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3 The Production Process

What are the three types of production?
In general, there are three types of production: mass production, mass customization, and customization. In addition to production type, operations managers also classify production processes in two ways: (1) how inputs are converted into outputs and (2) the timing of the process.
How do I choose the right production process?
Selecting the right production process can often depend on the type of technology you have available. For instance, if you have a large bulk of the same product orders, you may not be able to follow a clear mass production structure if you don't have the proper technology to track, sort or build these products accordingly.
Why is the production function a key concept of production theory?
The production function is the key concept of production theory because it is the link between input usage and an attainable level of output. It formally describes the relation between physical rates of output and physical rates of input usage.
What are the two basic processes for converting inputs into outputs?
There are two basic processes for converting inputs into outputs. In process manufacturing, the basic inputs (natural resources, raw materials) are broken down into one or more outputs (products). For instance, bauxite (the input) is processed to extract aluminum (the output). The assembly process is just the opposite.

Production Process

The business firm is basically a producing unit it is a technical unit in which inputs are converted into output for sale to consumers, other firms and various government departments. Production is a process in which economic resources or inputs (composed of natural resources like land, labour and capital equipment) are combined by entrepreneurs

Production Decision

The theory of production lies at the heart of managerial economics. It forms the foundation for the theory of supply, which, is one of the basic concepts in the determination of prices. Furthermore, production decisions are an important part of managerial decision making. Managers are required to make four different but interrelated production de

The Production Function

The production function is the key concept of production theory because it is the link between input usage and an attainable level of output. It formally describes the relation between physical rates of output and physical rates of input usage. With a given state of technology, the attainable level of output depends largely, but not entirely, upo

Properties Ofproduction Functions

We may now turn to the fundamental issue of the properties of the short run production function and the implications of these properties for practicing managers against this backdrop. See full list on economicsdiscussion.net

Elasticity of Production

The elasticity of production can be defined as the ratio of percentage change in output to the percentage change in the amount of the variable input. It measures the degree of responsiveness of total output to a small change in the variable input. For continuous changes in L and Q, the elasticity of production can be expressed as A close look at

Three Stages of Production and Decision Making

From our discussion so far we have discovered three different stages of the production process in the short-run. Each stage is important from the standpoint of efficient resource utilization (as shown in Fig. 13.4). All the three stages together constitute what is broadly called the Law of Variable Proportions. In stage 1, marginal product exceed

Production with Two Or More Variable Inputs

We may now extend our analysis to cover more than one variable input. The principles developed in this section will continue to apply. We may continue to assume that at least one of the factors of production is fixed in quantity. This implies that we are still dealing with the short run, in which case the law of diminishing returns will apply. Cap

Production in The Long-Run

We will now consider the more general case of production with two or more variable inputs. To make diagrammatic analysis possible we consider only two variable factors. We may assume either that these two factors are the only variable factors or that one of the two factors represents some combination of various other variable factors. See full list on economicsdiscussion.net

Ridge Lines and The Economic Region of Production

We have postulated convexity of isoquants. And it presupposes positive marginal product of L and K. But MP of L may become negative if the application of L is so large relative to quantities of other input(s), say capital, that an increase of labour would result in congestion and inefficiency, in which case MP may turn out to be negative. Then retu

Production of A Given Output at Minimum Cost

Whatever output a firm chooses to produce, the production manager is desirous of producing it at the lowest possible cost. To accomplish this objective, the production process must not only be technically efficient but economically efficient, as well. So the production process has to be organized in the most efficient manner. Suppose that at give

3 The Production Process

What are the three types of production?

How do I choose the right production process?

Why is the production function a key concept of production theory?

What are the two basic processes for converting inputs into outputs?