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This paper clarifies the concept of system analysis and examines the possibility of using this approach as a tool to identify the efficiency of educational system. It presents a discussion of statistical, social and economic difficulties, which may be involved in the measurement of educational output. The study concludes by showing the limitations of applying mathematical models in measuring educational output. However, these models would be useful in educational and manpower planning if they were considered as sub-systems. Their results would not be significant unless social and economical interpretations are given to them.