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What is flow of Production ?

It means producing different goods and services using various inputs.

Important points

  1. Production may be of goods or services

          Output of One production process may become Input of Other Production Process

INPUT ----------------------------> OUTPUT

RAW MATERIAL                        FINISHED PRODUCT

 

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Note

Output of One production process may become Input of Other Production Process

Example

Suppose a Farmer produces Raw Cotton

He sells it to spinning mill

Spinning mill produces yarn which it sells to Textile Mill

Textile Mill produces cloth which it sell to a tailor

This Tailor produces a shirt from this cloth and sells it to a Consumer

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Note

During a production process, a product looses its specific characteristics and get transformed into a completely new product

Example

Yarn is completely different from cotton, cloth is different from yarn and shirt is completely different from cloth

Farmer ---------> Spinning Mill ---------> Textile Mill ---------> Tailor ---------> Consumer

        I                            I                                         I                              I

   Produces              Produces                          Produces                Produces

   Raw Cotton               Yarn                                 Cloth                      Shirt

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Note

During a production process, a product looses its specific characteristics and get transformed into a completely new product

Example

Yarn is completely different from cotton, cloth is different from yarn and shirt is completely different from cloth

 

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Transcript

It means producing different goods and services using various inputs. Important points Production may be of goods or services Output of One production process may become Input of Other Production Process WHAT IS FLOW OF PRODUCTION It means producing different goods and services using various inputs INPUT-------------------------------->OUTPUT PRODUCTION Example PRODUCTION OF GOODS PRODUCTION MANGO (Inputs) MANGO JAM (Outputs) Note Mango is different from Jam During a production process, a product looses its specific characterstics and get transformed into a completely new product Note Output of One production process may become Input of Other Production Process PRODUCTION MAY BE OF SERVICE ALSO A taxi Operator buys a Car to Provide Transport Service PRODUCTION OF SERVICES Car (Inputs) Trassport Service (Outputs) Note During a production process, a product looses its specific characteristics and get transformed into a completely new product Example Yarn is completely different from cotton, cloth is different from yarn and shirt is completely different from cloth Output of One production process may become Input of Other Production Process Farmer Produces Raw Cotton Spinning Mill Produces Yarn Textile Mill Produces Cloth Tailor- Produces Shirt Consumer Cotton is Output for Farmer Input for Spinning mill Yarn is Output for Spinning mill Input for Textile Mill Cloth is Output for Textile Mill Input for Tailor Shirt is Output for Tailor Final Product for Consumer

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 12 years and a teacher from the past 16 years. He teaches Science, Economics, Accounting and English at Teachoo