Gr8 Business: Lesson 1

“Production of Goods and

Services”
Objectives:
- Define production and productivity.
- Recognize the stages in the process of production.
- Recognize the difference between production and productivity.
- List the benefits of increasing productivity.
 Think!
• What is production? 
• Production is a process of value addition (meaning you add value to
something)
• How do you do that? 
• This process of adding value is done by transforming a set of elements
(land / people … etc.) through a production system in order to get an
output. (This output can be goods or services.)
• Why do you do that? 
• To satisfy customer wants and needs.
So in order to have a production you need
production factors… right?
??

?? Factors of ??
Production

??
What are the four factors of production?

Nature / natural
resources

Enterprise Factors of Labor

Production

Capital = money
Factors of Production
Factors are used to make a production…
YUP!
• If you want to increase production then you would
want less people and more machines.
Difference between Labor and Capital Intensive Production:
Groups: Think!
• Would developed countries or a developing country
use capital intensive? Justify your answer.
Process of production: (See the example p.4)
Think: How can productivity be increased?
• Productivity can be raised by either using fewer inputs to produce the
same output or using the same inputs to produce a higher level of
output.
• Example: If employees become more efficient, the amount of output
produced per employee will rise and therefore the costs of producing
each product will fall.
What is the equation of measuring productivity?
See the Case Study (p.5)
So what can you do to increase productivity?
Replace employees with machines – automation
Motivate employees more effectively.
 There are a number of ways to increase
productivity and efficiency. These include:
1- Improve quality of the product and inventory control to reduce waste.
2- Replace employees with machines – automation.
3- Improve training to increase employee efficiency.
4- Motivate employees more effectively.
5- Introduce new technology.
6- Use more automation
(P.5) Think: What are the benefits of
increasing productivity?