Fundamentals of Production Theory

Activity analysis, which has only very recently been developed by Koopmans (1951) and extended by Debreu (1959) and Hlldenbrand (1966), is a general and relatively modern concept, using technological data for the thorough formal investigation and characterization of the productive relations that exist in a firm between the factor input quantities and the end product quantities. In this context, a technology is defined as the set of all production points that can be realized alternatively on the grounds of the enterprise’s technical knowledge. These production points are also termed activities or input-output-combinations. A technology is limited by the available resources in general.