myz-vgb.ru A Business Encyclopedia

Production Function

Definition: The Production Function shows the relationship between the quantity of output and the different quantities of inputs used in the production process. In other words, it means, the total output produced from the chosen quantity of various inputs.

Generally, production is the transformation of raw material into the finished goods. These raw materials are classified as land, labor, capital or natural resources. These may be fixed or variable depending upon the nature of the business.

This function establishes the physical relationship between these inputs and the output. The efficiency of this relationship depends on the different quantities used in the production process, the quantities of output and the productivity at each point. It can be shown algebraically:

O = f (I1, I2, I3, I4…….. Zn)

Where, O = quantity of output

I1, I2, I3 = Quantity of different inputs

It can be classified on the basis of the substitutability of the inputs by other inputs:

production functions

  1. Fixed Proportion Production Function
  2. Variable Proportion Production Function
  3. Linear Homogeneous Production Function
  4. Cobb. Douglas Production Function
  5. Constant Elasticity of Substitution 

Thus, it is a comprehensive function that involves different activities ranging from the production of output from the given inputs and its distribution by the marketing division of the organization.

Leave a Reply

Your email address will not be published. Required fields are marked *

Shares

Related pages


whatishumanresourceinventory turnover ratio definitionspan of control advantages and disadvantageswhat is marginal costingdefine maslowjob rotation advantages and disadvantagesmax weber bureaucracy definitionvertical diversification definitionthe nominal group techniquedefine operant conditioning theoryprocess of hr auditeconomic profit meaningdiversification strategies in strategic managementmodigliani & milleransoff's matrix definitionmethod of evaluating capital investment proposalschronic unemployment meaningwhat is marketing segmentationcardinal utility functionspan of control organisational structuredefine regiowholesale lending definitionequity theory of relationshipslaw of increasing marginal utilityformal and informal groupsmarkup pricing strategyovercoming emotional barriers to communicationtypes of oligopoly market structurekanban binmutually exclusive projects definitiondisguises meaningdefinition of subordinatesparticipative leaderwhat are the three ethical theoriesdefinition of guerrilla marketingleadership styles autocraticfinance payback periodexpectancy theory victor vroomdefine ppfisoquantdivestiture exampleseven elements of communication processwhat is bell curve method of performance appraisalautocratic leadershippsychoanalytic approach definitionrupee volatility meaningdefinition of speculatorsdefinition of unstructured interviewcharacteristics of sampling distributionpurchasing power parity definitionholistic brandingan example of a laissez-faire leaderresembles meaning in teluguwhat are the determinants of elasticitywhat is verbal messagesfunctions of collective bargaining in industrial relationswhat is a convertible debenturedefinition revitalizespearman correlation example problemlaw of diminishing marginal utility exampleoligopoly definition in economicstools of monetary controlmarginal or variable costingmeaning of surplus in hindiguidelines for effective delegationcommunication meaning in urdupaired comparison scalingdefinition operant conditioningpost office savings monthly income schemewhat does the word judgemental meanperformance evaluation in hrmexplain elasticity in economicsconcept of elasticity of supply and demandmeaning of demand pull inflationordinal versus cardinal