Overhead Productivity Analysis of Metals Sector Companies Included in Nifty 50

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In the world of competitive environment, productivity is an essential booster for the progress of an organisation. The ratio of output to input is termed as productivity. Higher productivity ratio indicates more optimum use of the resources. This research paper depicts the analysis of overhead productivity of metals sector companies from 2010-11 to 2017-18 i.e. for eight years. The research analysed the intra-company as well as inter-company overhead productivity which has been calculated by applying the chi-square and kruskal wallis one way analysis of variance test. It is found that the average overhead productivity ratio is the best of Coal India Ltd. with 38.3249 which is followed by Hindalco Ltd., Vedanta Ltd. and Tata Steel Ltd. It is suggested that if the company utilises its resources optimally then it can save the amount which has been calculated as possible savings. Possible savings is the excess of actual over standard overhead input. It is the total possible savings in overhead input for a period of eight years, ` 680 crore of Coal India Ltd., ` 10002 crore of Vedanta Ltd., ` 17118 crore of Hindalco Ltd. and ` 26463 crore of Tata Steel Ltd. It has also been suggested that overhead productivity can be improved by reducing the expenses in overhead cost which can only be possible by having a check on the overhead expenses incurred by the companies. The metal sector companies can make a committee which closely monitors the expenses incurred on overheads and find out the ways through which savings can be achieved.

Keywords: Productivity, Overhead Productivity Ratio, Chi-Square, Kruskal Wallis One-Way Analysis of Variance, Possible Savings

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