What is flow of Production ?

What is flow of Production ?

It means producing different goods and services using various inputs.

Important points

1. Production may be of goods or services

          Output of One production process may become Input of Other Production Process

INPUT ----------------------------> OUTPUT

RAW MATERIAL                        FINISHED PRODUCT

Note

Output of One production process may become Input of Other Production Process

Example

Suppose a Farmer produces Raw Cotton

He sells it to spinning mill

Spinning mill produces yarn which it sells to Textile Mill

Textile Mill produces cloth which it sell to a tailor

This Tailor produces a shirt from this cloth and sells it to a Consumer

Note

During a production process, a product looses its specific characteristics and get transformed into a completely new product

Example

Yarn is completely different from cotton, cloth is different from yarn and shirt is completely different from cloth

Farmer ---------> Spinning Mill ---------> Textile Mill ---------> Tailor ---------> Consumer

        I                            I                                         I                              I

   Produces              Produces                          Produces                Produces

   Raw Cotton               Yarn                                 Cloth                      Shirt

Note

During a production process, a product looses its specific characteristics and get transformed into a completely new product

Example

Yarn is completely different from cotton, cloth is different from yarn and shirt is completely different from cloth

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