THE SCOPE OF PRODUCTION
-To make the satisfaction of human wants possible, the gap between those who make the goods (Producers) and those who will use them (consumers) must be bridged.
-The following questions must be answered in order to satisfy the wants of consumers;
A-How will the goods be bought into the form in which they could be used by consumers?
B-How many goods (ready to be used) be brought within in the reach of consumers?
These questions can be answered by observing and implementing all the aspects within the scope of production.
-The production process is said to be complete only after the goods and services are in the hands of the final consumers ready for consumption. Or in other words, the process of production is not complete until a commodity has reached the person who wishes to make use of it. Production is not complete if there is no consumption.
-Therefore production consists the following two (2) major processes to make production complete;
- Changing the form of commodity-Changing the form of things e.g. raw materials into useful condition i.e. finished goods ready for consumption, and
- Making sure that those produced goods and services reaches the person who wishes to make use of them at right place, time, quantity, quality and price. At this juncture, various activities which facilitate transfer of goods and services from the areas where they are produced to where they are demanded for consumption are involved including;
-Transportation.
-Communication.
-Warehousing.
-Insurance.
-Market research.
-Banking and Finance.
-Advertising.
-Retailing, wholesaling, export and import.
-Business consultancy.
-Security etc.
These and the rest of such commercial and direct services, if are well done, consumers are able to acquire goods and service they desire at right place, time, quantity, quality and price, and at last they get maximum satisfaction.
-The effective satisfaction of needs requires the cooperation of many people of widely differing skills and the close integration of commercial and industrial personnel, to ensure that the changing demands and needs of consumers.
-Therefore, production in the commercial word means the increase in the utility of a commodity. Thus anyone who, in any way, increases the usefulness-utility-of a commodity from initial to final stage is a productive worker engaging in such activities as;
-Changing the form of the raw materials into finished commodity e.g. cotton into a piece of cloth under the supervision of personnel who engage either directly or indirectly e.g. production engineers and managers.
-Transporting the finished commodity e.g. clothes from where they are produced to where they are needed for consumption i.e. to the consumers by transporters.
-Storing the commodities in the warehouses waiting for further production or selling
-Making the public aware of its existence by advertising through advertisers or
-By selling the products to the consumers through such traders as retailer, wholesalers, importer and exporters.
All these and many others participate in the production process, and in one way or another, participate effectively in increasing the value of commodity.
-Therefore we can conclude that production is much more than the making of material goods. THE TERM INCLUDES ALL THE ACTIVITIES THAT PEOPLE ARE PREPARED TO PAY FOR IN ORDER TO SATISFY THEIR WANTS. It covers all the services involved between the INIATIATION OF PRODUCTION AND THE PURCHASE BY THE FINAL CONSUMERS.
THE HUMAN NEEDS AND WANTS
The satisfaction of human needs and wants or in general human wants, is the basis of all economic activities. Human wants are the real motive force which sets the entire economic organization in motion. Human wants give rise to efforts which in turn create goods and services which give satisfaction.
TYPES OF HUMAN WANTS
Human wants include;
(A)BASIC OR PRIMARY WANTS (HUMAN NEEDS OR NECESSARIES)-Which are essential for human existence e.g. food, shelter, clothes etc
(B)SECONDARY WANTS (HUMAN WANTS)-Which are very essential for the survival of human beings but the satisfaction of these wants improves the standard of living and human being feel more comfortable and happy e.g. better education and medication, TV set, refrigerator etc.