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Types
of production
Yvonne
Harvey, Contributor
Hello
friends. I will begin this lesson
by stating the specific objectives
for types of production and levels
of production. Types of production
will be covered this week and levels
of production will be covered next
week.
Definitions
are important in principles of business.
Therefore, before a discussion of
this topic, we will first define the
term production.
Production
refers to the combining of the factors
to create goods and services to satisfy
people's wants and needs. The types
(stages) of production should not
be confused with the levels of production.
The
levels of production classify the
amounts of goods and services produced
under three different headings:
- subsistence
- domestic
- surplus
or export levels.
These
levels of production will be considered
next week.
When
we produce, the activities carried
out fall under different headings,
known as the stages, types or branches
of production. Production can be placed
under three or four such stages, types
or branches.
Three
stages of production
Primary
Production
The
industries involved in primary production
are known as extractive industries.
This is the raw material stage of
production. Raw materials are extracted
from the environment. Examples of
primary production include mining,
fishing, lumbering, quarrying, agriculture,
and so on. In the Caribbean region,
agriculture is an important primary
activity. Most Caribbean countries
produce sugar cane, bananas and a
variety of fruits.
Secondary
Production
Secondary
production is also referred to as
the manufacturing and construction
stage of production. Secondary production
cannot take place without primary
production. This stage of production
involves putting the raw materials
extracted at stage one together to
make finished or semi-finished goods.
It also includes all kinds of construction
work. Examples of manufacturing include
sugar cane to rum, bauxite to aluminium,
lumber to furniture and coffee beans
to coffee, etc. Construction involves
construction of houses and other buildings
and the construction of roads, bridges
and so on.
Tertiary
Production
The
third stage of production is also
called the service stage of production.
It involves the provision of indirect
(impersonal) and direct (personal)
services. The indirect services are
all those used to distribute the goods
produced in the secondary stage of
production. These services include
those of the wholesaler, retailer,
importer, exporter, insurance, transportation,
and so on. The direct services include
the services of doctors, nurses, teachers,
hairdressers, plumbers, electricians,
and so on. In the Caribbean, tourism
is an important area under tertiary
production. The personal touch provided
to our visitors earns us much-needed
foreign exchange.
The
four stages of production
When
considering four stages of production,
the primary stage is the same as when
considering three stages. However,
the secondary stage will involve only
manufacturing and not manufacturing
and construction. Construction will
fall under the tertiary stage and
all services, direct and indirect,
will fall under the fourth stage,
known as the quaternary stage.
With
the information discussed on the three
stages of production, you can construct
a similar diagram to the one above.
Your steps will begin with primary
and end with tertiary.
Most
production in the Caribbean region
falls under the primary stage of production,
though some will be secondary and
a small amount tertiary. In countries
that are more developed than those
in our region, the majority of productive
activity is under the manufacturing,
construction and service stages.
Implications
The
implications of this, is that primary
production does not earn much income
for a country, whereas manufacturing,
construction and service industries
earn much more. It is clear that countries
in the Caribbean need to concentrate
on developing activities that fall
under the stages beyond the primary
stage of production.
You
task this week is to
(a)
Define production (2 marks)
(b)
Explain what is meant by stages of
production (2 marks)
(c)
Classify the following areas of production
under the appropriate stage (use three
stages of production)
(i)
bauxite
(ii)
lumbering
(iii)
coffee processing
(iv)
nursing
(v)
selling
(vi)
building a school
(vii)
constructing a road
(viii)
harvesting cotton
(ix)
making pots
(x)
dentistry
(10
marks)
(d)
Discuss the interdependence of the
primary, secondary and tertiary stages
of production. (6 marks)
TOTAL:
20 marks
Next
week, I will give you the answers
to part (c) of the question and provide
an outline for answering part (a).
In addition, we will cover levels
of production.
Take
care. See you next week.
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Donald
Mullings, CEO of M&M Jamaica
Ltd, warmly greets each student
and offers words of encouragement
at the recent Chance Fund bursaries
presentation. M&M Jamaica
awarded some 148 secondary-school
students from 21 schools islandwide
with scholarships.
- CONTRIBUTED
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Yvonne
Harvey teaches at Glenmuir High School.
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