What Do We Mean by Production (Irenée SAWADOGO)
Economists recognize three different kinds of production in relation to goods.
Changing the form of a commodity. By this, we mean taking raw materials and turning them into finished articles ; the sort of production we all easily recognize.
Changing the situation of a commodity. Two things, identical in appearance, quality and structure, are not alike economically if one is in Ouagadougou and the other in Bobo. Clearly, it is of little use to a man in Dori who is in need of sugar to know there is a good supply in Banfora : the company engaged in this kind of production, precisely the SOSUCO, is concerned with the transfer of goods from their place of manufacture to the consumer.
Changing the position of a commodity in time. A kilogram of millet in august is not the same as a kilogram of similar millet in November. In order to enable us to buy commodities at the time when we want them, it is necessary for someone to build up stocks hen the goods are in plentiful supply, and hold them until consumers want them. This is one of the main functions of wholesalers, and to a lesser degree, of retailers.
Most people would probably regard only the changing of the form of a commodity as being a productive process ; but production is not really completed until the goods have reached the people who actually want to consume them. Changing the geographical situation of a commodity or the time of its availability are essentially the final stage of production ; and economically, they are of equal importance to changing raw materials into finished products.
Adapted from The Structure of Modern Commerce
1) What is commonly considered as production?
2) What are the different types of production given by the author?
3) Why can we consider changing the time of availability of a commodity as production?
4) Would you agree that all these forms of production are of equal importance?