The economic system is a complex multifaceted phenomenon (“system” means a connection consisting of parts). The economic system is a part of society and has its own structure, the most important component of which is the production of material goods that meets the needs of society. In the structure of the economic system, a material and technical base is also allocated with its resources, which include means and objects of labor, labor resources in the form of labor.
All elements of the economic system are interrelated, are in a certain relationship to each other, depending on each other. In practice, this means having economic ties between producers and consumers. The social form of these relations is the economic relations that arise and function in production, at all its stages.
What is production?
It is common knowledge that people constantly need material goods that satisfy their diverse needs. Nature does not give enough ready for consumption of goods, in connection with which society must produce them using natural objects. This allows you to determine the production of the impact of man on the substances of nature in order to create material goods and services. Consequently, the goal of production is the satisfaction of human needs.
Since the produced material goods satisfy the society’s needs for food, clothing, housing, the benefits of production and in many other ways, without which the society can not engage in various activities and generally exist, it is fully justified that society is the basis of the production of material goods. And the higher the level of development of production, the higher the material standard of living of people.
TYPES OF PRODUCTİON
What types of production exist?
The type of production is a complex characteristic of the technical, organizational and economic features of production, due to its specialization, volume and consistency of the nomenclature.
If volume is used as a key factor in determining the variety of production types, five types of production can be identified:
Design production. Produces one object, and all production equipment is transferred to the place where the product is manufactured (construction project or facility). This is typical for construction.
Manufacturing of products by order. Production of one product for a specific customer. The manufacturer adapts his equipment to the production of the customer’s product. An example can serve as a system for the production of engines at the enterprise, intended for machines with high technical characteristics.
Production of products in batches. The product is of a recurring nature, with relatively large volumes. Production is divided into operations. Each operation is completed with a certain number of ordered parts, which are then used in the next operation, and so on, until the production stage ends.
Stream production. The volume of the product increases even more, it becomes necessary to introduce a special process in which individual parts or assembled blocks pass through each stage of production in sequence.
Continuous production. This process is typical, for example, for oil or chemical treatment facilities (which operate continuously) and is rarely found in small production plants.
WHAT ARE THE MAIN FACTORS OF PRODUCTION?
There are 3 main factors of production: objects of labor, which are substances to which human actions are directed, to adapt them to meet their needs, for example, raw materials, fuel and etc;
Means of labor – a thing or a complex of things with the help of which a person acts on objects of labor; The laborer with which natural objects adapt for consumption, material goods, including tools of labor, are created, that is, the conscious activity of people. In the process of labor, a person spends physical strength, nervous and mental energy, i.e. Thus, if the workforce is a person’s ability to work, then labor is a person’s real activity. And human activity is not limited to the expenditure of physical labor directly in the sphere of material production. The society is inconceivable without the various labor activities of man outside of direct production, where labor costs (the sphere of services, the costs of intellectual labor), recognized by society, take place.
We hope you liked the article and now, familiar with the main factors of production.