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Transforming resources into goods and services


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Transforming resources into goods and services

  1. 1. Transforming Resources into Goods and Services
  2. 2. Challenge <ul><li>In teams of four you are to undertake the production challenge. </li></ul><ul><li>You have 5 minutes to make key decisions and then 10 minutes to produce your products </li></ul>
  3. 3. Production <ul><li>Production is the transformation of resources into goods or services </li></ul><ul><li>Production takes place when a business takes Inputs , carries out a Process , and produces an Output </li></ul><ul><li>Inputs are the factors of production used, ie, raw materials and components </li></ul><ul><li>Outputs are the goods and services produced </li></ul><ul><li>Processes are the methods used to convert the raw materials and components into products </li></ul>
  4. 4. Resources (Inputs) <ul><li>We call these factors of production: </li></ul><ul><ul><li>Land: The term ‘land’ incoporates all the natural resources that can be used for production, e.g. coal, oil, wood, livestock, fish, water etc </li></ul></ul><ul><ul><li>Labour: This involves both the physical and mental effort involved in production </li></ul></ul><ul><ul><li>Capital: This means goods that are made in order to produce other goods and services e.g. buildings, machinery, vehicles, computers </li></ul></ul><ul><ul><li>Enterprise: Bringing together other factors e.g. making decisions, providing finance, making risks </li></ul></ul>
  5. 5. Resources (Inputs) <ul><li>What did you use on your production challenge? </li></ul><ul><ul><li>Land </li></ul></ul><ul><ul><li>Labour </li></ul></ul><ul><ul><li>Capital </li></ul></ul><ul><ul><li>Enterprise </li></ul></ul>
  6. 6. Pizza Factory <ul><li>Watch the following clip: </li></ul><ul><ul><li> </li></ul></ul><ul><li>What can you tell about the inputs in this factory? </li></ul>
  7. 7. The Transformation Process <ul><li>The Transformation Process is how a business turns it’s inputs into outputs. </li></ul><ul><li>Feedback is important, as it allows a business to make changes to the process, e.g. suppliers </li></ul>
  8. 8. Outputs <ul><li>These can be both goods and services, but is what the business produces </li></ul><ul><li>3 Main categories </li></ul><ul><ul><li>Primary Sector </li></ul></ul><ul><ul><li>Secondary Sector </li></ul></ul><ul><ul><li>Tertiary Sector </li></ul></ul><ul><li>What do you understand of these sectors? </li></ul>
  9. 9. Adding Value <ul><li>As a business produces a product or service it aims to add value, e.g. building a house! </li></ul>
  10. 10. Exercises <ul><li>Practice Exam Questions </li></ul><ul><ul><li>In RMShared > Business AS > Unit 1 learning materials > Transforming Resources into Goods and Services > Questions </li></ul></ul><ul><li>HOMEWORK: Gourmet Burger Case Study </li></ul>