• Entry
  • Reader's guide
  • Entries A-Z
  • Subject index

Efficiency is the ratio of outputs to inputs in a system, whether that is benefits to costs, results to effort, or action to energy. Economic efficiency is satisfied when an activity's benefits exceed its costs; or, stated otherwise, the ratio of benefits divided by costs is greater than one. Energy efficiency is measured in a similar way by the ratio of work divided by effort. In practice, this tends to be a measure of work accomplished relative to the energy required to produce the work. Dividing benefits/work by costs/effort allows comparison across options.

The range of costs and benefits associated with an option might be limited to effects with wellrecognized dollar values, and only those costs and benefits accruing directly to those involved in the decision-making ...

    • Loading...
    locked icon

    Sign in to access this content

    Get a 30 day FREE TRIAL

    • Watch videos from a variety of sources bringing classroom topics to life
    • Read modern, diverse business cases
    • Explore hundreds of books and reference titles