SENIOR HIGH SCHOOL

ABM - Specialized Subject

4th Quarter

ENTREPRENEURSHIP

VIRGILIO R. JAO JR. (PhD Candidate)

Department of Education Republic of the Philippines

 SENIOR HIGH SCHOOL

ENTREPRENEURSHIP
Quarter 4 - Module 1

The 4Ms of Production in Relation

to the Business Opportunity

Prepared By:

VIRGILIO R. JAO JR.

Master Teacher I

Executed By:

Venus M. Yagyagan Ruphella L. Esperanza

Teacher II LGU Teacher

Aileen N. Labao
LGU - Teacher

We value your feedback and recommendation.

Department of Education Republic of the Philippines

 ENTREPRENEURSHIP
Quarter IV – Week 1

CONTENT STANDARD:
The learner demonstrates understanding of environment and market in one’s locality/town.

PERFORMANCE STANDARD:
The learner independently creates a business vicinity map reflective of potential market in one’s
locality/town.

WHAT WILL YOU LEARN?

At the end of this module, you should be able to:

1. Be able to have an understanding of the 4Ms of Operations.

2. Describe each of the 4Ms in relation to the business opportunity.
3. Develop an effective product description
4. Be able to create own product example and test it.
5. Demonstrate honesty in answering the activity.

WHAT I NEED TO KNOW?

This module was designed and written with you in mind. It is here to help you to describe the 4Ms of
Operations in Relation to the Business Opportunity. The scope of this module permits it to be used in many
different learning situations. The language used recognizes the diverse vocabulary level of students. The
lessons are arranged to follow the standard sequence of the course.

In developing a business plan we also have to consider the importance of the 4M’s of operations in all
business opportunities. Because it helps you to identify the problems of the business in the future and in
actual situation especially in the production process and marketing.

WHAT DO YOU ALREADY KNOW? PRE-TEST

Hi! Hope you are having a great day today as we start our fourth quarter, Just like the previous lesson, we
will have our pre-test to check your prior knowledge about the topic. If you got a perfect score, you can skip
this lesson and proceed to the next module, but if you didn’t get a perfect score, you don’t have to worry
because this module will help and guide you to understand the topic Are you ready? Let’s start.

Directions: Choose the letter of the best answer. Write the chosen letter on a separate sheet of paper.

1. It suggest how raw materials will be transformed using the other factors in the production.
a. Machine c. Material
b. Manpower d. Method
2. It is not limited to muscular activities but also intellectual, creative abilities etc.
a. Capital c. Land and technology
b. Labor d. Money
3. It is another term used to describe factor inputs because of its transforming properties.
a. Intermediate input c. Processors
b. Productive input d. Transformers
4. The following are productive inputs EXCEPT for one.
a. Capital c. Land and technology
b. Labor d. Money
5. The Kitchen Therapy bake cakes and pastries, and sugar is one of the must have in their grocery list.
What does sugar represents in their production of goods?
a. Machinery c. Raw material
b. Decoration d. Finished product
6. Entrepreneurs can protect their product through _____________.
a. Connivance c. Bribery
b. Patent d. Black Propaganda
7. It is a process of appointing a third party manufacturer to do the manufacturing operations of the business.
a. Operation Planning c. Outsourcing
b. Manufacturing d. Training
8. Cost, quality and availability should be considered in choosing _______.
a. Product c. Material
b. Price d. Machine
9. It is the first version of the product.
a. Supply c. Imitation
b. Sample d. Prototype
10. What is not a risk in outsourcing?
a. Saves you from buying expensive machines c. Outsource company closes
b. Runs out of supplies d. Produces sub-standard products

You have finished answering the pre-test. You may request your facilitator/guardian to check your work.
Congratulations and keep on learning!

WHAT’S NEW
This activity will give you an overview of what we will discussed about the 4Ms of Production in Relation
to the Business Opportunity.
Activity: Can you analyze the pictures below? Give a brief description based on what you have observed.
Write your answer in intermediate PAD paper.
LET US STUDY:

Describe the 4Ms of Production in Relation to the Business Opportunity

If Sales is the engine that powers Auto Salvage yards then Production is the drive train that gets
us where we are going. Production is both reactive and proactive almost simultaneously. It reacts
to what is sold today and must meet the expectations set by the sales team; also, it must
anticipate what most likely will be needed in the near future. The key for production is to have
procedures and processes that can accomplish both. Operations Management then controls
the implementation of the business plan. Once our procedures are set up to maximize efficiency,
it is time to train the production staff on their individual responsibilities centered on the 4Ms of
Production.

So, what are the 4Ms of Production? It is the Method, Manpower, Machine and Materials. They
are also called as the four critical domains, usually associated to manufacturing. These four are
also related to business opportunities since most business is tied to manufacturing also. The
businessman per se should look all four into account.

4Ms of Production

Figure 1

Let’s take a look at each one:

1. Methods - suggest the process of combining raw materials and how these are going to be transformed
using the other factor inputs of production. This resource input is also called technology or techniques of
production since it prescribes the intensity in the use of factor inputs.

If labor is abundant and cheap in the locality, the firm might use more labor-intensive techniques. This only
means that they will use labor more than other factor inputs. However, if labor is expensive and capital is
cheap the firm or company may implement a capital-intensive technology. This means that will use more
capital compare to the other factor inputs.

Ex. Now in the production of pandesal,the mixing of ingredients will use manual labor intensively as applied
by small bakeries. On the other hand, large bakeries in urban areas will use modern baking equipment and
utensils that are capital intensive.
2. Manpower – the right human resources who will handle certain business operations. It is one of the
highest cost of operating the business, but also the most instrumental to its success.

- It does not only include labor or muscular power nut also intellectual, creative abilities and other qualities
of individuals that can contribute to the production.

As the business grows, the entrepreneurs should hire qualified employees that can handle operational
functions even without his assistance, so that he will be free from daily activities and can focus on thinking
of new strategies and functions of the business.

Ex. In the production of pandesal, manpower resources include the baker, and his assistants who will
implement the recipe using the available equipment, and technology. The manager, sales clerks , and janitors
are also part of the manpower of the bakery

3. Machine – technology used in efficiently operating the business. It was also described as the “best friend”
of manpower in producing goods and offering services. Machines are not limited only to physical equipment
but can also pertain to new technologies. It also represents all man- made physical capital used in the
production process. Aside from machines the tools, durable equipment, and the physical plant are also part
of it. Without machines, business operations will be too unmanageable, costly and with low quality.

Ex. In the production of our pandesal, the machinery comprises the oven, baking utensils and the bakery
itself.

4. Materials – to be used in creating a product or performing a service, which includes supply chain
management.

Ex. In the process of producing pandesal, we need several materials that serve as intermediate inputs which
include flour, sugar, butter, eggs, salt and other ingredients.

 Make sure that your supplier of raw materials should have consistent and have sufficient amount of
supplies that can accommodate the demand of your company.

 The selection of the supplier depends on how they will not cause interruptions in the
production of goods and serving customers.

Materials Requisitioning Options

 Manufacturing own products or offer services – if this is the case entrepreneurs need to prepare huge
capital for the materials, machines and manpower which we all know will cause the company a greater
risk. However, through this entrepreneurs can closely monitor the quality of his product and can build
his own name overtime making his own brand identity.

 Outsourcing of manufacturing or service activities to a third party – this is the process where a company
appoint a third party manufacturer to do the manufacturing operations of the business. Expertise wise
these third party companies have more experience and can handle manufacturing products tailored to
the entrepreneur’s needs at a lower cost. It also saves the entrepreneur from buying expensive
machineries, but has it also has its risk such as: Profit shared with the third party, they run out of supply,
when the outsource party closes its business and if they produced sub-standard products.

When outsourcing the entrepreneur must protect its product through a trademark or a patent and a
noncompeting or nondisclosure agreement.

 Patent – the right to protect the entrepreneur regarding the product or service.
  Trademark – a sign or symbol that helps to distinguish the product from the others
 Nondisclosure Agreement – states that the third party will be given full access to any
confidential information provided that it should be disclosed to anyone else.

 Purchasing own products or services from present suppliers – this is where entrepreneurs
purchased finished products from manufacturer or offering the services of another company. The
company can save the cost of the machines and manpower. However, the entrepreneur cannot own
the brand name of the product or service and the manufacturer is not restricted to sell to the
entrepreneur’s competitors.

Traditionally, these are the crucial four (4) domains of production where one cannot function properly
without the other. However, allow me to add another M in this list.

Money – it is a financial resource used to purchase all the resources needed by the firm for its
operation. The owners of the company contribute seed money for the initial operations of the firm.
It is also needed to purchase raw materials, pay salaries of the workers and managers and durable
equipment needed for the company.

In the economic analysis of production, the resource inputs mentioned above are grouped into two major
categories – intermediate inputs and factor inputs.

 Intermediate inputs – are semi-processed materials that need further transformation to produced
a finished product. They are also called raw materials or materials.

 Factor inputs – are the transforming inputs that will process the intermediate inputs into finished
products. They are also called productive inputs because of their transforming properties. This
includes labor (manpower), capital (machinery), land and technology (method).

While money does not have a direct participation in the physical transformation of the intermediate inputs,
it is very crucial in the production process. As mentioned earlier, we use it to purchase materials, pay
workers’ salaries and wages and even the machineries we use.

Now that we already know how important 4Ms are in the business process together with the 7Ps of marketing
mix, we can definitely make the Ayalas or even the Lopezes run for their money right? We should only need
to understand and know how to entice our prospective buyers to buy our products.

How will we do that? Definitely through an effective product description, you can guarantee that they will
hit that “add to cart” button in an instant. Product description is one of the important aspect of selling, you
have to visualize what your target market will patronize and would like to have. Here’s the 3 Rules to
Visualize a Product Descriptions That Sell.

1. Know who your target audience is – you might want to highlight the things that might interest your
potential buyers. You can actually do this by knowing what specific demographics you are going to cater. Is
it for teens? Young professionals or Seniors. By knowing such you will have a specified goal to achieve
once you roll your product.

2. Focus on the Product Benefits – know the difference between product features and benefits. A product
feature is a factual statement about the product that provides technical information. A product benefit, on
the other hand, tells how the product can improve the buyer’s life. If you are the customer I know you will
choose the latter. However, you can always convert the features into benefits.
3. Use good product images – aside from the description, a quality image will do the trick. Why? Because
63% of customers think that a product image is more important than the description or even the reviews. So
an important aspect of your product description is actually in the photo itself. Quality photos will show the
customer all of the key features about your product. They will also allow the customer to imagine having
this product in her life.

Once you already have a clear vision of what should be the description of your product. We can now
create our own prototype.

What is Prototype?

You have visualize a great product. You can imagine how this particular product will make a change and
how it will be a great help to make our life easier. However, what we have in mind is sometimes a lot difficult
to explain so we create a mock-up of what the final product will look like, that is a prototype. A Prototype
is an initial creation of a product that shows the basics of what product will look like, what it will do and
how it will work. However, it is not meant to be the final version as there will be lots to improve.

Figure 2: prototype example

Advantages of Prototypes:

1. Creating prototype gives you the opportunity to test and refine the functionality of your design.
2. It makes it possible to test the performance and quality of the materials.
3. It will help you describe your products more effectively with potential buyers.
4. It will encourage others to treat you more seriously.

LET US APPLY WHAT YOU HAVE LEARNED

Good job you are almost done, did you enjoy the activity? Now it’s time for us to check what we have
learned by listing down the important facts that have retained in your mind about the 4Ms of Production.
Activity: : Write down inside the treasure box the lessons you have learned about 4Ms of production. Write
your answer in intermediate PAD paper.

WHAT I CAN DO? (Performance Task)

Congratulations! You are now ready to apply what you have learned about Production. Time for us to
exercise our brains.
A. Suppose that you are going to put up a new business venture, how will you plan to do your operations?
What Method will you use? Who will you hire for a specific task? Will you use Machineries? How about
the materials? Fill the boxes below on how will you apply what you have learned regarding the 4Ms of
production/operation.

Explain your answers.

B. Suppose you will put up a store, what product will you offer your customer? Draw or paste cut-outs of
your product prototype and give a brief description that will entice your customer to make a purchase. Write
your answer in intermediate PAD paper.

In the beginning of this module we have our pre-test. Now, this will serve as your post-test.
This will test you if you were able to understand the lesson well. God Bless!

HOW MUCH HAVE YOU LEARNED FROM THIS MODULE? (POST TEST)
Part I. Multiple Choice. Choose the letter of the best answer. Write the chosen letter on a separate sheet
of paper.

1. The Kitchen Therapy wanted to help her customers to distinguish her product from the other pastry shop.
What do they need to do to accomplish such?
a. Use of Trademark c. Bribe the people
b. Advertise d. Give brochures
2. Melinda wanted to use tools that will lessen their burden in doing manual work. What production factor
will she look at?
a. Method c. Machine
b. Manpower d. Materials
3. Machines are considered as the “best-friend of the _______________ in producing goods and offering
services.
a. Method c. Machine
b. Manpower d. Materials
4. Which of the following is NOT included in the factor inputs of production?
a. Land and Technology c. Labor
b. Money d. Raw Materials
5. Food Overboard agreed to give Cravings by Kaye a full access to any confidential information of the
company, provided that they will not disclose it to anyone else. What type of agreement do they have?
a. Prenuptial c. Bill of Sale
b. Property d. Nondisclosure
6. It is the M where one should look at one’s ability, intellect and creative ideas.
a. Material c. Manpower
b. Money d. Method
7. When looking for a supplier one must consider the following except for one.
a. People c. Cost
b. Availability d. Quality of the product
8. It is considered as the most important factor in the production.
a. Labor c. Raw Material
b. Land and Technology d. Capital
9. What does the equipment represents?
a. Manpower c. Material
b. Method d. Machine
10. Which among the following talks about the process of the production?
a. Manpower c. Material
b. Method d. Machine

Part II. Modified True or False. Write TRUE if the statement is correct if FALSE underline and correct
the word that make it false.

____________ 11. The 4Ms of production cannot function properly if one of the M’s is not included.

____________ 12. A product prototype is the final product that you will sell in the market.

____________ 13. In manufacturing own products or offer services, an entrepreneur must prepare
a huge amount of capital for the expenses.

____________ 14. Outsourcing a third party manufacturer have a lot of risk involve as well as
advantages.

____________ 15. A good product description can double the sales.

Additional Activity:
Activity: A. Enumerate and define the 4Ms of production + 1 in your own words. Write your answer in
intermediate PAD paper.

1.___________________________________________________________________________________
___________________________________________________________________________________
2.___________________________________________________________________________________
___________________________________________________________________________________
3.___________________________________________________________________________________
___________________________________________________________________________________
4.___________________________________________________________________________________
___________________________________________________________________________________
5.___________________________________________________________________________________
___________________________________________________________________________________

This is the start of Module one (1). You did a great job! It is Indeed an achievement.
Congratulations!!! Hard work pays off and you really proved it!!! Try to learn more about
Entrepreneurship in the next Modules. Thank you for being patient, honest, and committed.
REFERENCES:

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ELECTRONIC RESOURCES

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&o q=supp&gs_l=psy-
ab.1.0.0i67l8j0l2.337222.338710..340558...1.0..0.512.1404.0j1j3j5- 1......0....1..gws-
wiz.......0i71j0i131.pwF4FAungm0