CHAIN OF

PRODUCTION
 Common Definitions
1.Commerce
Commerce is the study related to
distribution of product from producer to the
consumer.
2.Product
Product are the goods and services produced
by company to satisfy needs and want of
humans.
3.Production
Production is any activity which serves to
satisfy needs and wants of humans.
4.Producer
Producer is a person or company who
produce products to satisfy needs and want of
humans.
5.Consumer.
Consumers are the ultimate user of the
goods and services produced.
6.Needs
The things human beings require for
survival such as food, water, and shelter.
7.Wants
Things that people would like to have that
make life more pleasant such as a television,
phone, car
 PRODUCTION

Primary Secondary Tertiary

Industry Services
 Types of production
1.Direct production
- Goods and services are produced for own
consumption.
- Goods produced are of small quantities.

2.Indirect production
- It is when a person concentrates on one occupation
and produces a surplus.
- Goods produced are of large quantities.
 Stages of production
1.Primary
- First stage of production.
- Primary production is obtaining raw material
and food from nature.
- It includes exhaustive and non- exhaustive
industries.
- Product are in unusable state
Exhaustive industry
Includes extractive industries eg, mining, drilling.
Non- exhaustive industry
Includes genetic industries e.g, fishing,
farming.
2.Secondary
- Second stage of production
- Secondary production is making goods
from raw material.
- Includes manufacturing, processing and
constructing.
- Products are ready to use , so moved at
tertiary stage.
3. Tertiary
- Third stage of production.
- Includes direct and indirect ( Commercial)
services.
Direct services
Provision of person services directly to
consumer without anyone else involved e.g,
doctor, teacher.
Indirect service/ Commercial service
These services related to distribution of
product from producer to consumer.