Defining The Key Terms of Production
Conversion Process
The resources used to fulfill economic needs or wants.
Economic Resources
The production activity where the orders for production to begin are released.
Dispatching
All of the resources put into the production process to produce outputs. Examples include the timber used to manufacture furniture, the fabrics used to stitch clothing, and the flour used to make baked goods.
Inputs
The goods used to produce other goods.
Capital Goods
Production Activity where the order of the production process steps is determined.
Routing
The result of putting the inputs into the production process. Examples include furniture produced with timber, clothing produced with fabrics, and baked goods produced with flour.
Outputs
Resources obtained directly from the Earth, such as wood from trees or minerals from mountains.
Natural Resources and/or Raw Materials
Production Activity where a business answers the following questions: How to produce our products and how many products to produce.
Planning
The economic process of using inputs (resources) to produce goods & services (outputs)
Production
The result of the gap between unlimited want for goods/services and limited resources to fulfill those wants.
Scarcity
The production activity where time is allocated to the different steps of the production process.
Scheduling
All of the day-to-day activities a business engages in during production.
Operations
Capital Goods, Raw Materials/Natural Resources, & Human Resources
The production activity where a business checks its production process to ensure that everything went according to plan and met business deadlines & expectations.
Follow-Up