iGCSE Commerce Edexcel

Production

THE CONCEPT OF PRODUCTION

• Comprehend that production refers to the process of creating goods or services from various resources.
• Understand that production encompasses three types: primary, secondary, and tertiary.
• Recognise that production is a fundamental element of business strategies.

PRIMARY PRODUCTION

• Define primary production as the extraction of raw materials and natural resources directly from the earth.
• Explore various examples of primary production like mining, agriculture, and forestry.
• Learn that primary production feeds into secondary production.

SECONDARY PRODUCTION

• Understand secondary production as the process of turning raw materials from primary production into finished or semi-finished products.
• Cover examples of secondary production including manufacturing cars, producing food items, making furniture, etc.
• Remember that secondary products are typically consumed by individuals or used in further tertiary production.

TERTIARY PRODUCTION

• Define tertiary production as consumption-related activities, often referred to as the service sector.
• Investigate examples of tertiary production including retail, healthcare, transport services, etc.
• Associate the rise of the digital economy and automation with a rise in the importance and complexity of the tertiary sector.

FACTORS OF PRODUCTION

• Recall four key factors of production: Land, Labour, Capital, and Enterprise.
• Understand that Land refers to natural resources, Labour to human effort, Capital to money or machinery used in production, and Enterprise is the risk-taking and coordination by entrepreneurs.
• Analyse how the efficient and effective use of these factors affect productivity and profitability.

PRODUCTION METHODS

• Discuss different production methods: Job production, Batch production, and Flow production.
• Understand that Job production involves producing a one-off item according to customer specification.
• See that Batch production involves producing a limited number of identical items, and Flow production involves mass producing identical items in a continuous process.
• Compare the advantages and drawbacks of each method with respect to cost, scale, quality and flexibility.

PRODUCTION EFFICIENCY AND QUALITY

• Explore the concepts of productivity and efficiency in production.
• Recognise that improving productivity means more output from the same input.
• Review ways to improve productivity such as training, automation, new technology, and effective management.
• Understand the importance of quality in production, its link to customer satisfaction and branding, and techniques to ensure and improve it like quality control and total quality management.

SUSTAINABLE PRODUCTION

• Define sustainable production as production methods that meet present needs without compromising future needs.
• Understand the importance of environmentally friendly and ethical production methods.
• Discuss the concept of corporate social responsibility in terms of production, the benefits and challenges it presents for businesses.