The document discusses production and the factors of production. It defines production as the process of transforming inputs like raw materials, labor, capital, etc. into finished goods and services. The objective of production is to satisfy demand for these transformed goods and services. Production involves various processes that add utility to natural resources by changing their form or location. The factors of production discussed are land, labor, capital and entrepreneurship. Land provides space and natural resources. Labor refers to any human physical or mental effort used to produce goods and services. Capital includes man-made goods and instruments used for further production. The entrepreneur coordinates the factors of production, initiates the production process and bears the risks involved.
Entrepreneurship Development - IntroductionSOMASUNDARAM T
Introduction to Entrepreneur; Entrepreneurship and Enterprise; Importance and relevance of the entrepreneur; Factors influencing entrepreneurship; Pros and Cons of being an entrepreneur; Women entrepreneur; problems and promotion (SHGs); Types of Entrepreneurs; Characteristics of a successful entrepreneur; Competency requirement for entrepreneurs; Awareness of self-competence.
Multiple objectives of the Business, Precautions to start a business, Tax planning, Human resource planning, Marketing, Production, Plant layout, Plant location,
The document discusses working capital management and provides an overview of the key aspects of working capital including financing working capital, inventory management, cash management, and receivables management. It then outlines the contents which include introductions to working capital management, NALCO, and the aluminum industry as well as chapters on data collection, conclusions and recommendations. The objective of the study is to understand NALCO's working capital management and suggest improvements.
Peter Drucker suggested that corporate objectives should cover eight key areas: market standing, innovation, productivity, physical and financial resources, profitability, management, employees, and public responsibility. The document then discusses the basic factors to consider when starting a business, including selecting a line of business, determining the business size, choosing an ownership form, selecting a location, financing, physical facilities, plant layout, workforce, tax planning, and launching the enterprise. It provides details on each of these factors.
Management by Cycling Around’ Peter Drucker
shown in the Movie “Intern”, Management by Objectives, Profit Motive, selection of location, layout, capital
A critical analysis of funds management in selected cement industries [www.wr...WriteKraft Dissertations
We started this Academic Writing Help in the year 2011.Writekraft Research & Publication: www.writekraft.com 1000s of students have graduated across the globe from our in-depth research.
We help students with the following services:
1. Thesis Writing (from 50 pages and above)
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Land Securities Group is a UK commercial property company that combines factors of production to achieve growth. It manages a property portfolio worth £8 billion using land, labor, capital, and enterprise. Land Securities develops large projects like office blocks and retail centers through contracting work. It employs nearly 2,000 people and manages risks through a balanced investment portfolio of varying risk levels. The company works to efficiently utilize land resources and comply with environmental regulations.
Entrepreneurship Development - IntroductionSOMASUNDARAM T
Introduction to Entrepreneur; Entrepreneurship and Enterprise; Importance and relevance of the entrepreneur; Factors influencing entrepreneurship; Pros and Cons of being an entrepreneur; Women entrepreneur; problems and promotion (SHGs); Types of Entrepreneurs; Characteristics of a successful entrepreneur; Competency requirement for entrepreneurs; Awareness of self-competence.
Multiple objectives of the Business, Precautions to start a business, Tax planning, Human resource planning, Marketing, Production, Plant layout, Plant location,
The document discusses working capital management and provides an overview of the key aspects of working capital including financing working capital, inventory management, cash management, and receivables management. It then outlines the contents which include introductions to working capital management, NALCO, and the aluminum industry as well as chapters on data collection, conclusions and recommendations. The objective of the study is to understand NALCO's working capital management and suggest improvements.
Peter Drucker suggested that corporate objectives should cover eight key areas: market standing, innovation, productivity, physical and financial resources, profitability, management, employees, and public responsibility. The document then discusses the basic factors to consider when starting a business, including selecting a line of business, determining the business size, choosing an ownership form, selecting a location, financing, physical facilities, plant layout, workforce, tax planning, and launching the enterprise. It provides details on each of these factors.
Management by Cycling Around’ Peter Drucker
shown in the Movie “Intern”, Management by Objectives, Profit Motive, selection of location, layout, capital
A critical analysis of funds management in selected cement industries [www.wr...WriteKraft Dissertations
We started this Academic Writing Help in the year 2011.Writekraft Research & Publication: www.writekraft.com 1000s of students have graduated across the globe from our in-depth research.
We help students with the following services:
1. Thesis Writing (from 50 pages and above)
2. Dissertation writing
3. Research Writing for Publishing
4. Data Analysis
5. Research Proposal Writing
6. Study Plan
7. Plagiarism Report
Contact us at admin@writekraft.com OR call us on +917753818181, +919838033084
The charges are fair and we allow negotiations as per the student’s budget. You can also inbox me for more direction.
Land Securities Group is a UK commercial property company that combines factors of production to achieve growth. It manages a property portfolio worth £8 billion using land, labor, capital, and enterprise. Land Securities develops large projects like office blocks and retail centers through contracting work. It employs nearly 2,000 people and manages risks through a balanced investment portfolio of varying risk levels. The company works to efficiently utilize land resources and comply with environmental regulations.
The documents discuss various factors that affect entrepreneurial growth and business opportunities. Some key factors include the economic, social, cultural, psychological, technological, and political environments. A proper feasibility analysis should consider the economic, technical, financial, and market viability of a potential business opportunity or idea. Location selection is also important and involves analyzing demographic trends, competition, traffic patterns, and costs associated with different site options. The objective is to select a location that minimizes costs while allowing for smooth business operations and access to resources and customers.
small business & epreneurship development U2.pdfkittustudy7
The document discusses entrepreneurial environment and the entrepreneurial development process. It defines entrepreneurial environment as a place that emphasizes identifying and pursuing opportunities while accepting calculated risks. It notes that entrepreneurial environment includes factors like government policies, access to financing, and the legal system.
The entrepreneurial development process is summarized as having five phases: idea generation, opportunity evaluation, planning, company formation/launch, and growth. Opportunity evaluation involves determining if an opportunity is worth investing in. Planning creates a business strategy and operating plan. Company formation makes the venture a legal entity.
This document discusses entrepreneurship and entrepreneurship development. It defines an entrepreneur as someone who innovates, takes risks, and exploits opportunities to start new businesses. Entrepreneurship involves perceiving opportunities, organizing resources, and handling uncertainty to establish new enterprises. The key functions of an entrepreneur are raising capital, hiring staff, obtaining supplies, and managing the business. Entrepreneurship development programs aim to cultivate entrepreneurial skills and provide support like financing, workspaces, and technical training to promote self-employment and business creation. Factors that encourage entrepreneurship include financial assistance, infrastructure, market demand, collaboration opportunities, and government support policies.
This document provides an overview of a project report on establishing a small-scale steel almirah manufacturing unit. It acknowledges those who helped with the project and provides a table of contents that outlines chapters on entrepreneurship, financial requirements, marketing, product details, manufacturing process, cost estimation, and break-even analysis. The introduction chapter defines small-scale industries in India and their importance for employment and economic growth. It also outlines the government's strategy and support for small businesses.
theory of production ( EEM PPT / SEM 4 GTU )tejaspatel1997
The document provides information about the theory of production and the factors of production.
It begins with an introduction to the theory of production, defining it as the process of converting inputs into outputs. It then discusses the production function and how it represents the relationship between inputs and outputs.
The main body of the document is dedicated to explaining the four factors of production: land, labor, capital, and entrepreneurship. It provides examples and definitions for each factor.
The document concludes by discussing some concepts that influence entrepreneurial decision making, such as scarcity, opportunity cost, and productivity. It emphasizes how entrepreneurs must use resources efficiently to maximize profits.
The document defines an entrepreneur and discusses their essential characteristics and functions. It states that an entrepreneur is an innovator who exploits opportunities through risk-taking and the conversion of resources. The key characteristics of an entrepreneur are listed. It then discusses the five main functions of an entrepreneur: risk-bearing, organizational, innovative, managerial, and decision-making. Finally, it defines entrepreneurship and elaborates on its vital role in developing economies through employment generation, increasing national income, balanced regional development, dispersing economic power, and improving standards of living.
This document provides an overview of key concepts for organizing and planning a business. It discusses stakeholders like owners, employees, customers, and suppliers. It outlines important business functions such as management, marketing, finance, and accounting. It also explains how business decisions can impact earnings and provides examples of common decisions. Finally, it stresses the importance of developing a business plan and considering factors like competition, customers, and expenses.
The document discusses the key factors of production - land, labor, capital and enterprise. It defines each factor and provides classifications and characteristics. Land refers to natural resources and is fixed in supply. Labor is any human physical or mental work and its supply can increase. Capital consists of man-made goods used for further production. Enterprise involves risk-taking, decision-making and innovation in business. The factors of production combine and their cooperation results in income.
The basic factors to be considered while starting your business pgp vivaPROF. PUTTU GURU PRASAD
Line of business, layout, location, plant, and building, capital, a form of business organization, tax planning, tax management, investment, returns, expenses, GST
Presentation by Diego Useche, Associated Professor at the University of Rennes 1 (France), at the FogGuru training Business Modeling and Development in November 2019.
This document outlines the scheme of work for an economics class in their second term of study. It lists 11 topics that will be covered over the term, including capital as a factor of production, division of labour, scale of production, business organizations, population, and labour markets. For each topic, it provides a brief description of the content that will be covered, such as definitions, characteristics, advantages and disadvantages. It also lists some reference books and provides sample evaluation questions.
This document provides background information on industry and environmental analysis for identifying business opportunities. It discusses industry analysis as a tool used by businesses to understand competitive dynamics. A SWOT analysis is introduced as a framework to assess internal and external factors that may impact a business's performance. Key areas of industry analysis are also outlined, including competitors, customers, suppliers, and substitutes. Environmental analysis examines external influences on a business such as economic, political, cultural, and competitive factors.
This document discusses the nature and purpose of business. It defines business as economic activities involving the purchase, production and/or sale of goods and services with the motive of earning profit by satisfying human needs. The key characteristics of business are that it is an economic activity, involves production or procurement of goods and services, involves the sale or exchange of goods and services on a regular basis, and aims to earn a profit. The document also differentiates between business, profession and employment. It then discusses the objectives, risks and classification of business activities.
Production requires combining factors of production - land, labor, capital and entrepreneurship. A short-run production function uses existing capital and labor, while a long-run function allows installing new capital. Labor refers to human effort in production and is determined by population, participation rates, and efficiency. Capital consists of man-made wealth yielding income and plays a vital role in modern production. Entrepreneurship involves starting businesses, identifying opportunities, and organizing resources to produce goods and services for profit. Together these factors of production are essential for economic growth.
Capital expenditures, or CapEx, refer to funds used by a company to acquire or upgrade physical assets such as property, buildings, equipment, and technology that are used in the company's operations. Some examples of CapEx include purchasing land, buildings, machinery, vehicles, software, and intangible assets. Making wise CapEx decisions is important for a company's short-term and long-term financial health. There are two main types of CapEx - those for maintaining current operations and those that enable future growth. Capital expenditures are significant financial commitments that are difficult to reverse and have long-term effects on a company's production and activities.
The document discusses key concepts related to business management and economics, including:
1) Production refers to the process of transforming inputs into goods and services. The main factors of production are land, labor, capital, and entrepreneurship.
2) A production function expresses the relationship between inputs (e.g. labor and capital) and outputs. There are short-run and long-run production functions.
3) The law of demand states that, all else being equal, as price increases, quantity demanded decreases, and vice versa. Elasticity measures the responsiveness of quantity demanded to a change in a determinant like price.
Principles of Management Chapter 1 Business in GeneralDr. John V. Padua
The document provides an overview of business concepts including:
- What is business and its relationship to the economy. Business produces goods and services to meet consumer needs in exchange for profit.
- The key factors of production are land, labor, capital and entrepreneurship. Business uses these factors to produce goods and services for the economy.
- There are different types of businesses including industries, commerce and services. Different economic systems like capitalism and socialism are also discussed.
- Factors like profit motivation, prestige, and fulfilling needs drive people to engage in business. Feasibility studies evaluate the viability of business ventures.
Entrepreneurship second assignment, M.Com, CommerceDanish Saqi
1. Explain the Procedures of launching new Product.
2. Explain financial planning Balance sheet, Income statement and Cash Flow Statement?
3. Explain the Barriers to creativity.
4. Explain the Techniques to improve creativity.
5. Explain the Components of Business Plans.
6. Explain the difference between Managerial VS Entrepreneurial Decision makings.
7. Explain the Michael Porter’s Five Forces Model.
8. Explain the Women entrepreneurship.
9. Describe Business Model? Identify Four Major Component of Business Model?
10. Role of Entrepreneur in Economic Development and also explain Social Responsibility and Ethics.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
The documents discuss various factors that affect entrepreneurial growth and business opportunities. Some key factors include the economic, social, cultural, psychological, technological, and political environments. A proper feasibility analysis should consider the economic, technical, financial, and market viability of a potential business opportunity or idea. Location selection is also important and involves analyzing demographic trends, competition, traffic patterns, and costs associated with different site options. The objective is to select a location that minimizes costs while allowing for smooth business operations and access to resources and customers.
small business & epreneurship development U2.pdfkittustudy7
The document discusses entrepreneurial environment and the entrepreneurial development process. It defines entrepreneurial environment as a place that emphasizes identifying and pursuing opportunities while accepting calculated risks. It notes that entrepreneurial environment includes factors like government policies, access to financing, and the legal system.
The entrepreneurial development process is summarized as having five phases: idea generation, opportunity evaluation, planning, company formation/launch, and growth. Opportunity evaluation involves determining if an opportunity is worth investing in. Planning creates a business strategy and operating plan. Company formation makes the venture a legal entity.
This document discusses entrepreneurship and entrepreneurship development. It defines an entrepreneur as someone who innovates, takes risks, and exploits opportunities to start new businesses. Entrepreneurship involves perceiving opportunities, organizing resources, and handling uncertainty to establish new enterprises. The key functions of an entrepreneur are raising capital, hiring staff, obtaining supplies, and managing the business. Entrepreneurship development programs aim to cultivate entrepreneurial skills and provide support like financing, workspaces, and technical training to promote self-employment and business creation. Factors that encourage entrepreneurship include financial assistance, infrastructure, market demand, collaboration opportunities, and government support policies.
This document provides an overview of a project report on establishing a small-scale steel almirah manufacturing unit. It acknowledges those who helped with the project and provides a table of contents that outlines chapters on entrepreneurship, financial requirements, marketing, product details, manufacturing process, cost estimation, and break-even analysis. The introduction chapter defines small-scale industries in India and their importance for employment and economic growth. It also outlines the government's strategy and support for small businesses.
theory of production ( EEM PPT / SEM 4 GTU )tejaspatel1997
The document provides information about the theory of production and the factors of production.
It begins with an introduction to the theory of production, defining it as the process of converting inputs into outputs. It then discusses the production function and how it represents the relationship between inputs and outputs.
The main body of the document is dedicated to explaining the four factors of production: land, labor, capital, and entrepreneurship. It provides examples and definitions for each factor.
The document concludes by discussing some concepts that influence entrepreneurial decision making, such as scarcity, opportunity cost, and productivity. It emphasizes how entrepreneurs must use resources efficiently to maximize profits.
The document defines an entrepreneur and discusses their essential characteristics and functions. It states that an entrepreneur is an innovator who exploits opportunities through risk-taking and the conversion of resources. The key characteristics of an entrepreneur are listed. It then discusses the five main functions of an entrepreneur: risk-bearing, organizational, innovative, managerial, and decision-making. Finally, it defines entrepreneurship and elaborates on its vital role in developing economies through employment generation, increasing national income, balanced regional development, dispersing economic power, and improving standards of living.
This document provides an overview of key concepts for organizing and planning a business. It discusses stakeholders like owners, employees, customers, and suppliers. It outlines important business functions such as management, marketing, finance, and accounting. It also explains how business decisions can impact earnings and provides examples of common decisions. Finally, it stresses the importance of developing a business plan and considering factors like competition, customers, and expenses.
The document discusses the key factors of production - land, labor, capital and enterprise. It defines each factor and provides classifications and characteristics. Land refers to natural resources and is fixed in supply. Labor is any human physical or mental work and its supply can increase. Capital consists of man-made goods used for further production. Enterprise involves risk-taking, decision-making and innovation in business. The factors of production combine and their cooperation results in income.
The basic factors to be considered while starting your business pgp vivaPROF. PUTTU GURU PRASAD
Line of business, layout, location, plant, and building, capital, a form of business organization, tax planning, tax management, investment, returns, expenses, GST
Presentation by Diego Useche, Associated Professor at the University of Rennes 1 (France), at the FogGuru training Business Modeling and Development in November 2019.
This document outlines the scheme of work for an economics class in their second term of study. It lists 11 topics that will be covered over the term, including capital as a factor of production, division of labour, scale of production, business organizations, population, and labour markets. For each topic, it provides a brief description of the content that will be covered, such as definitions, characteristics, advantages and disadvantages. It also lists some reference books and provides sample evaluation questions.
This document provides background information on industry and environmental analysis for identifying business opportunities. It discusses industry analysis as a tool used by businesses to understand competitive dynamics. A SWOT analysis is introduced as a framework to assess internal and external factors that may impact a business's performance. Key areas of industry analysis are also outlined, including competitors, customers, suppliers, and substitutes. Environmental analysis examines external influences on a business such as economic, political, cultural, and competitive factors.
This document discusses the nature and purpose of business. It defines business as economic activities involving the purchase, production and/or sale of goods and services with the motive of earning profit by satisfying human needs. The key characteristics of business are that it is an economic activity, involves production or procurement of goods and services, involves the sale or exchange of goods and services on a regular basis, and aims to earn a profit. The document also differentiates between business, profession and employment. It then discusses the objectives, risks and classification of business activities.
Production requires combining factors of production - land, labor, capital and entrepreneurship. A short-run production function uses existing capital and labor, while a long-run function allows installing new capital. Labor refers to human effort in production and is determined by population, participation rates, and efficiency. Capital consists of man-made wealth yielding income and plays a vital role in modern production. Entrepreneurship involves starting businesses, identifying opportunities, and organizing resources to produce goods and services for profit. Together these factors of production are essential for economic growth.
Capital expenditures, or CapEx, refer to funds used by a company to acquire or upgrade physical assets such as property, buildings, equipment, and technology that are used in the company's operations. Some examples of CapEx include purchasing land, buildings, machinery, vehicles, software, and intangible assets. Making wise CapEx decisions is important for a company's short-term and long-term financial health. There are two main types of CapEx - those for maintaining current operations and those that enable future growth. Capital expenditures are significant financial commitments that are difficult to reverse and have long-term effects on a company's production and activities.
The document discusses key concepts related to business management and economics, including:
1) Production refers to the process of transforming inputs into goods and services. The main factors of production are land, labor, capital, and entrepreneurship.
2) A production function expresses the relationship between inputs (e.g. labor and capital) and outputs. There are short-run and long-run production functions.
3) The law of demand states that, all else being equal, as price increases, quantity demanded decreases, and vice versa. Elasticity measures the responsiveness of quantity demanded to a change in a determinant like price.
Principles of Management Chapter 1 Business in GeneralDr. John V. Padua
The document provides an overview of business concepts including:
- What is business and its relationship to the economy. Business produces goods and services to meet consumer needs in exchange for profit.
- The key factors of production are land, labor, capital and entrepreneurship. Business uses these factors to produce goods and services for the economy.
- There are different types of businesses including industries, commerce and services. Different economic systems like capitalism and socialism are also discussed.
- Factors like profit motivation, prestige, and fulfilling needs drive people to engage in business. Feasibility studies evaluate the viability of business ventures.
Entrepreneurship second assignment, M.Com, CommerceDanish Saqi
1. Explain the Procedures of launching new Product.
2. Explain financial planning Balance sheet, Income statement and Cash Flow Statement?
3. Explain the Barriers to creativity.
4. Explain the Techniques to improve creativity.
5. Explain the Components of Business Plans.
6. Explain the difference between Managerial VS Entrepreneurial Decision makings.
7. Explain the Michael Porter’s Five Forces Model.
8. Explain the Women entrepreneurship.
9. Describe Business Model? Identify Four Major Component of Business Model?
10. Role of Entrepreneur in Economic Development and also explain Social Responsibility and Ethics.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Understanding how timely GST payments influence a lender's decision to approve loans, this topic explores the correlation between GST compliance and creditworthiness. It highlights how consistent GST payments can enhance a business's financial credibility, potentially leading to higher chances of loan approval.
5 Tips for Creating Standard Financial ReportsEasyReports
Well-crafted financial reports serve as vital tools for decision-making and transparency within an organization. By following the undermentioned tips, you can create standardized financial reports that effectively communicate your company's financial health and performance to stakeholders.
Economic Risk Factor Update: June 2024 [SlideShare]Commonwealth
May’s reports showed signs of continued economic growth, said Sam Millette, director, fixed income, in his latest Economic Risk Factor Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
[4:55 p.m.] Bryan Oates
OJPs are becoming a critical resource for policy-makers and researchers who study the labour market. LMIC continues to work with Vicinity Jobs’ data on OJPs, which can be explored in our Canadian Job Trends Dashboard. Valuable insights have been gained through our analysis of OJP data, including LMIC research lead
Suzanne Spiteri’s recent report on improving the quality and accessibility of job postings to reduce employment barriers for neurodivergent people.
Decoding job postings: Improving accessibility for neurodivergent job seekers
Improving the quality and accessibility of job postings is one way to reduce employment barriers for neurodivergent people.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
Applying the Global Internal Audit Standards_AIS.pdf
Theory of Production
1.
2. CA Foundation 2
Production is the organized activity of transforming resources into
finished products in the form of goods and services; and the
objective of production is to satisfy the demand of such transformed
resources.
Unit 1: Theory of Production
Inputs
(Raw
Materials,
Machines,
Labour, etc.)
Process
(Manual or
Mechanical
or Chemical
Operations)
Output
(Finished
Goods &
Services)
3. CA Foundation 3
Unit 1: Theory of Production
Production consists of various processes to add utility to natural resources for
gaining greater satisfaction from them by:
(i)Changing the form of natural resources. e.g., changing the form of a log of wood
into a table or changing the form of iron into a machine. This may be called conferring
utility of form.
(ii)Changing the place of the resources from a place where they are of little or
no use to another place where they are of greater use. This utility of place can be
obtained by:
(a) Extraction from earth e.g., removal of coal, minerals, gold and other metal ores
from mines and supplying them to markets.
(b)Transferring goods from where they give little or no satisfaction, to places
where their utility is more, e.g., tin in Malaya is of little use until it is brought to the
industrialized centers where necessary machinery and technology are available to
produce metal boxes for packing.
(iii)Making available materials at times when they are not normally available e.g.,
harvested food grains are stored for use till next harvest.
(iv)Making use of personal skills in the form of services, e.g., those of organizers,
merchants, transport workers etc.
5. CA Foundation 5
Unit 1: Theory of Production
It does not mean soil or earth’s surface alone, but refers to all
free gifts of nature which would include besides land in common
parlance, natural resources, fertility of soil, water, air, light, heat
natural vegetation etc. .
1. Land is a free gift of nature.
2. Supply of land is fixed.
3. Land is permanent and has indestructible powers
4. Land is a passive factor.
5. Land is immobile
6. Land has multiple uses
7. Land is heterogeneous
6. CA Foundation 6
Unit 1: Theory of Production
Any mental or physical exertion directed to produce goods or
services. All human efforts of body or of mind undergone partly or
wholly with a view to secure an income apart from the pleasure
derived directly from the work is termed as labour.
1. Human Effort.
2. Labour is perishable.
3. Labour is an active factor.
4. Labour is inseparable from the labourer.
5. Labour power differs from labourer to labourer.
6. All labour may not be productive.
7. Labour has poor bargaining power.
8. Labour is mobile.
9. There is no rapid adjustment of supply of labour to the demand for it.
10. Choice between hours of labour and hours of leisure.
7. CA Foundation 7
Unit 1: Theory of Production
Capital has been rightly defined as ‘produced means of production’ or
‘man-made instruments of production’. In other words, capital refers to
all man made goods that are used for further production of wealth.
Types of
Capital
Fixed
Capital
Renders a
series of
services over
a period of
time
Circulating
Capital
Single use
and is not
available for
further use
Real Capital
Physical
goods
Human
Capital
Human Skill
& Ability
Tangible
Capital
Can be
perceived
by senses
Individual
Capital
Personal
property
owned by
an
individual
Social
Capital
Belongs to
Society as a
Whole
8. CA Foundation 8
Unit 1: Theory of Production
Capital formation involves production of more capital goods like, machines, tools,
factories, transport equipments, electricity etc. which are used for further production of
goods. Capital formation is also known as investment.
Savings
Mobilisation
of Savings
Investment
Mobilisation
9. CA Foundation 9
Unit 1: Theory of Production
Factor which mobilises all the factors (land, labour & capital), combines
them in the right proportion, initiates the process of production and
bears the risks involved in it. This factor is known as the entrepreneur. He
has also been called the organiser, the manager or the risk taker.
10. CA Foundation 10
Unit 1: Theory of Production
Initiating business enterprise and resource co-ordination:
The first and the foremost function of an entrepreneur is to initiate a
business enterprise. An entrepreneur senses business opportunities,
perceives opportunity, organizes resources needed for exploiting that
opportunity and exploits it.
Risk bearing or uncertainty bearing:
What is planned and anticipated by the entrepreneur may not come true
and the actual course of events may differ from what was anticipated and
planned. Risk bearing cannot be delegated to anyone. Therefore, risk
bearing is the most important function of an entrepreneur
Innovations:
Innovation refers to commercial application of a new idea or invention to
better fulfillment of business requirements. The greater the innovating
ability, the greater the supply of entrepreneurs in the economy, and greater
will be the rate of technological progress.
11. CA Foundation 11
Unit 1: Theory of Production
1. Organic Objectives
• An enterprise can survive only if it is able to produce and distribute products or
services at a price which enables it to recover its costs.
• Once the enterprise is assured of its survival, it will aim at growth and expansion.
• The managers do not aim at optimising profits; rather they aim at optimisation of the
balanced rate of growth of the firm which involves optimisation of the rate of
increase of demand for the commodities of the firm and the rate of increase of
capital supply.
2. Economic Objectives
• The firm determines the price and output policy in such a way as to maximize
profits within the constraints imposed upon it such as technology, finance etc.
• The investors expect that their company will earn sufficient profits in order to
ensure fair dividends to them and to improve the prices of their stocks.
• Not only investors but creditors and employees are also interested in a profitable
enterprise. Creditors will be reluctant to lend money to an enterprise which is not
making profits.
12. CA Foundation 12
Unit 1: Theory of Production
3. Social Objectives
• To maintain a continuous and sufficient supply of unadulterated goods and
articles of standard quality.
• To avoid profiteering and anti-social practices.
• To create opportunities for gainful employment for the people in the society.
• To ensure that the enterprise’s output does not cause any type of pollution - air,
water or noise.
• An enterprise should consistently endeavour to contribute to the quality of life of
its community in particular and the society in general. If it fails to do so, it may not
survive for long.
4. Human Objectives
• To provide fair deal to the employees at different levels.
• To develop new skills and abilities and provide a work climate in which they will
grow as mature and productive individuals.
• To provide the employees an opportunity to participate in decision-making in
matters affecting them.
• To make the job contents interesting and challenging.
• If the enterprise is conscious of its duties towards its employees, it will be able to
secure their loyalty and support.
13. CA Foundation 13
Unit 1: Theory of Production
5. National Objectives
• To remove inequality of opportunities and provide fair opportunity to all to work and
to progress.
• To produce according to national priorities.
• To help the country become self-reliant and avoid dependence on other nations.
• To train young men as apprentices and thus contribute in skill formation for
economic growth and development.
14. CA Foundation 14
Unit 1: Theory of Production
1. Due to lack of accurate information, many variables that affect the performance of the
firm cannot be correctly predicted for the current month or the current year, let alone
for the future years.
2. Restrictions imposed in the public interest by the state on the production, price and
movement of factors.
3. Infrastructural inadequacies and consequent supply chain bottlenecks resulting in
shortages and unanticipated emergencies.
4. Changes in business and economic conditions which become contagious due to the
highly connected nature of economies, place constraints by causing demand
fluctuations and instability in firms’ sales and revenues.
5. Events such as inflation, rising interest rates, unfavourable exchange rate fluctuations
cause increased raw material, capital and labour costs and affect the budgets and
financial plans of firms.
15. The problem is that these objectives are multifarious and very often conflict with one
another.
Thus the enterprise faces the problem of not only choosing its objectives but also
striking a balance among them.
Entrepreneur will have to weigh the relevant factors against one another in order to
choose the right location which is most economical.
It goes without saying that the management must make a realistic evaluation of its
strengths and limitations while choosing a particular size for a new unit.
A firm has to make decision on the nature of production process to be employed and
the type of equipments to be installed.
Financial planning involves: determination of funds required, assessment of demand
and cost of its products, estimation of profits on investment and comparison with the
profits of comparable existing concerns and determining capital structure and the
appropriate time for financing the enterprise etc.
CA Foundation 15
Unit 1: Theory of Production
16. It has to divide the total work of the enterprise into major specialised functions and
then constitute proper departments for each of its specialized functions.
Proper marketing of its products and services is essential for the survival and growth
of an enterprise.
A number of legal formalities have to be carried out during the time of launching of the
enterprise as well as during its life time and its closure.
The management has to devise special measures to win the co-operation of a large
number of workers employed in industry.
Misunderstanding and conflict of interests have assumed enormous dimensions that
these cannot be easily and promptly dealt with.
CA Foundation 16
Unit 1: Theory of Production
17. CA Foundation 17
Unit 1: Theory of Production
The relationship between the maximum amount of output that can be
produced and the input required to make that output. It is defined for a
given state of technology i.e., the maximum amount of output that can be
produced with given quantities of inputs under a given state of technical
knowledge.
19. CA Foundation 19
Unit 1: Theory of Production
The Cobb-Douglas functional form of production functions is widely used to
represent the relationship of an output and two inputs.
Cobb-Douglas production function is stated as:
Q = KLa C(1-a)
where ‘Q’ is output, ‘L’ the quantity of labour and ‘C’ the quantity of capital.
‘K’ and ‘a’ are positive constants.
The conclusion drawn from this famous statistical study is that labour
contributed about 3/4th and capital about 1/4th of the increase in the
manufacturing production.
20. CA Foundation 20
Unit 1: Theory of Production
Total product is the total output resulting from the efforts of all the factors of
production combined together at any time.
Average product is the total product per unit of the variable factor.
AP = Total Product
No of Units of Variable Factors
Marginal product is the change in total product per unit change in the
quantity of variable factor. In other words, it is the addition made to the total
production by an additional unit of input. Symbolically,
MP n = TP n – TP n-1
21. CA Foundation 21
Unit 1: Theory of Production
When MP is increasing, TP will increaseat an
increasing rate. (stage 1)
When MP is decreasing, TP will increase at a
decreasing rate. (stage 2)
When MP is zero, TP is at its maximum.
When MP is negative, TP declines. (stage 3)
When MP is above AP,AP isincreasing
When MP is below AP,AP isdecreasing
When MP equals to AP,AP is atmaximum.
22. CA Foundation 22
Unit 1: Theory of Production
The law states that as we increase the quantity of one input which is
combined with other fixed inputs, the marginal physical productivity of the
variable input must eventually decline.
In other words, an increase in some inputs relative to other fixed
inputs will, in a given state of technology, cause output to increase; but
after a point, the extra output resulting from the same addition of extra
input will become less and less.
23. CA Foundation 23
Unit 1: Theory of Production
Stage 1: The Stage of Increasing Returns:
Total product increases at an increasing rate upto a point (in figure upto point F), marginal
product also rises and is maximum at the point corresponding to the point of inflexion and
average product goes on rising. From point F onwards during the stage one, the total product
goes on rising but at a diminishing rate. Marginal product falls but is positive. The stage 1 ends
where the AP curve reaches its highest point.
24. CA Foundation 24
Unit 1: Theory of Production
Stage 2: The Stage of Diminishing Returns:
Total product continues to increase at a diminishing rate until it reaches its maximum at point
H, where the second stage ends. In this stage, both marginal product and average product of
the variable factor are diminishing but are positive. At the end of this stage i.e., at point M
(corresponding to the highest point H of the total product curve), the marginal product of the
variable factor is zero. Stage 2, is known as the stage of diminishing returns because both the
average and marginal products of the variable factors continuously fall during this stage. This
stage is very important because the firm will seek to produce within its range.
25. CA Foundation 25
Unit 1: Theory of Production
Stage 3: The Stage of Negative Returns:
Total product declines, MP is negative, average product is diminishing. This stage is called
the stage of negative returns since the marginal product of the variable factor is negative during
this stage.
26. CA Foundation 26
Unit 1: Theory of Production
In the long run, all the factors of production are variable. No factor is
fixed. The law studies about : changes in output when all factors of
production in a particular production function are increased together (i.e.
behaviour of output in response to a change in the scale).
A change in scale means that all factors of production are increased
or decreased in the same proportion. The study of changes in output
as a consequence of changes in scale forms the subject matter of returns
to scale
27. CA Foundation 27
Unit 1: Theory of Production
If the increase in all factors leads to more than proportionate increase in output, returns to scale
are said to be increasing. Thus, if all factors are doubled and output increases more than double, then
the returns to scale are said to be increasing.
• In figure 8, OX axis represents increase in labour and capital while OY axis shows increase in
output. When labour and capital increases from Q to Q1, output also increases from P to P1 which
is higher than the factors of production i.e. labour and capital.
28. CA Foundation 28
Unit 1: Theory of Production
If the increase in all factors leads to less than proportionate increase in output, returns to scale
are decreasing.
• In this diagram 9, on OX axis, labour and capital are given while on OY axis, output. When factors
of production increase from Q to Q1 (more quantity) but as a result increase in output, i.e. P to P1 is
less. We see that increase in factors of production is more and increase in production is
comparatively less, thus diminishing returns to scale apply.
29. CA Foundation 29
Unit 1: Theory of Production
If we increase all factors i.e., scale in a given proportion and output increases in the same
proportion, returns to scale are said to be constant. Thus, if doubling or trebling of all factors causes
a doubling or trebling of output, then returns to scale are constant.
• In figure 10, OX axis represents increase in labour and capital while OY axis shows increase in
output. When labour and capital increases from Q to Q1, output also increases from P to P1 which
is equal to increase in factors of production i.e. labour and capital.
30. CA Foundation 30
Unit 1: Theory of Production
A profit maximising firm is interested to know what combination of factors of
production (or inputs) would minimise its cost of production for a given output. This
can be known by combining the firm’s production and cost functions, namely isoquants
and isocost lines respectively.
An isoquant represents all those combinations of inputs which are capable of
producing the same level of output. Since an isoquant curve represents all those
combination of inputs which yield an equal quantity of output, the producer is indifferent
as to which combination he chooses. Therefore, Isoquants are also called equal product
curves, production indifference curves or isoproduct curves.
31. CA Foundation 31
Unit 1: Theory of Production
Isocost line, also known as budget line or the budget constraint line, shows the various
alternative combinations of two factors which the firm can buy with given outlay.
Whatever be the combination of factors the firm chooses, the total cost to the firm
remains the same. In other words, all points on a budget line would cost the firm the
same amount.
33. CA Foundation 33
Unit 1: Theory of Production
The tangency point of the given isoquant with an isocost line represents the least cost
combination of factors for producing a given output.