DESCRIPTIVE ANALYSIS 0F PRODUCTION DEFINITIONS
Production is the process by which human beings creates goods and services which consumers are prepared to purchase in order to satisfy their wants.
DESCRIPTIVE ANALYSIS 0F PRODUCTION DEFINITIONS
Production may be defined in several approaches;
- A) PRODUCTION AS THE SATISFACTION OF EFFECTIVE DEMAND
Production is the satisfaction of effective demand.
.-Production comprises a variety of processes involved between the initiation of production and purchase by final consumers.
-Production includes all the activities that people are prepared to pay in order to satisfy their wants.
-Consumers must have ability and willingness to posses and own the products produced.
- B) PRODUCTION AS THE CREATION OF WEALTH
Production is the creation of goods and services which have got utility, money, value and capability of being transferred (wealth).
-Products in terms of goods and services so produced are referred as wealth if they have such features as;
-Possession of ability to satisfy a human being i.e. utility,
-Possession of money value,
-Capability of being transferred i.e. transported from one place to another.
- C) PRODUCTION AS THE COMBINATION OF FACTOR INPUTS
Production is the process of combining factor inputs to produce factor outputs.
-Production is done upon the mixture of factor inputs to be utilized in the production process.
-Factor inputs include such factors as labor, capital, land and entrepreneurship which are essential in production.
-Factor output to be produced include goods and services
- D) PRODUCTION AS THE CREATION OF UTILITIES
Production is the creation of utility.
-utility is the ability of goods and services to satisfy human wants.
-Utilities are classified as elemental, form, place, time, ownership and possession utilities.
- E) PRODUCTION AS THE DESTRUCTION OF UTILITIES
Production is the destruction of utilities.
-The satisfaction of wants must necessarily involve the destruction of goods and services possessing utility over a period of time.
-Utility destruction is also referred to consumption i.e. the eating of goods and services e.g. a loaf of bread or using banking services.
-The rate of consumption differs but the process is essentially the same.
- F) PRODUCTION AS THE INCREASE IN THE UTILITY
Production is the increase in the utility of a commodity.
-From the first stage of production, through the middle one to the last stage, the degree of utility increases accordingly and respectively.
- G) PRODUCTION AS AN ECONOMIC ACTIVITY
Production is an economic activity that results in the creation of goods and services for satisfaction of human wants.
-Production is the major economic activity and is the basis of all other economic activities of exchange, distribution and consumption.
-Generally human wants include food, shelter, clothes, education; health etc.which must be produced by the human beings for them to satisfy their desires.
PRODUCTION IN DAY TO DAY USE
In daily use, the term production has been used by people just to mean the process of making article s by natural process or by agriculture or manufacture. In this case production has always been related just to a sequence of machinery and workers through which things move to undergo successive stages of production for example in the factory, farms, mining etc.
PRODUCTION IN COMMERCE
As a commercial term, production is not limited to the activity that changes the physical or chemical nature of something in order to make it useful. This is the ordinary meaning of the word production.
-In commerce, production means any other activity that increases the ability of the goods to satisfy somebody’s needs.
-Therefore, productions involve such tasks as;
1) Physical or chemical change of raw materials into finished goods by producers
2) Exchange and distribution of finished goods to consumers through buying and selling, communication and transportation, storage etc by both distributors and consumers.
THE NATURE OF PRODUCTION
-The nature behind production is the general satisfaction of human wants, thus mean a human being engage in production of goods and services not only for living, but also for enjoyment. Goods like food, clothing, education etc make our lives comfortable and more meaningful.
-Some of the goods and services necessary to life may be produced by a person himself but for a given majority of them he has to depend on others. Thus mean, in modern economies we have to depend one another in producing various kinds of goods and services for exchange.