Meaning of Production

Production involves all those activities which are needed so that goods and services can be used by members of the public. Production therefore, includes the provision of goods – which can be seen and touched; the provision of services which cannot be seen and touched.

Producers can be divided into industrial workers, commercial workers, direct service workers.

Industrial workers can be divided into (a) extractive, (b) manufacturing, and (c) constructive workers.

Extractive workers take materials and food from the land and the sea. Examples of such workers are coalminers, fishermen and farmers.

Manufacturing workers use the raw materials produced by extractive industry and change them into products which can be used by other firms and the public. In this case the outputs are very different from the inputs.

Constructive workers take the products of extractive and manufacturing industries and build, for example, houses, roads, cars and computers. In this case the inputs are put together (assembled) into outputs which are usually not very different from the inputs.

Commercial workers are involved in the distribution of the goods produced by industrial workers to those who wish to buy them. The types of work which make up commerce are shown in Fig.1.

Commerce