Value added per person
QCD: measuring manufacturing performance, Published by the Department of Trade and Industry in 2004 suggested that Value Added Per Person (VAPP) is: ‘a financial measure that relates the number of direct people involved in the conversion process to add value to the product… The VAPP has a direct impact on the costs associated with a process and shows specifically how well people are used to transform materials into the finished product.’
Value Added Per Person = (Output Value – Input Value) / Number of Employees
Where:
- Output value is the sales value of the unit after production.
- Input value is the value of the raw material unit before production.
- Direct employees are those employees without which the production process cannot operate.
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