Technical efficiency

Technical efficiency refers to how well an entity, such as a business or organization, uses its resources (like labor, capital, and materials) to produce the maximum possible output. If an organization is technically efficient, it is producing the greatest output with the least amount of resources without waste. Conversely, inefficiency means resources are not being used optimally, and more output could be achieved with better resource management. Achieving technical efficiency helps organizations operate smoothly and economically, maximizing productivity while minimizing waste.