Production Flashcards
Factors of Production?
●Land -natural resources
● Labour – human resource
● Capital – man-made resource
● Entrepreneur – human resource
What does each factor consist of
The land consists of all the natural resources on the earth
Labour includes all human resources which are needed to combine other factors of production to
produce goods and services.
Capital includes assets such as machinery, equipment, and vehicle owned by the company.
An entrepreneur is an owner and risk-taker in a business venture.
What are some industries developed by these factors??
Crude Oil, Clay, Bauxite, and Limestone
What’s the difference between Production and Productivity?
Production is the process of combining units of inputs while Productivity is the increase of output from each unit in the production process.
How do measure productivity??
productivity = quantity of output
quantity of inputs
What are some ways to increase productivity
●Organizing work more efficiently
● Using more productive resources
● Using automation and computerization.
● Using approaches that motivate staff to work harder
What are some types of capital?
- Fixed capital
- Working capital
- Venture capital
Explain the types of capital
Fixed: refers to durable capital equipment that can be used repeatedly in the production
process.
Working: refers to the cash needed to pay for the day-to-day operation of a business.
It is used to pay workers, and utilities and purchase raw materials.
Venture: is money that is provided by investors to “start-up businesses. These
investors are often referred to as venture capitalists.
What are the levels of production?
Subsistence Production
Domestic Production
SurplusProduction
Export Production
Explain the levels of production
Subsistence: This is the lowest level of production. Subsistence production refers to output from the
a production process that is just enough for survival.
Domestic: Domestic production refers to production that is more than survival level. It provides an output that is
enough to satisfy domestic needs and wants
Surplus: As the industry becomes more efficient, then surpluses of products start to develop, and some
members of society are able to organize production
Export: The exporting of goods and services
Four methods of production are?
Job, Batch, Flow, and Lean
Explain the four methods of production bozo
Job: Job production involves a one-off job.
Batch: a number of identical (or similar) items will be produced
in a set or batch.
Flow: also known as mass or continuous flow production, involves
products or services that are passed down a line of production.
Lean: This is a systematic set of processes for eliminating waste from manufacturing and other forms of production.
Types of production and explain em
Primary Production: (extracting natural resources.): An extractive industry is any form of industry that removes (takes out) resources provided by nature.
Secondary Production: This is the second stage of production after the extraction of natural
resources. It involves converting raw materials into finished goods. This includes manufacturers
such as assembling, baking, refining, and construction (building) industries.
Tertiary Production: This includes all kinds of service industries such as transportation,
education, communication, and tourism. Service industriesare those not directly concerned with
the production of physical goods.
What is a cottage industry
A cottage industry is a business that is operated in people’s homes.
Features of the cottage industry are??
Home-based: people can work from home rather than in a factory.
Mainly manual: typically people will work with their hands, for example by sewing,
weaving, making carpets, etc.
Uses local raw materials: materials will often be sourced locally so that they can be
transported easily to family homes.
ADVANTAGES OF THE COTTAGE INDUSTRY
- The cottage industry is a possible answer to the unemployment problem
- Cottage industries provide a source of self-employment and income to many.
- Many cottage industries grow into larger businesses and become major producers,
DISADVANTAGES >:(( OF THE COTTAGE INDUSTRY
- The major disadvantage of cottage industries is the difficulty in securing finance to start up
the business. - As with other small businesses, long hours of work are required and in the end, producers
sometimes find difficulty in securing markets. - Cottage industries are unable to compete on equal terms with larger businesses because of
their use of simple and cheap machinery and equipment.
Functions of small businesses
- Creating Employment
Small businesses account for a large percentage of total employment in Caribbean economies. - Providing goods and services that satisfy demand
Identifying a particular need in a market and developing a product that will supply that market
needs to improve the standard of living - Making profits
The main purpose of starting and operating a business is to make profits. Profit makes it
worthwhile for the entrepreneur to continue the business.
ADVANTAGES AND DISADVANTAGES OF A SMALL BUSINESS
ADVANTEGES
Small businesses provide a service to the community that large companies of not always offer.
Small businesses are usually located in
small districts and towns not serviced by
large businesses.
Small businesses increase competition for
large firms.
DISADVANTAGES
The business lacks expertise in certain areas.
Owners find it difficult to source finance
for the business
Limited ability to service customers because
they have limited production capacity.
