Concept of production

Concept of production

This is the process of making goods or rendering services for the satisfaction of human wants e.g. process of changing the goat skin into pairs of shoes.

Production can also be defined as the creation of utility. There are several types of utility. These are:

1. Form utility This is the utility which is provided by the manufacturing or constructive industries which deals with changing the form of production.
2. Time utility This is the utility which is provided by warehousing which deals with changing the time of consumption.
3. Place utility This is the utility which is provided by transport which deals with changing the place of consumption.
4. Possession utility This is the utility which is provided by trade which deals with changing the ownership of consumption.