Production Concepts and Types

Production

• Production is an activity aimed at creating goods and services
• It involves increasing, enhancing, and developing the usefulness of goods and services to better serve human needs.

Goals of Production

• Satisfy the needs of society for goods and services
• Replace worn-out or damaged items
• Meet international market demands
• Boost economic prosperity

Types of Production Based on Output

• Production of goods: includes tangible items like bread, cakes, clothes, bags, and shoes.
• Provision of services: includes intangible activities like medical care, transportation, and laundry services.

Types of Production Based on Level

• Primary sector: involves extractive and agricultural activities such as mining, oil drilling, farming, and livestock raising.
• Secondary sector: involves industrial and craft production such as manufacturing vehicles, clothing, and furniture.
• Tertiary sector: involves trade and services such as retail, banking, and transportation.

Types of Production Based on Form

• Chemical production: involves creating chemical substances like medicines and pesticides.
• Transformation production: involves changing the physical form of materials, such as garment manufacturing and furniture construction.
• Assembly production: involves combining different components to create a whole product, such as assembling cars and electronics.
• Service production: involves providing a service, such as transportation and entertainment.

Distribution

• Distribution is the process of moving goods and services from producers to consumers.
• It aims to increase efficiency and value for both producers and consumers.

Producer Benefits of Distribution

• Easier access to wider markets
• Easier interaction with numerous retailers/consumers
• Quality control
• Increasing sales

Consumer Benefits of Distribution

• Easier access to products
• Convenient products at lower prices.