How may the efficiency of production be measured?

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → By counting the pieces made and the defective pieces in a batch

Option (1) By preparing a performance report on each worker through the superior — Incorrect. A performance report by the superior is used to measure the performance of an employee.

Option (2) By counting the pieces made and the defective pieces in a batch — Correct. Efficiency of production is measured by counting the pieces produced and the defective pieces in a batch. More good pieces and fewer defective ones show higher efficiency.

Option (3) By checking certain pieces at random to ensure their quality — Incorrect. Checking some pieces at random is sample checking. Large organisations use it to check the quality of their pieces.

Option (4) By calculating ratios like gross profit ratio and net profit ratio — Incorrect. Such ratios are worked out at regular intervals to measure a company’s overall performance.

NCERT (2026-27 Edition): “Step 2: Measurement of Actual Performance: … Measurement of performance of an employee may require preparation of performance report by his superior. Measurement of a company’s performance may involve calculation of certain ratios like gross profit ratio, net profit ratio, return on investment, etc., at periodic intervals. Progress of work in certain operating areas like marketing may be measured by considering the number of units sold, increase in market share, etc., whereas, efficiency of production may be measured by counting the number of pieces produced and number of defective pieces in a batch. In small organisations, each piece produced may be checked to ensure that it conforms to quality specifications laid down for the product. However, this might not be possible in a large organisation. Thus, in large organisations, certain pieces are checked at random for quality. This is known as sample checking.”