Branches of Production

Production can be divided into: industry, commerce and direct services. Industrial workers can be divided into (a) extractive, (b) manufacturing, and (c) constructive workers.

Extractive workers obtain raw materials and food from the land and the sea. Examples of such workers are farmers, fishermen coal-miners and workers on oil rigs.

Manufacturing workers take the raw materials from extractive industry and convert (or change) the raw materials into semifinished or finished products. Thus sand and other raw materials will be used to make glass windscreens for cars.

Constructive- workers take the products from manufacturing industry and build other products, for example, roads and houses. Those who, for example, assemble cars are also part of the constructive industry.

Commerce is concerned with the means by which raw materials and finished products are distributed to those who wish to buy them. The activities which make up commerce are shown in fig 1.

The basic commercial activity is trade, which is the buying and selling of goods. Thus in home trade, wholesalers buy goods from manufacturers and sell them to retailers who, in turn, sell goods to the general public. In foreign trade, goods are sold to and bought from other countries (exports and imports).

So that trade can easily take place, the aids (or ancillaries) to trade are necessary. Thus, for example, warehousing is needed to store goods. Insurance provides compensation if goods are stolen and banking allows payments to be made or received by cheque, and allows borrowing using loans and overdrafts. Advertising makes goods known to the public. Transport enables goods to be delivered by sea, for example, to other countries and communica-tions allow firms to make contact by telephone. The activities just described are only a few examples of trade and aids to trade.

Those involved in direct services are not concerned with the provision of goods but instead, provide personal services to the public. Examples of such workers are doctors, dentists, the police, leachers and entertainers.

It is true that those working, for example, in banks and shops also provide a service to public. Such workers have already been classified as commercial workers and do not therefore, belong to direct services. Direct service workers are an important part of production because: (a) an educated and healthy work force allows the output of goods and services has increased, and (b) the demand by individuals for direct services rises with the improvement in a country's standard of living.

Дата добавления: 2015-10-29