PRODUCTION
Production is the business activity of using resources to make
goods and provide services.
GOODS= are physical products (ex. Food, car)
SERVICES= are not physical products, they are actions that
people perform to assist other people (such as education,
healthcare)
Goods and services are produced to meet the needs and wants
of consumers.
NEEDS are things that are essential for survival. The five basic
needs are food, water, clothes, housing and warmth.
WANTS are things that are not essential for survival, such as
smartphone, holiday.
The resources used to make goods and provide services are
factors of production:
1. LAND= natural resources which can be used for the
activity
2. LABOUR= the number of people willing to work
3. CAPITAL= the money available for the building,
equipment that help production
4. ENTERPRISE= the people who invest money and
organize production
SECTORS OF PRODUCTION
Business operate in 3 sector of production:
1. PRIMARY PRODUCTION= industries which acquire raw
materials to make other products, such as agriculture, oil
industries, fishing.
2. SECONDARY PRODUCTION= is the manufacturing or
assembly process. Raw materials are converted into semi-
finished or finished goods, such as building, clothing and
food.
3. TERTIARY PRODUCTION= provides services which assist
and give commercial, financial support to produces and
consumers. Include transport, teaching, insurance,
defence.
THE SUPPLY CHAIN
