IDENIFYING PRODUCTIVITYMEASURMENT MODEL FOR PHARMACEUTICAL INDUSTRY A CASE STUDY OF ADISS PHARMACEUTICAL FACTORY SC

Abstract

The main objective of the study was to develop and propose an appropriate single, multi, total factor productivity and productivity index measurement model for Ethiopian pharmaceutical industry in general and for Addis pharmaceutical factory in particular. An appropriate single, multi, total factor productivity and productivity index measurement model for Ethiopian pharmaceutical industry was developed and the model was tested with five consecutive year’s data obtained from Addis pharmaceutical factory i.e., a case company.Simple and multiple regression analysis was used to develop the relationship between total factor productivity and company's performance (net income), and hence coefficient of correlation (r=0.867) showed that there is strong positive relationship between company's performance and total factor productivity and for any increment in total factor productivity there will be progress in net income. The coefficient of determination: R2 = 0.75, clearly illustrated that 75% variation in net income can possibly be explained by the variation in total factor productivity. Thus, it can be concluded that the study had achieved the general and specific objectives and all research questions and hypotheses are addressed. Therefore, the developed productivity model can be appropriate for Ethiopian pharmaceutical industry.