bbi2o_functions_of_business_production

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=Production=

__What you need to remember__: Factors of Production Production Process Improving Productivity
 * Natural resources
 * Raw materials
 * Labour
 * Capital
 * Information
 * Management
 * Purchasing
 * Processing
 * QC
 * Grading
 * Training
 * Capital investment
 * Technology investment
 * Inventory management (RFID)

Factors of Production
Any good or service must first be made from raw labour/resources

whitewater

Natural Resources
Also known as the //primary industries//, they are made up of six types of natural resources:
 * 1) fuel/energy
 * 2) [|logging/forestry]
 * 3) [|fishing/trapping]
 * 4) agriculture
 * 5) mining ([|Prehistoric refining], modern refining (see below)
 * 6) water

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They are often converted into the raw materials that make most other products. E.g. Mining->Iron Ore->Steel->Car parts (or electronics or ...)



Raw materials
Are the goods used in the manufacture of other goods. Only fishing and some agriculture **natural resources** make it directly to the consumer, the rest are largely **refined** into a **raw material**. E.g. corn is a natural resource that is refined into the raw-material cornmeal which is then used in the manufacture of various food products.

Labour
Is the physical or mental work used to produce a good or service. Since the advent of unions the cost of labour is very expensive (usually THE most expensive) part of production. In cost-cutting measures, labour is usually the first thing targeted. There are usually a few different ways in which labour costs are cut. 1) Outsourcing (buying the parts from another company) or 2) Offshoring (moving part of the production of some, or all of the company to a country where labour is cheaper), 3) Consolidation (centralizing aspects of production)

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__Examples__:
 * GM using various tire manufacturers for tires for their vehicles, rather than make them themselves (as opposed to Henry Ford who insisted in making all components of his machines - Robertson screw)
 * With NAFTA offshoring production to Mexico was commonplace as there were no tariffs for goods/services to and from there.
 * Consolidation of baking to a central plant in Brantford, ON make Tim Horton's baked products far more profitable.

Capital
Is the money invested into a business. It can be
 * 1) liquid: cash, investment, receivables [assets to the company because it expects to see return soon], or
 * 2) non-liquid: buildings, machinery, ideas (IP), talent etc...

Information
Is a product like most others that can be sold. For example, consultants and researchers are key in making good business decisions. They're also a tool to be used, for example, lawyers, accountants and other skilled professionals can make money for a company though the use of information. Information leads to better production.

Management
Are people who make decisions on factors of production. Most often, they decide things like where to buy, and at what cost, who to hire, who to partner with to gain a competitive edge. Management oversees all elements of production to ensure the company is profitable.

__Activity__:

With a partner, select 2 products you brought with you today. Do NOT select a simple product (e.g. an apple), or a complicated product (cell phone). On a blank piece of paper, with your partner, brainstorm how the 6 factors of production influence the products you chose. Be as reasonably complete as you can. Once you're done, join another group of 2 and share your ideas. In the ADD column include all inputs to factors of production that they help with. Turn in your sheet of paper to me by the end of class.

Additionally answer the following questions:
 * Factors of Production || Product #1 || ADD || Product #2 || ADD ||
 * 1. ||  ||   ||   ||   ||
 * 2. ||  ||   ||   ||   ||
 * 3. ||  ||   ||   ||   ||
 * 4. ||  ||   ||   ||   ||
 * 5. ||  ||   ||   ||   ||
 * 6. ||  ||   ||   ||   ||
 * 1) Which capital goods were similar between Product #1 and Product #2?
 * 2) Do managers have to balance CSR principles versus the need to make money? Are the two necessarily mutually exclusive?

Production Process
An overview of the production process is that you must make choices along the way from start to finish in the generation of a product. If you are making a 'Mac'n Cheese" product, what type and grade of flour, what kind of cheese, from whom do you buy these ingredients, do you make the product semi-cooked, uncooked, or completely cooked before you ship it? How do you test to ensure the product is market-ready so that your customers don't get food poisoning? These are all part of the production process

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[|BBI2O - Production Process - Blank]


 * //*special thanks to R. Edmondson for use of various course materials from the YRDSB//**