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Factors Of Production In Business Studies
Factors of production are those resources which must be available before production can take place. In other words, they are resources which makes it possible for goods and or services to be produced. They are sometimes called agents of production. The factors do not paly singular or exclusive role in production but they play complimentary roles for production to take place.
This is the natural resource used in production. It include water, soil, minerals, and air. It does not only mean the place where farmers cultivate in order to plant crops. It includes all natural activities which go into production. Industries make use of resources around them. For instance, shell craft industries make use of shells to creat wonderful accessories. Juice manufacturing industries make use if citrus ( orange, grape, lime, lemon, tangerine, shadock, etc) to produce canned or paper juice. Beverage industries use cocoa to produce beverages like Vitalo, Ovaline milo, bournvita, chocolate drinks, etc. The reward for land is rent. Every industrial or production activities take place on land.
This is another factor of production that make production possible. It is the human resources in production. Human beings are the greatest resource in production because they perform the critical roles in production like the technical or marketing functions. Labour includes elements of human skill, efficiency and acumen. For instance, it is man that plans and executes production, Man provides other resources needed in production. Labour is a fundamental factor of production. The reward for labour is wages/Salaries.
Capital as a factor of production may be defined as any resources made by man and set aside for further production. It could be also be referred to as human made goods that are to be used in production. Capital can be derived from savings made out of a worker’s salary Examples of capital include building machines, equipments, raw materials, and finished goods. Reward for capital is interest.
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The entrepreneur is a person that controls and makes use of the other factors of production like land, labour and capital in such a way that it can generate profit. Entrepreneurs invest in the other factors of production in order to come up with products and services that would entice (appeal to) customers to buy.
The reward of entrepreneur is profit. From the above explanations we can rightly say that production is the focal point of marketing because if there is no production, there will be nothing to market. Production can also as well be defined as the focal point around which marketing activities revolve. Products or services have to take care of the customer’s needs. They should satisfy the customer or serve as aids to attain a fulfilling end.