The Production Process Economics: 10.3 The Production Process

Learning target Students will learn about the process that companies go through to produce goods and services that satisfy consumer needs and wants.

Success Criteria Students will be able to identify the steps in the production process. Students will be able to explain how technology influences the production process. Students will be able to analyze each business adaptation increases business efficiency.

Production Process After businesses obtain financing they can get to work producing the goods or providing services. This involves many steps of careful planning including getting raw materials from suppliers on time.

Production Process Production – Process of changing resources into goods that satisfy the needs and wants if individuals and businesses. One category of production is consumer goods. Consumer Goods – Goods produced for individuals and sold directly to the public to be used as they are. Besides actually manufacturing the good the production process involves planning, purchasing, quality control, and inventory control.

Steps in Production Operation Planning includes choosing a location and scheduling production. Location factors to consider: nearness to markets, raw materials, labor supply, and transportation facilities. A business also needs to be able to get their product to the consumer so they will need access to highways, railroads, airlines, and pipelines to deliver their product.

Steps in Production Operation Purchasing Agents – People that determine what to buy, from whom, and at what price for a business. To get the best deal they must consider the price and quality of raw materials, office supplies, and machinery. Purchasing agents also have to consider issues such as insurance and shipping rates/times.

Steps in Production Operation Quality Control – Involves overseeing the grade or freshness of goods, their strength or workability, their construction or design, safety, and adherence to various standards. Quality control systems can be simple like testing one item per thousand produced or testing each product after it is finished.

Steps in Production Operation Almost all manufactures and many service business like dry cleaners need inventories of the materials they use in making their product/services. Production can come to a halt if inventory runs out and many businesses keep stock piles of finished goods on hand for sale. Ex: Supermarkets

Steps in Production Operation Inventories are costly and the more inventory a business has the less capital it has for other activities. Ex: It costs money to warehouse and insure goods against fire and theft. Some goods may spoil and others may become obsolete.

Rally Robin Define production and consumer goods. Describe each step in the production process. What must purchasing agents consider before buying goods for a business?

Success Criteria Students will be able to identify the steps in the production process. Students will be able to explain how technology influences the production process. Students will be able to analyze each business adaptation increases business efficiency.

Technology and Production Mechanization – Combined labor of people and machines. With the introduction of spinning machines and weaving machines during the Industrial Revolution (1700s) companies were able to produce more goods in a period of time. This allowed for an increase in output which meant an increase in profit.

Technology and Production Assembly Line – Production system in which the good being produced moves on a conveyor belt past workers who perform individual tasks assembling it. The Ford Motor Company developed the assembly line process early in the twentieth century. The assembly line results in more efficient use of machines and labor which makes the costs of production drop.

Technology and Production Division of Labor – The breaking down of a job into small tasks performed by different workers. A different worker specializes in different tasks. Division of labor allowed the assembly line process to succeed.

Technology and Production Automation – Production process in which machines do the work and people oversee them. This is very common in American society and have improved the efficiency of machines. Ex: Traffic lights

Technology and Production Robotics – Sophisticated, computer-controlled machinery that operates an assembly line. In some industries, robotics regulate every step of the manufacturing process. Machines select the raw materials, process the goods, packaging, and inventory control.

Rally Robin Define mechanization, assembly line, division of labor, automation, and robotics. Explain how efficiency increased in each process (mechanization, assembly line, division of labor, automation, and robotics). Give an example of automation.

Success Criteria Students will be able to identify the steps in the production process. Students will be able to explain how technology influences the production process. Students will be able to analyze each business adaptation increases business efficiency.