Input output model

Input output model
Input Output model is an efficient way to document and analyze key aspects of transformation procedure. The model depicts a graph which consists of input and output flow of data. In terms of economics, the model represents dependencies of different branch and industrial sectors. It is a critical model by which one can show the output from one sector becomes input of another and how it can impact the overall output or end result.

Overview of processes involved

IPO model can be simply explained as an input-output process in which input is received from a user or source and certain processing is carried on input to provide necessary output. The main essence of this complete system lies in the processing environment that calibrates in input in order to find the desired output. There are two main categories in which work is divided into as follows.

  1. Input environment– Inputs could be any information such as human resources, money or materials
  2. Output environment– Transformed output obtained could be new information, services, money or consumables.
  3. Processing environment- In this environment, the complete processing is performed based on the input and desired output

IPO model interpretation

IPO (input output system) is quite susceptible to misinterpretation as well because in theories, it has all the required data with regard to environment in system and may contain different types of objects that may not be possible for system to understand. As a result of this, it is important for the data which is required to be interpreted must be having defined boundaries of input and output variables that need to be processed. This enables the system to work within a defined understanding and also able to comprehend where it needs to limit. Therefore, when it comes to statistical analysis of IPO model, we often see analysts defined set of boundaries in order to create a defined system for analysis.

Example of an IPO model

IPO model could be defined as a functional graph that shows input and output required and what all processes are required in order to obtain required output from input. This model may include specific type of storage unit as well which helps in transformation of data. The data is flow into the input unit from the outside and processing of data is carried out in order to transform the data. Output unit shows the required data flow process and result of transformation procedure. An example of an IPO model is explained below.

HR firm is having issues with their hiring process as various engineers hired in the firm are not retained for a long time. This causes more cost to firm since hiring and training of new junior engineers could be costly and time consuming process. Therefore, the engineering firm is required to create an IPO model of its hiring process and in this model they try to resolve the issues related to hiring.

  • Inputs- Various inputs are obtained in this including resumes, recommendations, credit reports, academic data, previous employer records, portfolio of jobs etc.
  • Processing- In this field, various tests and interviews could be included to which could be critical to process and test the performance the required inputs. Various parameters included are Interview, Tests, Industrial and psychological review, problem solving ability, communication skill testing.
  • Output- Job filling and hiring process
  • Feedback- In the feedback process, employee performance is evaluated from the tenure of hiring. The various parameters of assessment may include evaluation of six months, job satisfaction, performance rating, and hiring manager assessments.


IPO model is useful to show the inter dependencies of various sectors and commonly used in economics to evaluate the impact of inter-industry matrix entries.