PRODUCTION
Meaning of Production
Production is the process of creating goods and services to satisfy human wants. It involves adding utility (usefulness) to raw materials by changing their form, making them available in the right place, at the right time, and for the right person.
Types of Production
Production is divided into Industry, Commerce, and Services:
- Industry: Industry is the process of extracting raw materials or changing them into finished goods.
- Extractive Industry – taking raw materials from nature.
- Examples: farming, fishing, mining, oil drilling.
- Manufacturing Industry – converting raw materials into finished goods.
- Examples: textile production, food processing, furniture making.
- Constructive Industry – building structures using raw materials.
- Examples: road construction, building houses, bridges.
- Commerce : Commerce involves all activities that support the distribution of goods and services.
- Trade – buying and selling of goods and services.
- Types: Wholesale and Retail trade.
- Aids to Trade – services that make trade easier.
- Examples: Transport, Banking, Insurance, Advertising, Warehousing.
- Services: Services are activities performed to satisfy human wants.
- Examples: Teaching, Nursing, Hairdressing, Catering, Driving, Tailoring.
Forms of Utility in Production
- Form Utility: Changing raw materials into finished goods.
- Place Utility: Making goods available where needed.
- Time Utility: Making goods available when needed.
- Possession Utility: Transfer of ownership through sale or trade.
Levels of Production
- Primary Production: Extracting raw materials (farming, mining).
- Secondary Production: Processing and manufacturing into goods.
- Tertiary Production: Services supporting production and trade (banking, transport).
Importance of Production
- Provides goods and services.
- Creates employment.
- Improves standard of living.
- Promotes national development.
- Encourages specialization and division of labour.
- Generates government revenue.
Problems of Production in Nigeria
- Inadequate power supply.
- Poor infrastructure (roads, transport).
- Lack of capital and finance.
- Corruption and poor policies.
- Shortage of skilled labour.
- Dependence on imported raw materials.
Relationship between Production, Distribution, and Consumption
- Production: Creating goods and services.
- Distribution: Making goods available to consumers.
- Consumption: Using goods/services to satisfy wants.
- Diagram idea: Production → Distribution → Consumption → Production
Modern Trends in Production
- Use of technology and machines (automation, robotics).
- Globalization (goods produced in one country and consumed in another).
- Green production (eco-friendly methods).
- Outsourcing (using external producers for goods/services).
Effects of Production
Positive Effects:
- Makes goods and services available.
- Provides jobs and employment.
- Improves standard of living.
- Encourages development of society.
- Provides skills for workers.
Negative Effects:
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- Pollution (air, land, water, noise).
- Waste disposal problems.
- Deforestation and soil degradation.
- Overuse/depletion of natural resources.
Factors of Production
- Land – all natural resources used in production (soil, water, forests, minerals). Reward: Rent.
- Labour – human effort (physical and mental). Reward: Wages/Salary.
- Capital – man-made resources used to produce goods/services (tools, machines, buildings). Reward: Interest.
- Entrepreneurship – person who organizes and manages production and takes risks. Reward: Profit.
Evaluation Questions
- Define production.
- Explain the three types of industry with examples.
- What are trade and aids to trade? Give examples.
- Mention three forms of utility in production.
- List three positive and two negative effects of production.
- Explain the four factors of production and their rewards.
- State two modern trends in production.
- Describe the relationship between production, distribution, and consumption.
- List three problems of production in Nigeria.
