The essential components necessary for producing goods and services encompass several key elements. Effective management is crucial as it involves allocating resources, making purchasing decisions, hiring staff, and determining the distribution of profits.
Supplies: The raw materials that do
not become part of new product.
Ingredients: The raw materials that
go into a product.
Any goods used in the manufacturing
of other goods.
Information
New technology, customers, competition, political conditions and sources of supply
To produce goods and services
competitively in a global economy
requires information.
Management
Management allocates the company resources, both capital and human, and decides whats purchase, what to make. Whom to hire, where to sell. Higher level managers also decide how a business's profits will be distributed
People who control the factors of production
Labour
Labour is a very expensive cost of doing
business, and many firms are constantly
looking for way to save money, so they
use outsources
Includes all the physical and mental
work needed to produce goods or services
Natural Resources
Everything in the world is made from only six types of natural resources
Agriculture, fishing and trapping, mining, water, fuel and energy, and logging and forestry
