Business Igcse Summary Chapter 12
CHAPTER -12
ORGANIZING PRODUCTION
Production- is any activity designed or to manufacture goods & services to satisfy people’s wants. The firm uses the resources of land, labour, capital (input) to make goods and services (output)
The people who make and sell goods and services are known as producer and the people who use these goods and services to satisfy their wants and needs are known as consumer.
Stages of production
1. Primary sector- also known as extractive industries
It is the first sector in which we extract raw materials from the earth and use it.
E.g. mining, fishing, oil drilling, farming, wood cutting… etc.
2. Secondary sector
In this sector we convert the raw materials into finished products or to manufacture goods.
E.g. construction and manufacturing
• Glass is made up of sand
• Paper is made up of wood.
3. Tertiary sector –also known as service sector
This section provides service to the consumers and other sectors of the economy. E.g. banking, insurance, tourism, hotels, transports, education, shops, showrooms… etc
What is the aim of production?
Maximizing profit by satisfying consumer needs & wants
Profit is reward to successful business owners or entrepreneur, for taking the risk of setting up a firm.
Other objectives
• Providing public services
• Providing a charity
• Non-profit making organization
✓ Labour intensive method
✓ Capital intensive method
Factor substitution-when a firm tends to replace labour with more capital .it is known as factor substitution.
?WHAT IS PRODUCTIVITY
The amount of output that can be produced from a given input of resources is called productivity. To increase in productivity means more output or revenues can be produced from the same input of labour and other resources. The main aim of any business is to combine its resources in the efficient way.
For example –a
ORGANIZING PRODUCTION
Production- is any activity designed or to manufacture goods & services to satisfy people’s wants. The firm uses the resources of land, labour, capital (input) to make goods and services (output)
The people who make and sell goods and services are known as producer and the people who use these goods and services to satisfy their wants and needs are known as consumer.
Stages of production
1. Primary sector- also known as extractive industries
It is the first sector in which we extract raw materials from the earth and use it.
E.g. mining, fishing, oil drilling, farming, wood cutting… etc.
2. Secondary sector
In this sector we convert the raw materials into finished products or to manufacture goods.
E.g. construction and manufacturing
• Glass is made up of sand
• Paper is made up of wood.
3. Tertiary sector –also known as service sector
This section provides service to the consumers and other sectors of the economy. E.g. banking, insurance, tourism, hotels, transports, education, shops, showrooms… etc
What is the aim of production?
Maximizing profit by satisfying consumer needs & wants
Profit is reward to successful business owners or entrepreneur, for taking the risk of setting up a firm.
Other objectives
• Providing public services
• Providing a charity
• Non-profit making organization
✓ Labour intensive method
✓ Capital intensive method
Factor substitution-when a firm tends to replace labour with more capital .it is known as factor substitution.
?WHAT IS PRODUCTIVITY
The amount of output that can be produced from a given input of resources is called productivity. To increase in productivity means more output or revenues can be produced from the same input of labour and other resources. The main aim of any business is to combine its resources in the efficient way.
For example –a