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103-449: Pelikan Holding AG is a German manufacturing company of writing, office and art equipment. Credited with the invention of the differential-piston filling method, the original company was founded in Hanover in 1838 before it went bankrupt and restarted. Through a reverse takeover on 8 April 2005, Pelikan Holding AG is now an Aktiengesellschaft company (limited by shared ownership), part of

206-459: A Malaysian company, took over the majority of Pelikan holding shares. Pelikan moved to a new office building in Hanover in 2003. Two years later, Geha-Werke company merged with Pelikan, although operating as an independent division. In November 2009 Pelikan purchased rival stationery company Herlitz , which had been previously bought by "Stationery Products S.à.r.l.", a Luxembourg -based company. By

309-474: A Competitive Industrial Performance (CIP) Index, which measures the competitive manufacturing ability of different nations. The CIP Index combines a nation's gross manufacturing output with other factors like high-tech capability and the nation's impact on the world economy. Germany topped the 2020 CIP Index, followed by China, South Korea , the United States, and Japan. In 2023, the manufacturing industry in

412-432: A change in production input and a change in productivity. The figure illustrates an income generation process (exaggerated for clarity). The Value T2 (value at time 2) represents the growth in output from Value T1 (value at time 1). Each time of measurement has its own graph of the production function for that time (the straight lines). The output measured at time 2 is greater than the output measured at time one for both of

515-405: A criterion of profitability, surplus value refers to the difference between returns and costs, taking into consideration the costs of equity in addition to the costs included in the profit and loss statement as usual. Surplus value indicates that the output has more value than the sacrifice made for it, in other words, the output value is higher than the value (production costs) of the used inputs. If

618-414: A few of the critical elements that significantly influence production economically. Within production, efficiency plays a tremendous role in achieving and maintaining full capacity, rather than producing an inefficient (not optimal) level. Changes in efficiency relate to the positive shift in current inputs, such as technological advancements, relative to the producer's position. Efficiency is calculated by

721-466: A logic, objectives, theory and key figures of its own. It is important to examine each of them individually, yet, as a part of the whole, in order to be able to measure and understand them. The main processes of a company are as follows: Production output is created in the real process, gains of production are distributed in the income distribution process and these two processes constitute the production process. The production process and its sub-processes,

824-581: A product. Some industries, such as semiconductor and steel manufacturers, use the term fabrication instead. The manufacturing sector is closely connected with the engineering and industrial design industries. The Modern English word manufacture is likely derived from the Middle French manufacture ("process of making") which itself originates from the Classical Latin manū ("hand") and Middle French facture ("making"). Alternatively,

927-437: A production income model and a production analysis model in order to demonstrate production function as a phenomenon and a measureable quantity. The scale of success run by a going concern is manifold, and there are no criteria that might be universally applicable to success. Nevertheless, there is one criterion by which we can generalise the rate of success in production. This criterion is the ability to produce surplus value. As

1030-403: A production increase of an output of a production process. It is usually expressed as a growth percentage depicting growth of the real production output. The real output is the real value of products produced in a production process and when we subtract the real input from the real output we get the real income. The real output and the real income are generated by the real process of production from

1133-403: A production increase over consumption is seen as increased productivity. In an economic market, production input and output prices are assumed to be set from external factors as the producer is the price taker. Hence, pricing is an important element in the real-world application of production economics. Should the pricing be too high, the production of the product is simply unviable. There is also

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1236-416: A real measuring situation and most importantly the change in the output-input mix between two periods. Hence, the basic example works as an illustrative “scale model” of production without any features of a real measuring situation being lost. In practice, there may be hundreds of products and inputs but the logic of measuring does not differ from that presented in the basic example. In this context, we define

1339-567: A result, they make only a reactive contribution. Emerging technologies have offered new growth methods in advanced manufacturing employment opportunities, for example in the Manufacturing Belt in the United States. Manufacturing provides important material support for national infrastructure and also for national defense . On the other hand, most manufacturing processes may involve significant social and environmental costs. The clean-up costs of hazardous waste , for example, may outweigh

1442-494: A strong link between pricing and consumption, with this influencing the overall production scale. In principle there are two main activities in an economy, production and consumption. Similarly, there are two kinds of actors, producers and consumers. Well-being is made possible by efficient production and by the interaction between producers and consumers. In the interaction, consumers can be identified in two roles both of which generate well-being. Consumers can be both customers of

1545-636: A wood, bone, or antler punch could be used to shape a stone very finely was developed during the Upper Paleolithic , beginning approximately 40,000 years ago. During the Neolithic period, polished stone tools were manufactured from a variety of hard rocks such as flint , jade , jadeite , and greenstone . The polished axes were used alongside other stone tools including projectiles , knives, and scrapers, as well as tools manufactured from organic materials such as wood, bone, and antler. Copper smelting

1648-423: Is a low productivity job. As a result, average productivity decreases but the real income per capita increases. Furthermore, the well-being of the society also grows. This example reveals the difficulty to interpret the total productivity change correctly. The combination of volume increase and total productivity decrease leads in this case to the improved performance because we are on the “diminishing returns” area of

1751-502: Is believed to have originated when the technology of pottery kiln allowed sufficiently high temperatures. The concentration of various elements such as arsenic increase with depth in copper ore deposits and smelting of these ores yields arsenical bronze , which can be sufficiently work-hardened to be suitable for manufacturing tools. Bronze is an alloy of copper with tin; the latter of which being found in relatively few deposits globally delayed true tin bronze becoming widespread. During

1854-484: Is conventionally defined by the widespread manufacturing of weapons and tools using iron and steel rather than bronze. Iron smelting is more difficult than tin and copper smelting because smelted iron requires hot-working and can be melted only in specially designed furnaces. The place and time for the discovery of iron smelting is not known, partly because of the difficulty of distinguishing metal extracted from nickel-containing ores from hot-worked meteoritic iron. During

1957-469: Is distributed through the interaction between the company's stakeholders. The stakeholders of companies are economic actors which have an economic interest in a company. Based on the similarities of their interests, stakeholders can be classified into three groups in order to differentiate their interests and mutual relations. The three groups are as follows: Customers The customers of a company are typically consumers, other market producers or producers in

2060-419: Is improving quality-price-ratio of goods and services and increasing incomes from growing and more efficient market production, and the second is total production which help in increasing GDP . The most important forms of production are: In order to understand the origin of economic well-being, we must understand these three production processes. All of them produce commodities which have value and contribute to

2163-550: Is most commonly applied to industrial design , in which raw materials from the primary sector are transformed into finished goods on a large scale. Such goods may be sold to other manufacturers for the production of other more complex products (such as aircraft, household appliances , furniture, sports equipment or automobiles ), or distributed via the tertiary industry to end users and consumers (usually through wholesalers, who in turn sell to retailers, who then sell them to individual customers). Manufacturing engineering

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2266-536: Is seen as the key economic indicator of innovation. The successful introduction of new products and new or altered processes, organization structures, systems, and business models generates growth of output that exceeds the growth of inputs. This results in growth in productivity or output per unit of input. Income growth can also take place without innovation through replication of established technologies. With only replication and without innovation, output will increase in proportion to inputs. (Jorgenson et al. 2014, 2) This

2369-399: Is the "primus motor" of economic well-being. The underlying assumption of production is that maximisation of profit is the key objective of the producer. The difference in the value of the production values (the output value) and costs (associated with the factors of production) is the calculated profit. Efficiency, technological, pricing, behavioural, consumption and productivity changes are

2472-484: Is the case of income growth through production volume growth. Jorgenson et al. (2014, 2) give an empiric example. They show that the great preponderance of economic growth in the US since 1947 involves the replication of existing technologies through investment in equipment, structures, and software and expansion of the labor force. Further, they show that innovation accounts for only about twenty percent of US economic growth. In

2575-485: Is the change in output from increasing the number of workers used by one person, or by adding one more machine to the production process in the short run. The law of diminishing marginal returns points out that as more units of a variable input are added to fixed amounts of land and capital, the change in total output would rise firstly and then fall. The length of time required for all the factor of production to be flexible varies from industry to industry. For example, in

2678-459: Is the field of engineering that designs and optimizes the manufacturing process , or the steps through which raw materials are transformed into a final product . The manufacturing process begins with the product design , and materials specification . These materials are then modified through manufacturing to become the desired product. Contemporary manufacturing encompasses all intermediary stages involved in producing and integrating components of

2781-493: The Bronze Age , bronze was a major improvement over stone as a material for making tools, both because of its mechanical properties like strength and ductility and because it could be cast in molds to make intricately shaped objects. Bronze significantly advanced shipbuilding technology with better tools and bronze nails, which replaced the old method of attaching boards of the hull with cord woven through drilled holes. The Iron Age

2884-417: The Hanover facilities could no longer be expanded. Fritz Beindorff, the owner of Pelikan at the time, was one of the sixteen initial signatories of the 1932 Industrielleneingabe , urging President Paul von Hindenburg to appoint Adolf Hitler as chancellor. During the war , both pen and ink production suffered, and the company produced paints, coatings, and other chemicals with military use. From 1942 on,

2987-594: The Oldowan " industry ", date back to at least 2.3 million years ago, with the earliest direct evidence of tool usage found in Ethiopia within the Great Rift Valley , dating back to 2.5 million years ago. To manufacture a stone tool, a " core " of hard stone with specific flaking properties (such as flint ) was struck with a hammerstone . This flaking produced sharp edges that could be used as tools, primarily in

3090-422: The 1830s. This transition included going from hand production methods to machines, new chemical manufacturing and iron production processes, the increasing use of steam power and water power , the development of machine tools and the rise of the mechanized factory system . The Industrial Revolution also led to an unprecedented rise in the rate of population growth. Textiles were the dominant industry of

3193-475: The 1890s after the introduction of the practical DC motor and the AC motor , was fastest between 1900 and 1930. This was aided by the establishment of electric utilities with central stations and the lowering of electricity prices from 1914 to 1917. Electric motors allowed more flexibility in manufacturing and required less maintenance than line shafts and belts. Many factories witnessed a 30% increase in output owing to

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3296-527: The 8th century. Papermaking technology was spread to Europe by the Umayyad conquest of Hispania . A paper mill was established in Sicily in the 12th century. In Europe the fiber to make pulp for making paper was obtained from linen and cotton rags. Lynn Townsend White Jr. credited the spinning wheel with increasing the supply of rags, which led to cheap paper, which was a factor in the development of printing. Due to

3399-635: The CEO of General Electric , called for the United States to increase its manufacturing base employment to 20% of the workforce, commenting that the U.S. has outsourced too much in some areas and can no longer rely on the financial sector and consumer spending to drive demand. Further, while U.S. manufacturing performs well compared to the rest of the U.S. economy, research shows that it performs poorly compared to manufacturing in other high-wage countries. A total of 3.2 million – one in six U.S. manufacturing jobs – have disappeared between 2000 and 2007. In

3502-500: The English word may have been independently formed from the earlier English manufacture ("made by human hands") and fracture . Its earliest usage in the English language was recorded in the mid-16th century to refer to the making of products by hand. Human ancestors manufactured objects using stone and other tools long before the emergence of Homo sapiens about 200,000 years ago. The earliest methods of stone tool making, known as

3605-545: The Industrial Revolution in terms of employment, value of output and capital invested. The textile industry was also the first to use modern production methods. Rapid industrialization first began in Britain, starting with mechanized spinning in the 1780s, with high rates of growth in steam power and iron production occurring after 1800. Mechanized textile production spread from Great Britain to continental Europe and

3708-600: The Mediterranean basin. Early construction techniques used by the Ancient Egyptians made use of bricks composed mainly of clay, sand, silt, and other minerals. The Middle Ages witnessed new inventions, innovations in the ways of managing traditional means of production, and economic growth. Papermaking , a 2nd-century Chinese technology, was carried to the Middle East when a group of Chinese papermakers were captured in

3811-488: The Pelikan Group GmbH . Nowadays, Pelikan manufactures a wide range of products including writing implements , art materials and office goods. The roots of the company can be traced back to 1838, when chemist Carl Hornemann founded a color and ink factory in Hanover , Germany . The date of the first price list of the company, 28 April, is set as the company's foundation date. In 1863, Guenther Wagner obtained

3914-671: The UK, EEF the manufacturers organisation has led calls for the UK economy to be rebalanced to rely less on financial services and has actively promoted the manufacturing agenda. According to the United Nations Industrial Development Organization (UNIDO), China is the top manufacturer worldwide by 2023 output, producing 28.7% of the total global manufacturing output, followed by the United States of America , Germany , Japan , and India . UNIDO also publishes

4017-617: The United States accounted for 10.70% of the total national output, employing 8.41% of the workforce. The total value of manufacturing output reached $ 2.5 trillion. In 2023, Germany's manufacturing output reached $ 844.93 billion, marking a 12.25% increase from 2022. The sector employed approximately 5.5 million people, accounting for around 20.8% of the workforce. These are the top 50 countries by total value of manufacturing output in U.S. dollars for its noted year according to World Bank : Production (economics) The production process and output directly result from productively utilising

4120-518: The United States in the early 19th century, with important centres of textiles, iron and coal emerging in Belgium and the United States and later textiles in France. An economic recession occurred from the late 1830s to the early 1840s when the adoption of the Industrial Revolution's early innovations, such as mechanized spinning and weaving, slowed down and their markets matured. Innovations developed late in

4223-427: The absolute measure, i.e. the real income and its derivatives as a criterion of production performance. Maximizing productivity also leads to the phenomenon called " jobless growth " This refers to economic growth as a result of productivity growth but without creation of new jobs and new incomes from them. A practical example illustrates the case. When a jobless person obtains a job in market production we may assume it

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4326-471: The average production performance, we use the known productivity ratio The absolute income of performance is obtained by subtracting the real input from the real output as follows: The growth of the real income is the increase of the economic value that can be distributed between the production stakeholders. With the aid of the production model we can perform the average and absolute accounting in one calculation. Maximizing production performance requires using

4429-445: The benefits of a product that creates it. Hazardous materials may expose workers to health risks. These costs are now well known and there is effort to address them by improving efficiency , reducing waste, using industrial symbiosis , and eliminating harmful chemicals. The negative costs of manufacturing can also be addressed legally. Developed countries regulate manufacturing activity with labor laws and environmental laws. Across

4532-425: The case of a single production process (described above) the output is defined as an economic value of products and services produced in the process. When we want to examine an entity of many production processes we have to sum up the value-added created in the single processes. This is done in order to avoid the double accounting of intermediate inputs. Value-added is obtained by subtracting the intermediate inputs from

4635-512: The casting of cannon, the blast furnace came into widespread use in France in the mid 15th century. The blast furnace had been used in China since the 4th century BC. The stocking frame , which was invented in 1598, increased a knitter's number of knots per minute from 100 to 1000. The Industrial Revolution was the transition to new manufacturing processes in Europe and the United States from 1760 to

4738-521: The company had expanded its plant, employing 39 additional people. When Fritz Beindorff took over the company, Pelikan added office products for copying, stamping, sticking and erasing. In 1896, Pelikan started to produce India ink , achieving great sales success. By 1913, the manufacturing were expanded, and 1057 workers were employed by Pelikan. In 1929, Pelikan produced its first fountain pen . Pelikan expanded its products to watercolor sets in 1931. The writing instruments products were moved to Peine as

4841-513: The company operated Gestapo labor education camps at their Hannover works, where forced labourers were employed. In 1978, Pelikan became a stock corporation, changing its legal form from a GmbH to an AG , with shares being divided within the Beindorff family and 46 other owners. Six years later, Pelikan was taken over by a Swiss company. The Hanover-based company was separated into various sub-companies and then sold. In 1996, Goodace SDN BHD,

4944-452: The components of growth: an increase of inputs and an increase of productivity. The portion of growth caused by the increase in inputs is shown on line 1 and does not change the relation between inputs and outputs. The portion of growth caused by an increase in productivity is shown on line 2 with a steeper slope. So increased productivity represents greater output per unit of input. The growth of production output does not reveal anything about

5047-568: The concept of "focus", with an implication that a business cannot perform at the highest level along all five dimensions and must therefore select one or two competitive priorities. This view led to the theory of "trade offs" in manufacturing strategy. Similarly, Elizabeth Haas wrote in 1987 about the delivery of value in manufacturing for customers in terms of "lower prices, greater service responsiveness or higher quality". The theory of "trade offs" has subsequently being debated and questioned, but Skinner wrote in 1992 that at that time "enthusiasm for

5150-567: The concept of production function. We can use mathematical formulae, which are typically used in macroeconomics (in growth accounting) or arithmetical models, which are typically used in microeconomics and management accounting. We do not present the former approach here but refer to the survey “Growth accounting” by Hulten 2009. Also see an extensive discussion of various production models and their estimations in Sickles and Zelenyuk (2019, Chapter 1-2). We use here arithmetical models because they are like

5253-451: The concepts of 'manufacturing strategy' [had] been higher", noting that in academic papers , executive courses and case studies , levels of interest were "bursting out all over". Manufacturing writer Terry Hill has commented that manufacturing is often seen as a less "strategic" business activity than functions such as marketing and finance , and that manufacturing managers have "come late" to business strategy-making discussions, where, as

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5356-413: The conclusion that the production functions of the company and its suppliers are in a state of continuous change. Producers Those participating in production, i.e., the labour force, society and owners, are collectively referred to as the producer community or producers. The producer community generates income from developing and growing production. The well-being gained through commodities stems from

5459-402: The form of choppers or scrapers . These tools greatly aided the early humans in their hunter-gatherer lifestyle to form other tools out of softer materials such as bone and wood. The Middle Paleolithic , approximately 300,000 years ago, saw the introduction of the prepared-core technique , where multiple blades could be rapidly formed from a single core stone. Pressure flaking , in which

5562-481: The globe, manufacturers can be subject to regulations and pollution taxes to offset the environmental costs of manufacturing activities . Labor unions and craft guilds have played a historic role in the negotiation of worker rights and wages. Environment laws and labor protections that are available in developed nations may not be available in the third world . Tort law and product liability impose additional costs on manufacturing. These are significant dynamics in

5665-601: The growth of the ancient civilizations, many ancient technologies resulted from advances in manufacturing. Several of the six classic simple machines were invented in Mesopotamia. Mesopotamians have been credited with the invention of the wheel. The wheel and axle mechanism first appeared with the potter's wheel , invented in Mesopotamia (modern Iraq) during the 5th millennium BC. Egyptian paper made from papyrus , as well as pottery , were mass-produced and exported throughout

5768-582: The increasing shift to electric motors. Electrification enabled modern mass production, and the biggest impact of early mass production was in the manufacturing of everyday items, such as at the Ball Brothers Glass Manufacturing Company , which electrified its mason jar plant in Muncie, Indiana , U.S. around 1900. The new automated process used glass blowing machines to replace 210 craftsman glass blowers and helpers. A small electric truck

5871-407: The industry in the United States and other countries. According to a "traditional" view of manufacturing strategy, there are five key dimensions along which the performance of manufacturing can be assessed: cost, quality , dependability , flexibility and innovation . In regard to manufacturing performance, Wickham Skinner , who has been called "the father of manufacturing strategy ", adopted

5974-405: The large-scale manufacture of machine tools and the use of increasingly advanced machinery in steam-powered factories. Building on improvements in vacuum pumps and materials research, incandescent light bulbs became practical for general use in the late 1870s. This invention had a profound effect on the workplace because factories could now have second and third shift workers. Shoe production

6077-404: The logic of the production function. Two components can also be distinguished in the income change: the income growth caused by an increase in production input (production volume) and the income growth caused by an increase in productivity. The income growth caused by increased production volume is determined by moving along the production function graph. The income growth corresponding to a shift of

6180-402: The manufacturing industries like motor vehicles. In the tertiary industry such as service or knowledge industries, it is harder to measure the outputs since they are less tangible. The second way of measuring production and efficiency is average output. It measures output per-worker-employed or output-per-unit of capital. The third measures of production and efficiency is the marginal product. It

6283-704: The market towards end customers . This relative cost reduction towards the market, is how manufacturing firms secure their profit margins . Manufacturing has unique health and safety challenges and has been recognized by the National Institute for Occupational Safety and Health (NIOSH) as a priority industry sector in the National Occupational Research Agenda (NORA) to identify and provide intervention strategies regarding occupational health and safety issues. Surveys and analyses of trends and issues in manufacturing and investment around

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6386-402: The maximum potential output divided by the actual input. An example of the efficiency calculation is that if the applied inputs have the potential to produce 100 units but are producing 60 units, the efficiency of the output is 0.6, or 60%. Furthermore, economies of scale identify the point at which production efficiency (returns) can be increased, decrease or remain constant. This element sees

6489-507: The models of management accounting, illustrative and easily understood and applied in practice. Furthermore, they are integrated to management accounting, which is a practical advantage. A major advantage of the arithmetical model is its capability to depict production function as a part of production process. Consequently, production function can be understood, measured, and examined as a part of production process. There are different production models according to different interests. Here we use

6592-423: The nuclear power industry, it takes many years to commission new nuclear power plant and capacity. Real-life examples of the firm's short - term production equations may not be quite the same as the smooth production theory of the department. In order to improve efficiency and promote the structural transformation of economic growth, it is most important to establish the industrial development model related to it. At

6695-410: The ongoing adaption of technology at the frontier of the production function. Technological change is a significant determinant in advancing economic production results, as noted throughout economic histories, such as the industrial revolution. Therefore, it is critical to continue to monitor its effects on production and promote the development of new technologies. There is a strong correlation between

6798-423: The ongoing process, occurring over the last few decades, of manufacture-based industries relocating operations to "developing-world" economies where the costs of production are significantly lower than in "developed-world" economies. From a financial perspective, the goal of the manufacturing industry is mainly to achieve cost benefits per unit produced, which in turn leads to cost reductions in product prices for

6901-496: The original inputs (or factors of production ). Known as primary producer goods or services, land, labour, and capital are deemed the three fundamental factors of production . These primary inputs are not significantly altered in the output process, nor do they become a whole component in the product. Under classical economics , materials and energy are categorised as secondary factors as they are byproducts of land, labour and capital. Delving further, primary factors encompass all of

7004-468: The output of a product. The production function assesses the relationship between the inputs and the quantity of output. Economic welfare is created in a production process, meaning all economic activities that aim directly or indirectly to satisfy human wants and needs . The degree to which the needs are satisfied is often accepted as a measure of economic welfare. In production there are two features which explain increasing economic welfare. The first

7107-470: The outputs. The most well-known and used measure of value-added is the GDP (Gross Domestic Product). It is widely used as a measure of the economic growth of nations and industries. The production performance can be measured as an average or an absolute income. Expressing performance both in average (avg.) and absolute (abs.) quantities is helpful for understanding the welfare effects of production. For measurement of

7210-421: The past Pelikan have also manufactured playing cards . Manufacturing company Manufacturing is the creation or production of goods with the help of equipment, labor , machines , tools , and chemical or biological processing or formulation . It is the essence of the secondary sector of the economy . The term may refer to a range of human activity , from handicraft to high-tech , but it

7313-401: The performance of the production process. The performance of production measures production's ability to generate income. Because the income from production is generated in the real process, we call it the real income. Similarly, as the production function is an expression of the real process, we could also call it "income generated by the production function". The real income generation follows

7416-615: The period, such as the increasing adoption of locomotives, steamboats and steamships, hot blast iron smelting and new technologies, such as the electrical telegraph , were widely introduced in the 1840s and 1850s, were not powerful enough to drive high rates of growth. Rapid economic growth began to occur after 1870, springing from a new group of innovations in what has been called the Second Industrial Revolution . These innovations included new steel making processes , mass-production , assembly lines , electrical grid systems,

7519-474: The position of chemist and plant manager. He took over the company in 1871. Wagner also designed the company's first logo (taking the figure of a pelican from his own familiar coat of arms) in 1878, becoming also one of the first German trademarks ever. The company expanded its range of distribution to Austria , Italy , Czech Republic , Hungary and Croatia , then establishing a new factory in Vienna . By 1881

7622-479: The price-quality relations of the commodities. Due to competition and development in the market, the price-quality relations of commodities tend to improve over time. Typically the quality of a commodity goes up and the price goes down over time. This development favourably affects the production functions of customers. Customers get more for less. Consumer customers get more satisfaction at less cost. This type of well-being generation can only partially be calculated from

7725-484: The producer imply surplus value to the consumer, and on the basis of the market price this value is shared by the consumer and the producer in the marketplace. This is the mechanism through which surplus value originates to the consumer and the producer likewise. Surplus values to customers cannot be measured from any production data. Instead the surplus value to a producer can be measured. It can be expressed both in terms of nominal and real values. The real surplus value to

7828-450: The producer is an outcome of the real process, real income, and measured proportionally it means productivity. The concept "real process" in the meaning quantitative structure of production process was introduced in Finnish management accounting in the 1960s. Since then it has been a cornerstone in the Finnish management accounting theory. (Riistama et al. 1971) Income distribution process of

7931-530: The producer lower producer income, to be compensated with higher sales volume. Economic well-being also increases due to income gains from increasing production. Market production is the only production form that creates and distributes incomes to stakeholders. Public production and household production are financed by the incomes generated in market production. Thus market production has a double role: creating well-being and producing goods and services and income creation. Because of this double role, market production

8034-470: The producer's behaviour and the underlying assumption of production – both assume profit maximising behaviour. Production can be either increased, decreased or remain constant as a result of consumption, amongst various other factors. The relationship between production and consumption is mirror against the economic theory of supply and demand . Accordingly, when production decreases more than factor consumption, this results in reduced productivity. Contrarily,

8137-432: The producers and suppliers to the producers. The customers' well-being arises from the commodities they are buying and the suppliers' well-being is related to the income they receive as compensation for the production inputs they have delivered to the producers. Stakeholders of production are persons, groups or organizations with an interest in a producing company. Economic well-being originates in efficient production and it

8240-410: The producing community. Similarly, the high income level achieved in the community is a result of the high volume of production and its good performance. This type of well-being generation – as mentioned earlier - can be reliably calculated from the production data. A producing company can be divided into sub-processes in different ways; yet, the following five are identified as main processes, each with

8343-459: The production data. The situation is presented in this study. The producer community (labour force, society, and owners) earns income as compensation for the inputs they have delivered to the production. When the production grows and becomes more efficient, the income tends to increase. In production this brings about an increased ability to pay salaries, taxes and profits. The growth of production and improved productivity generate additional income for

8446-517: The production flow and some had special carriages for rolling heavy items into machining positions. Production of the Ford Model T used 32,000 machine tools. Lean manufacturing , also known as just-in-time manufacturing, was developed in Japan in the 1930s. It is a production method aimed primarily at reducing times within the production system as well as response times from suppliers and to customers. It

8549-416: The production function is generated by the increase in productivity. The change of real income so signifies a move from the point 1 to the point 2 on the production function (above). When we want to maximize the production performance we have to maximize the income generated by the production function. The sources of productivity growth and production volume growth are explained as follows. Productivity growth

8652-399: The production function. If we are on the part of “increasing returns” on the production function, the combination of production volume increase and total productivity increase leads to improved production performance. Unfortunately, we do not know in practice on which part of the production function we are. Therefore, a correct interpretation of a performance change is obtained only by measuring

8755-402: The production output from input, and it can be described by means of the production function . It refers to a series of events in production in which production inputs of different quality and quantity are combined into products of different quality and quantity. Products can be physical goods, immaterial services and most often combinations of both. The characteristics created into the product by

8858-513: The production refers to a series of events in which the unit prices of constant-quality products and inputs alter causing a change in income distribution among those participating in the exchange. The magnitude of the change in income distribution is directly proportionate to the change in prices of the output and inputs and to their quantities. Productivity gains are distributed, for example, to customers as lower product sales prices or to staff as higher income pay. The production process consists of

8961-772: The public sector. Each of them has their individual production functions. Due to competition, the price-quality-ratios of commodities tend to improve and this brings the benefits of better productivity to customers. Customers get more for less. In households and the public sector this means that more need satisfaction is achieved at less cost. For this reason, the productivity of customers can increase over time even though their incomes remain unchanged. Suppliers The suppliers of companies are typically producers of materials, energy, capital, and services. They all have their individual production functions. The changes in prices or qualities of supplied commodities have an effect on both actors' (company and suppliers) production functions. We come to

9064-492: The quality requirements for the production data used in productivity accounting. The most important criterion of good measurement is the homogenous quality of the measurement object. If the object is not homogenous, then the measurement result may include changes in both quantity and quality but their respective shares will remain unclear. In productivity accounting this criterion requires that every item of output and input must appear in accounting as being homogenous. In other words,

9167-408: The real income change. In the short run, the production function assumes there is at least one fixed factor input. The production function relates the quantity of factor inputs used by a business to the amount of output that result. There are three measure of production and productivity. The first one is total output (total product). It is straightforward to measure how much output is being produced in

9270-480: The real inputs. The real process can be described by means of the production function. The production function is a graphical or mathematical expression showing the relationship between the inputs used in production and the output achieved. Both graphical and mathematical expressions are presented and demonstrated. The production function is a simple description of the mechanism of income generation in production process. It consists of two components. These components are

9373-423: The real process and income distribution process occur simultaneously, and only the production process is identifiable and measurable by the traditional accounting practices. The real process and income distribution process can be identified and measured by extra calculation, and this is why they need to be analyzed separately in order to understand the logic of production and its performance. Real process generates

9476-409: The real process and the income distribution process. A result and a criterion of success of the owner is profitability. The profitability of production is the share of the real process result the owner has been able to keep to himself in the income distribution process. Factors describing the production process are the components of profitability , i.e., returns and costs. They differ from the factors of

9579-403: The real process in that the components of profitability are given at nominal prices whereas in the real process the factors are at periodically fixed prices. Monetary process refers to events related to financing the business. Market value process refers to a series of events in which investors determine the market value of the company in the investment markets. Economic growth may be defined as

9682-434: The resourcing involved, such as land, which includes the natural resources above and below the soil. However, there is a difference between human capital and labour. In addition to the common factors of production, in different economic schools of thought, entrepreneurship and technology are sometimes considered evolved factors in production. It is common practice that several forms of controllable inputs are used to achieve

9785-423: The same time, a shift should be made to models that contain typical characteristics of the industry, such as specific technological changes and significant differences in the likelihood of substitution before and after investment. A production model is a numerical description of the production process and is based on the prices and the quantities of inputs and outputs. There are two main approaches to operationalize

9888-402: The surplus value is positive, the owner's profit expectation has been surpassed. The table presents a surplus value calculation. We call this set of production data a basic example and we use the data through the article in illustrative production models. The basic example is a simplified profitability calculation used for illustration and modelling. Even as reduced, it comprises all phenomena of

9991-437: The then-well-known technique of chain or sequential production. Ford also bought or designed and built special purpose machine tools and fixtures such as multiple spindle drill presses that could drill every hole on one side of an engine block in one operation and a multiple head milling machine that could simultaneously machine 15 engine blocks held on a single fixture. All of these machine tools were arranged systematically in

10094-527: The time of the acquisition, Herlitz's production facilities were located in the town of Falkensee , Brandenburg , with other plants in Poland , Romania and Great Britain . Herlitz's logistics supplied approx. 8,000 distribution centres in Germany directly, with another 3,000 customers throughout Europe. The company had 1,335 employees, 1,100 of which were in Germany. Current products manufactured by Pelikan are: In

10197-540: The well-being of individuals. The satisfaction of needs originates from the use of the commodities which are produced. The need satisfaction increases when the quality-price-ratio of the commodities improves and more satisfaction is achieved at less cost. Improving the quality-price-ratio of commodities is to a producer an essential way to improve the competitiveness of products but this kind of gains distributed to customers cannot be measured with production data. Improving product competitiveness often means lower prices and to

10300-431: The world focus on such things as: In addition to general overviews, researchers have examined the features and factors affecting particular key aspects of manufacturing development. They have compared production and investment in a range of Western and non-Western countries and presented case studies of growth and performance in important individual industries and market-economic sectors. On June 26, 2009, Jeff Immelt ,

10403-833: Was introduced in Australia in the 1950s by the British Motor Corporation (Australia) at its Victoria Park plant in Sydney, from where the idea later migrated to Toyota. News spread to western countries from Japan in 1977 in two English-language articles: one referred to the methodology as the "Ohno system", after Taiichi Ohno , who was instrumental in its development within Toyota. The other article, by Toyota authors in an international journal, provided additional details. Finally, those and other publicity were translated into implementations, beginning in 1980 and then quickly multiplying throughout

10506-476: Was mechanized during the mid 19th century. Mass production of sewing machines and agricultural machinery such as reapers occurred in the mid to late 19th century. The mass production of bicycles started in the 1880s. Steam-powered factories became widespread, although the conversion from water power to steam occurred in England earlier than in the U.S. Electrification of factories, which had begun gradually in

10609-483: Was now used to handle 150 dozen bottles at a time whereas previously used hand trucks could only carry 6 dozen bottles at a time. Electric mixers replaced men with shovels handling sand and other ingredients that were fed into the glass furnace. An electric overhead crane replaced 36 day laborers for moving heavy loads across the factory. Mass production was popularized in the late 1910s and 1920s by Henry Ford 's Ford Motor Company , which introduced electric motors to

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