Senior High School

Entrepreneurship
Quarter 2 – Module 1- Lesson 1:

Writer:
LOVE JOY C. OCAMPO
T-II – DIOSDADO MACAPAGAL
MEMORIAL HS
Editors:
JANE P. VALENCIA, EdD – Math/ABM Supervisor
CHAIRMAN

`
The 4Ms of Production in Relation to
the Business Opportunity

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 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. But the order in
which you read them can be changed to correspond with the textbook you are now
using.

The module is composed of one lesson and sub-topics, namely:

Lesson 1 – Describe the 4Ms (Materials, Machines, Methods and Manpower) of

Operations in Relation to the Business Opportunity

After going through this module, you are expected 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.

What I Know

Hi! Hope you are having a great day today as we start our second 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

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 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
b. Runs out of supplies
c. Outsource company closes
d. Produces sub-standard products

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

In the previous modules, we have discussed about marketing mix (7Ps) in relation
to the business opportunity and how one can develop their own brand name. Let us
have our review of what we have learned before we proceed with the 4Ms
of Production.

What’s In

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 Activity: A. Think, Pair and Share:

Directions: Ubecheesedesal is the new hype today. Imagine you will put up your own
ubecheesedesal store. How will you create an effective and integrated
marketing mix for it?

Product Price Place Promotion People Packaging Process

ubecheese
Suggestion
desal

Justification

Additional
factors to
consider

B. What’s in a name?

Directions: Considering your answer in activity A. Create a brand name that will catch
the attention of your customers.

_________________________________________________________________________

_________________________________________________________________________

_________________________________________________________________________

Notes to the Teacher

This module contains helpful tips and strategies that will help you
in guiding the learners . It is important to review learners to gauge
what they have learned before proceeding with a new lesson

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.

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A. ________________________________________

________________________________________

B. ______________________________________

_________________________________________

C. ____________________________________

_______________________________________

D. _____________________________________

________________________________________

________________________________________

What is It
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

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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.

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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.

o Patent – the right to protect the entrepreneur

regarding the product or service.
o Trademark – a sign or symbol that helps to
distinguish the product from the others
o 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.

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 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?

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 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.

What’s More

Did you enjoy the mini-lesson of the module? To better understand it, let’s have another
activity. Enjoy!

Activity:

Directions: Complete the sentence by filling up the blank. Find the correct answer in
the puzzle below.

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 e x m t e k r a m t e g r a t f
p i o j x n n r x m p a g c c v
y c n z i e u j u j o u n j l b
t n e i d r v d b b h z k b r w
o l y e y w d h a l a r v y j p
t p a t e n t i u t a l i p p c
o e u h c j e u w m g u a s u p
r u c t o s q u e s v x a v l c
p p v h b i d d i r u y o e s f
y o l v v e a c r c w k n n e i
q a p o w r t k m d v q j w v h
p v e s t l i w i x k p p w k a
g n z d r x y g t w s u o h z s
x h j y l y m f s h o a s i p w
m

1. ______________ is a financial resource used to purchase all the resources needed for
the business operation.

2. Product description is essential in promoting your product to your _______________,

through this strategy you will guarantee a conversion.

3. The ____________________ of the raw materials should have consistent and sufficient
amount of supplies that can accommodate the entrepreneur.

4.________________________ 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.

5. It is important for entrepreneurs to protect their product when outsourcing through

the use of _______________________ and __________________.

What I 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

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 4Ms of production.

1._____________________________

2. ____________________________

3. ____________________________

4. ____________________________

5. ___________________________

What I Can Do

Congratulations! You are now ready to apply what you have learned about
Production. Time for us to exercise our brains.
Activity:
A. Enumerate and define the 4Ms of production + 1 in your own words.
1.________________________________________________________________
__________________________________________________________________
2.________________________________________________________________
__________________________________________________________________
3.________________________________________________________________
__________________________________________________________________
4.________________________________________________________________
__________________________________________________________________
5.________________________________________________________________
__________________________________________________________________

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. Do it in a separate sheet
of paper.

Assessment

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 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!

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

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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 Activities

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.

METHOD: MANPOWER:

MACHINE: MATERIALS:

______________________________________________________________________________

______________________________________________________________________________

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