Production
How goods are produced: inputs and outputs
How Goods Are Produced
Production is the process of turning inputs (raw materials, labour, machines) into outputs (finished goods). A bakery uses flour, eggs and ovens (inputs) to produce bread (output). Production adds value — raw materials become more valuable as finished products.
Example
The Production Process
Inputs → Process → Outputs
Example: T-shirt production
Inputs: cotton, dye, thread, machines, workers, electricity
Process: spinning, weaving, cutting, sewing, printing
Output: finished t-shirt ready for sale
Value added: Raw cotton = R5, Finished t-shirt = R150
The manufacturing process added R145 of value!
Note
Remember
Production requires factors of production: land (natural resources), labour (workers), capital (machines, money) and entrepreneurship (management). SA produces many goods: cars (VW, Toyota factories), food products, clothing and mining outputs.
Key Vocabulary
ProductionThe process of making goods from raw materials
InputResources that go into making a product
OutputThe finished product that comes from production
Value addedThe increase in worth during the production process
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Production
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