PRODUCTION

Fig 1

Definitions Of Commerce And Production.

Commerce: Is the distribution of goods and services from the producer to the consumer in order to satisfy human needs and wants.  It may also be defined as trade and aids to trade.
Production: It is the provision of goods and services in order to satisfy human needs and wants.

Key terms of the definitions.

Distribution: Refers  to the movement of goods and services from their point of production.
Goods: This refers to tangible or touchable items for example ballpoints, desks, books, bread, sadza and many more.

Classes Of Goods

• Durable goods:these last for a long time, for example equipment, cars, bicycles and many more.
• Non —durable goods: these have a short life span, for example clothes, food and perishables goods.
• Consumer goods: these are goods ready for use  by  the  consumer and they  get used  or finished during the process of  use, for example ball point pen, bread, clothes  and a rubber.
• Capital goods: these are goods which are used during the production of other goods for example tractors, sewing machine, ploughs and scotch carts. Capital goods are also known as producer goods.

Services

These are intangible or untouchable items for instance health services, teaching, entertainment, hairdressing, insurance, tourism and many more.

HUMAN NEEDS: Foods, Shelter, Health, Aesthetic & Spiritual Well being	GOODS: Fertiliser,Foods, Medicines, Energy, Fiber, Forage, Construction & Craft Material SERVICES: Recreation & Tourism, Erosion Control, Wildlife Habitat, Cultural & Religious Sites, Climate Regulation, Water & Nutrient Cycling

Fig 2

Needs 

• These are basic necessities for human survival and human beings cannot live without them for example food, clothes, shelter, water, education and health services.

 Wants

• These are items for luxury and human beings can live without them for example Television  sets, Radios, Cars and Bicycles.

 Producers

• These are providers or suppliers of goods and services; they are manufacturers who use raw materials to make products.

Consumer

• These are end users of products.

Producer	Consumer
A producer is a person or business that makes goods or provides services	A consumer is a person or business that buys or uses goods or services

FIG 3

Branches Of Commerce

BUSINESS
COMMERCE			INDUSTRY	DIRECT SERVICE
TRADE		AUXILLIARY ACT	1. Construction	1.doctor
Home trade	Foreign trade	1. Transport	2. Manufacturing	2. Engineer
1. Wholesale	1. Import	2. Banking	3. Extraction	3.consultant
2. Retail	2. Export	3.Insurance	4. Genetic	4. Lawyer
	3. Re-export	4. Warehousing		5. Teacher

FIG 4

Trade

• Is the buying and selling of  products
• It is divided into home trade and foreign trade
• Home trade is also known as  internal trade, domestic  trade or local trade and  occurs  between citizens  of the same country
• Domestic trade is further divided  into  wholesale trade and  retail trade
• Foreign trade is also known as international trade, external trade, global trade or overseas trade and it occurs between  citizens of two or more countries
• International trade is further divided into  export trade, import trade and entrepot trade

Aids To Trade

• These are  commercial activities or auxiliary  services  that facilitate trade or help trade to take place smoothly
• Six examples of aids to trade are as follows: communication, transport, warehousing, advertising, insurance and banking.

Aids To Trade
1. Banking
2. Insurance
3. Mercantile agents
4. Transport
5. Communication
6. Advertising and publicity
7. Warehousing
8. Trade promotion
9. Global organisation

FIG 5

Production

• It is the processes and methods used to transform tangible inputs (raw materials and semi-finished goods) and intangible inputs (ideas, information and knowledge) into goods and services.

Stages of production

FIG 6
There are three stages of production:

There is great interdependence amongst these stages of production.

• Primary stage supplies raw materials to secondary stage.
• The secondary stage acts as the market for primary stage products.
•  The secondary stage depends on primary stage for its raw materials.
• The tertiary stage provides services to both primary and secondary stages of production.
• Tertiary stage distributes products from both primary and secondary stages.

Forms of production.

There are two forms or types of production, that is direct production and indirect production.

Direct production

• This is when one produces products for personal use without the help of others, for example subsistence farming, sewing own clothes and constructing a house for self.

Indirect Production

• This is when products are produced for others or for sale and there are extras for sale, for example commercial farming.

Direct production	Indirect production
Is the production of products for personal use or own use No surpluses are produced For example subsistence farming	Is the production of products for sale or for others Surpluses are produced For example commercial farming

Table 1

Advantages of Direct production	Disadvantages of Direct production
Products are produced to own taste It provides personal satisfaction There is full use of resources  There is no payment of wages to workers	Some basic needs are not met  No wide range of goods to choose from  Products produced are of inferior quality Very slow to finish a task The producer cannot develop other skills

Table 2

Advantages of Indirect production	Disadvantages of Indirect production
There is mass production of products  Consumers exercise their right to choose There is production of surpluses  High quality products are made It encourages simplification ,standardization and specialization.	Products produced do not meet personal tastes Some people may find themselves out of employment due to mechanization and automation.

Table 3

Division of labour and specialization

Division of labour:-This is the break-down of work activities into smaller tasks carried out by different individuals.
Specialization: This is whereby workers carry out those activities they are best at or experts in.

Division of labour	Specialisation
Division of labour is when workers perform specific tasks	Specialisation takes place when any of the four factors of production perform specific tasks

Fig 10

Related concepts

Simplification: This is the  process  of  making  processes  and  activities  much  easier  to  carry  out.
Specialization : This is  a  situation  whereby   an  employee  performs  a   task  one  is  talented  at  and  is  an  expert  in.
Standardization: This is the making of uniform or identical products, for example window and door frames.

Mass production:

• This is the production of goods in bulk and services in mass
• It encourages trade
• It  results in automation  or mechanization
• Products are always  there
• Living standards are improved 
• Production costs are low resulting in low prices.

Fig 11

Factors of production

Fig 12

• These are resources used in the production process. They are also known as means or inputs of production.

Factor	Description	Reward
1.  Land	Refers to all natural resources, on the earth, under the seas and in the atmosphere. It is the site on which production occurs. Examples include farming land , seas ,air , forests , lakes and mineral ores	Rent
2.  Labour	This refers to the human effort put in the production .The effort may be physical [body] or mental [mind]	Wages and salaries
3. Capital	This refers to the money or wealth put aside for the production of more wealth , for example equipment , tools ,plants and machinery and money.	Interest
4. Entrepreneurship or Organization or enterprise	This refers to the ability to operate or manage a business	Profit

Table 4