nit-3 PRODUCTION CONCEPTS AND ANALYSIS POE | BBA First Year

 PRODUCTION CONCEPTS AND ANALYSIS POE | BBA First Year–Hello everyone welcome to the pencilchampions.com website. This website provide Unit-3 production concepts and analysis principle of Economic BBA, BCA, B.COM, M.COM Notes. This Notes helpful for all student. Thankyou for visiting pencilchampions.com.

 Definition Production concepts and analysis 

• Production is a process of combining various inputs to produce outputs for consumption. It is the act of producing output in the form of a good or service that contributes to the utility of individuals.
• In other words, it is a process in which inputs are converted into outputs.
• The basic proposition of the production concept is that customers will select products and services that are widely available and low cost. Therefore business is mainly concerned with producing more and more units. By focusing on producing the maximum quantity, such a business aims to maximize profitability by taking advantage of economies of scale.
  

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2Definition Production concepts and analysis 

• Managers try to achieve higher volume with low cost and intensive distribution strategy. This appears to be a viable strategy in a developing market where market expansion is a survival strategy for the business. Companies interested in taking advantage of economies of scale take this type of direction.
• In a production-oriented business, customer needs are secondary to the need to increase production. Such an approach is probably most effective when a business operates in very high-growth markets where opportunities or economies of scale are important. It is natural that companies are not able to deliver quality products and suffer from problems arising from impersonal treatment of customers.

Note Production concepts and analysis 

•  At such a time, the more you produce, the greater will be the consumption of the product. A case in point is Ford, which produced a large number of automobiles through its manufacturing assembly line which was the first of its kind.
• Production is a process of converting factors of production into economic goods. So in the context of production analysis we are dealing with physical relationships between inputs and outputs (i.e. we are looking at the dependence of physical output quantities on the physical quantities of inputs).

PRODUCTION ANALYSIS

• Production analysis basically deals with the analysis of how resources such as land, labor and capital are employed to produce the final product of a firm. The basic inputs to produce these goods are classified into two divisions –

1. Variable Input

• Those inputs that change or are variable in the short or long term are variable inputs.

2. Fixed input

• Inputs which remain constant in the short run are fixed inputs.

RULES OF PRODUCTION

• The laws of production describe technically feasible ways of increasing the level of production. Output can increase in various ways.
•  Thus the laws of returns to scale refer to the long-term analysis of production.

 2RULES OF PRODUCTION

• The(marginal product of variable factors) will eventually decrease as more and more amounts of this factor are added to other fixed factors. 
• The laws of production in economics are related to the concepts of cost and producer equilibrium. It is an important aspect of economics because it helps a business determine the level of production that maximizes profits. It also defines various variable and fixed costs of the firm.

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