Production is the Activity of Producing Goods and Services, Know the Types - Factors that Affect It

Kapanlagi.com - Humans have needs that must be fulfilled. These needs can be in the form of goods or services. In addition to nature, some of the goods needed by humans are the result of production activities. Yes, production is the process of creating goods or services. Meanwhile, the person who carries out production activities is called a producer.

Some people engage in production activities to meet their own needs. However, some also choose to buy goods produced by a factory or company that are sold in the market. In producing goods or services, there are several things that need to be considered. Because production is a complex activity.

Therefore, factors, objectives, and processes in production activities must be carefully considered. So, to understand it better, here is an explanation of production as the activity of creating goods or services, summarized from various sources.

1. Understanding Production

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As mentioned earlier, production is a series of activities aimed at creating or producing a good or service. However, production is not only aimed at producing completely new goods. Production activities can also be carried out to increase the value of an existing good.

Production activities can be carried out on a small scale for personal needs, but they can also be done on a large scale such as in industries. However, in general, production is known as activities to produce goods or services that have economic value. Some examples of products resulting from production include agricultural products, livestock, fisheries, crafts, and so on.

2. Production Objectives

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Production activities are carried out with specific objectives, not just to produce goods or services. The objectives of production activities are as follows.

1. Producing goods and services
Producing goods and services can be a fundamental objective of a production activity. Through production activities, goods and services needed by consumers can be available and fulfilled.

2. Meeting Needs
In addition to meeting consumers' needs for goods and services, production activities can also aim to meet personal needs, especially basic needs.

3. Increasing Profit
Production activities can be carried out to increase the selling value of a product. This means that these activities can also be done with the aim of obtaining more profit.

4. Expanding Business Opportunities
Production activities can also be carried out to expand business opportunities. When the produced goods are in high demand, the production quantity increases. This means that producers can expand their business wider.

5. Achieving Prosperity
In the long run, production activities can also be carried out with the aim of achieving prosperity. As mentioned earlier, production activities can be used to increase profit and expand business opportunities. When both of these objectives are achieved, the society will also become more prosperous.

3. Types of Production

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It turns out that production activities can be divided into several types. The types of production activities are as follows.

1. Industrial Production
Industrial production is large-scale production activity. The purpose of this production is to process raw materials into semi-finished or finished goods to be sold to consumers.

2. Service Production
Service production is a production activity aimed at offering or selling expertise services to consumers.

3. Agrarian Production
Agrarian production is a production activity that utilizes natural resources. The products of agrarian production are obtained through agricultural processes and are intended for the general public.

4. Extractive Production
Extractive production is a production activity that extracts raw materials from nature and sells them to other companies to be processed into new products.

5. Trade Production
Trade production is a production activity that acts as a link between producers and consumers.

6. Transportation Production
Transportation production is a production activity aimed at serving the distribution or delivery of goods from producers to consumers or agents close to consumers.

4. Sources of Production

To carry out production activities, sources of production are certainly needed. These sources can be obtained from various things, including the following.

1. Natural Resources
Natural resources are one of the largest sources of production. However, it is important to note that there are renewable and non-renewable natural resources. Therefore, it is important to pay attention to the amount of resources used. Excessive production can damage or even deplete existing natural resources.

2. Human Resources
Human resources are generally used in service production. Humans with various skills become resources that can enhance the utility or value of goods and services. Not only goods, in terms of services, humans can also enhance the value or quality of other humans.

3. Expert Resources
Expert resources focus more on the skills possessed by humans. These skills then enhance the value and quantity of a production. In fact, skills play an important role in the production process.

4. Capital Resources
Capital resources are actually classified as the result of production. However, on the other hand, capital is also used to produce other production goods. Capital resources are sourced directly from producers.

5. Factors of Production

(credit: freepik)

Success in carrying out production activities is not only determined by production resources. More than that, there are several factors that also influence the success of production activities. These factors are divided into two types, namely primary factors and derived factors.

1. Primary factors of production
Nature and labor are the main factors of production activities. Nature is the largest source of production, almost every natural wealth can be utilized as production materials. Meanwhile, labor also becomes the producer who makes the products.

2. Derived factors of production
Derived factors of production are capital and expertise. Capital is a support in the production of goods, for example the existence of machines. Meanwhile, expertise can also be obtained through training, so it is not a fundamental matter.

That is the review regarding production as the activity of creating goods and services. Hopefully, it is useful and can increase knowledge.

(kpl/psp)