The action of making a product by using raw materials
What is Production
Production
Factors of Production
There are 6 types of factors of production
Capital
The money invested in a business
Non-liquid
Capital goods (buildings etc.)
Intellectual Property - rights that allow one to make an income off an invetion
Liquid
cash, stocks, bonds, accounts receivable
Labour
All the physical and mental work needed to produce goods
Consolidated
small divisions closed down
and focused on one area
Automated
work done by machines
Outsource
Hire other companies to preform tasks
Management
People who control the factors of production
Decide what to purchase, what to make, whom to hire,
where to sell, etc.
Higher level managers decide how profits are used
Information
Required to produce goods and services in an economy
Information itself has become a product for sale. A business
can provide interesting data for free over the internet, and charge companies to advertise it.
Raw Material
The use of goods to make another good
Ingredients
Raw materials that go into a product
Supplies
Raw materials that do not become part of the product. However, they are used in the running of the business
Natural Resources
There are 6 types of natural resources, known as the primary industries which include energy, forestry, agriculture, fishing, water and mining
