can be defined as focusing on a limited number of inputs, which, in total, indicates organizational success. In either case, total productivity measurement requires the development of a multi-factor measurement approach. A common multi-factor approach suggested in the productivity literature (bus rarely found in practice) is the use of aggregate productivity indices. Aggregate indices are complex and difficult to interpret and have not been generally accepted. Two approaches that have gained some acceptance are profile measurement and profit-linked productivity measurement.
Profile Productivity Measurement
Producing a product involves numerous critical such as labor, material, capital, and energy. Profile
measurement provides a series or vector of separate and distinct