Concept of production

Production is the transformation of inputs into output where inputs are used in many ways such as land, labour, capital, raw material etc. 

Production concept emphasis on low production costs, and high production efficiency and mass production simply said a large amount of the cheapest goods. 

The function of production :

The function of production is the technological relationship between inputs and output in physical terms. An algebraic expression for production is Q = f (K, L)

Where Q = The quantity of output produced per unit time
K = Capital 
L = Labour 

Characteristics of the production system : 

• The production system has its own objective.
• The system transforms the various inputs to the useful output.
• Does not operate in isolation from the other organization system. 
• There exists a procedure which controls and improve system performance. 

Types of production : 

• Continuous production 
• Batch production 
• Mass production 
• Job-shop production 

Definition of production

Production is the method of turning raw materials or inputs into finished goods or products means the creation of something from basic inputs. Production is the process of transformation because it is done to satisfy human wants. The process of transformation is done in the following ways. 

1. Disintegration: One input is used to produce many types of output. 
2. Integration or Assembly: Many inputs are used to produce only one output. 
3. Service: Value of the product is increased by providing services. 

What is production system

The production system of an industrial organization is that part which produces products of an organization. The production system has the following characteristics :

• Production is an organized activity, so every production system has an objective. 
• The system transforms various inputs into useful outputs. 
• It does not operate in isolation from the other organization system.

Classification of production system :

1. Job Shop Production 
2. Batch Production 
3. Mass Production 
4. Continuous Production 

Definition of production management

Production is the process which combines and transforms various resources like raw material used in the production system of the industrial organization into finished product or value-added service in a controlled manner as per the policies of the industrial organization.

The set of interrelated management activities, which are involved in manufacturing certain products is called production management. The same concept is extended to services management is called operations management.

Production management deals with converting raw materials into finished products of goods. It brings men, money, machines, materials, methods and markets to satisfy the wants of the people. 

Productivity measurement

Productivity can be measured by two types which are following below :

• By aggregate basis 
• On an individual basis

which is called total and partial measure. 

Total productivity Index / Measure = Total output / Total input 

It can also be measured by Total production of goods and services / Labour + material + capital + Energy + management 

Labour productivity Index / Measure = Output in unit / Man hours worked 

Machine productivity Index / Measure = Total output / Machine hours worked 

Management productivity Index / Measure = Output / Total cost of management 

Land productivity Index / Measure = Total output / Area of land used 

Partial measure can be measure by :

• Output / Labour  
• Output / Capital 
• Output / Materials 
• Output / Energy

Benefits of productivity

For the survival of any industrial organization productivity ratio must be at least 1. If it is more than 1 the organization is in a comfortable position. The ratio of output produced to the input resources utilized in the production.

Benefits derived from higher productivity are as follows :

• Improve profits because productivity helps to cut down cost per unit. 
• Gains from productivity can be transferred to consumers in the form of lower-priced products or better quality products. 
• Paying workers or employees at a higher rate because gains can be shared with them.
• A more productive entrepreneur can have better chances to exploit expert opportunities. 
• Generate more employment opportunity. 
• Overall productivity reflects the efficiency of the production system. 
• More output is produced with the same or less input. 
• The same output is produced with lesser input. 
• More output is produced with more input. 
• The proportional increase in the output is more than the proportional increase in input. 
• It is greatly helpful in achieving overall prosperity and growth of an economy.   

Definition of productivity

Productivity is the ratio of financial output in a period of time to the financial input in the same period of time.

Productivity is also called financial efficiency. 

Productivity = Financial efficiency 

= Financial output ( in a period of time ) / Financial input ( in the same period )

In other words, productivity is the quantitative relationship between what we produce and the resource which we used.