Economic and production activity

The principle of efficiency and the need for production management. The essence of stop activity is to ensure one’s own and others’ existence. This existence is associated with the satisfaction of certain human needs, and they, in turn, become incentives for economic activity.

Satisfying human needs is not only a motive for people’s actions, but also helps to increase their well-being and therefore the means that contribute to their benefit are called goods. The goods are material/food, equipment, housing /; services / medical, insurance, etc./; or in the form of rights. In principle, the goods are insufficient and therefore are free and economic.

Air, seawater, etc. are free – ie. those that can be used relatively freely. Economic goods/materials, services, rights / are significantly less and for them, a certain circle of people is willing to pay a price. Stop activity is a process of interaction of people with nature to acquire goods, as well as the interaction between people in carrying out this process. Production is an essential part of economic activity.

Through it, a resource is transformed so that it acquires consumer value for humans. Man’s mental and physical efforts to turn a natural resource into a product are called labor. The aim here is to make such transformations of the resource that lead to the creation of a product. Within the production process, two interconnected but different forms of activity develop and in practice exist.

These are the production of tangible products/sphere of material production / is carried out in enterprises and the second is related to the production of intangible products/sphere of services, and the business units are service organizations. Reference: “Effective management of organizations“,

Production activity is a structural element of the economy. It, in turn, is the interaction and exploitation of man over man and man over nature. The opportunity to study and clarify the problems of production is the analysis of the interaction “Society – Nature”.

In principle, the interaction “Society – Nature” can be reduced to the following: Nature is the whole, real material world and is defined in three systems / inanimate matter, living nature, human society /. Human life and economic activity take place only in a certain part of nature and the earth’s space, which is called the natural environment. It is characterized by: spatial limitations, the presence of certain species and real reserves of natural resources, the development of the natural environment is carried out according to natural laws, the continuous impact of nature man. Human society is a specific part of the material world, qualitatively different from other components.

To exist and survive, to adapt to nature and use its resources, man has been forced to unite in his life and economic activity. The natural environment around us has been modified and exploited by many generations of people. The development of the natural environment is carried out according to natural laws, and human society develops according to specific social laws. Natural laws are objective reality, while economic laws and processes are consequences or states. Hence the contradictions between the need to satisfy and the natural limitations of resources. Nature performs a 2nd function in the process of interaction.

On the one hand, it plays the role of the living environment, and on the other hand, it is a constant prerequisite for social development as a source of energy and resources. In connection with the implementation of its production activities and solving the issues of “what, how, how much” society is limited by several circumstances: Limited and insufficient resources;

Continuous enrichment and renewal of people’s needs. As a result, it must be decided how material goods should be produced – labor-intensive or labor-efficient, material-intensive or non-material-intensive, environmental or not. As a result of the ever-increasing impact of human society on nature, it leads to negative consequences that lead to endangering health, vital activity, and even the survival of the planet.

The nature of production and its organization is determined by several factors, but mostly by the level reached and the degree of use of the material and technical base.

The objective existence of the contradiction between the growing human needs and the limited natural resources forces the person to carry out his activity effectively, to organize it in such a way that from the limited resources to achieve maximum satisfaction of the needs. From this statement is derived as a basic principle of economics – the principle of efficiency.

In principle, it can be expressed in three ways: a / striving to achieve the greatest possible result from material or intangible goods; b / by demanding to achieve the planned result with minimal production resources, c / striving for a higher ratio between results and degraded resources.

The principle of production management

The principle of production management is the process of decision-making and action of the people of the organization to effectively achieve certain goals. It is expressed through specific production decisions on strategy, policy, operational management, and control. Reference: Monitoring and control in project management.

The principle of efficiency and the presence of several interacting environments give grounds to talk and evaluate the following types of efficiency; physical efficiency Ef = output in-in input = product/service on degraded production resources and should be close to one Ef≤1.0; Economic efficiency Ei = utility in cost, Ei≥1.0; total efficiency Eo is a result value, the value of which is the product of the already considered efficiencies Eo = Ef. Еи≥1,0.

The latter dependence makes clear the need for a recurring factor and tool to influence the physical and economic environment. That is why production management, in its role as a factor and instrument, is called to provide such products that will ensure a balance in the relationship “supply-demand” and apply such engineering and management knowledge and solutions that ensure effective use of limited natural resources. resources.

By Robert Brown

Robert Brown is a longtime manager of a technology organization and author of a management book. In his spare time, Mr. Brown helps students get a better education by helping to publish free study materials.

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