1 BIZ BITS PRODUCTION Production is the process of making and supplying goods and services in order to satisfy people’s needs and wants through the offer of a large variety of products. The process is divided into three parts: : raw materials and machinery; Input ; Transformation process : finished goods and services. Output Goods and services are any tangible and movable personal property which is the object of a business transaction. They can be divided into: Goods , which are goods used to produce other goods, such as or industrial machinery. They do not satisfy needs or wants directly; capital goods raw materials , which are goods for everyday use such as food, clothing, or electrical devices. They satisfy needs and wants directly. consumer goods Another distinction can be made between: , which are consumed soon after they are bought or used just once such as food; non-durable goods , which have a longer life and can be used repeatedly, such as furniture or clothes. durable goods are non-physical products such as education, entertainment, transport, or tourism. Services Needs and wants are necessities for the survival of people, animals or organisations, i.e. things we could not live without, such as water or food. are desires, i.e. everything that is not essential but that can make our lives easier or happier, such as a new car or a TV set. Needs Wants The factors of production The are the resources needed to produce goods and services. factors of production Land Labour Capital Enterprise The production site and all the natural resources above or below the surface (e.g. air, sunlight, trees, soil, minerals, etc.). The human input in the production process. The professionals working for a company are also defined as human capital. All monetary resources or other such as machinery and equipment. assets The combination of the other three factors by entrepreneurs, i.e. people with original and innovative ideas. The sectors of production According to the sectors in which they operate, businesses can be classified according to the following table: Primary or Extractive Secondary or Manufacturing Tertiary or Services Quaternary The extraction and production of raw materials from nature (mining, forestry, farming, fishing, etc.). The transformation of raw materials into finished products (manufacturing, building and construction, etc.). The provision of services (personal, commercial and social). Intellectual activities such as R/D and ICT. The interdependence between the sectors is known as the . chain of production