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Production Function: Meaning and Types

The document discusses the responsibilities of a production manager, which include production planning and control, quality control, methods analysis, inventory control, plant layout, work measurement, and other functions like cost control and providing wage incentives to ensure efficient production and meet targets. A production manager oversees all aspects of the production process from planning what and how much to produce, to quality control and inventory management, to analyzing production methods and measuring worker performance.

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Rashmi Kanungo
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208 views

Production Function: Meaning and Types

The document discusses the responsibilities of a production manager, which include production planning and control, quality control, methods analysis, inventory control, plant layout, work measurement, and other functions like cost control and providing wage incentives to ensure efficient production and meet targets. A production manager oversees all aspects of the production process from planning what and how much to produce, to quality control and inventory management, to analyzing production methods and measuring worker performance.

Uploaded by

Rashmi Kanungo
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Production Function: Meaning

and Types
Production is a process whereby some goods and services, called
inputs are transformed into other goods and services called output.
The production function refers to the relationship between the input of
factor services and the output of the resultant product. The production
function is based on the idea that the amount of output in a
production process depends upon the amount of inputs used in the
process.

Output depends upon an input or a set of inputs in such a way that


there is one unique amount of output resulting from each set of inputs.
This unique relationship between output and inputs is termed as
production function.

Halcrow defines production function as follows:


“Production function is the technical relationship between
inputs & output indicating the amount of output that can be
produced with each and every set or combination of the
specified inputs”. A production function always assumes as given, a
state of knowledge and technology.
A production function may be expressed in three forms:
(a) It can be expressed in the form of an arithmetic table where first
few columns show the input of the factors and the last column shows
total output of the product as has been depicted below. Here, for the
sake of simplicity, we take only one input.)
In the above table, fertilizer is the variable input (applied to a fixed
price of land with other fixed inputs). Total corn yield is increasing
(column 2) as more units of fertilizers are applied.

(b) The production function can also be illustrated geometrically by


means of a simple graph as shown in Fig. 1. Input level is measured
along the horizontal axis and the total output upon he vertical axis.

The points on the curve OT indicate different quantities of output


associated with particular levels of the input used.

 The production function may be shown through an algebraic


expression in which output is a dependent variable and input, the
independent variable.
In algebraic form, it can be expressed as:
Y =f(x),

where Y represents the output, x, the input and ‘f’ means is a function
of, or ‘depends upon, or is determined by’. Here, it is assumed that
output depends upon a single factor. However, it must be understood
that in actual life, agricultural output (and for that matter, any output)
is never a function of a single factor. It rather depends upon a variety
of factors, such as seeds, amount of fertilizers used, irrigation, nature
of soil and so on. This can be written as:

Y = f (x1, x2, x3………………….. xn) + u


This function means that output depends upon all factors represented
by x1, x2 etc., and also the level of unknown or uncontrollable factors
represented by u. It is not feasible to consider all controllable factors
simultaneously in any one study.
Therefore, each factor may be studied in combination with some
factors considered as fixed. For illustration, a farmers may be
interested in knowing how the output of wheat will change as the two
inputs namely, the seeds and fertilizers are changed while other
factors are held constant at fixed levels.

Types of Production Function:


We should note that a production function expresses a unique
relationship between total output and the various inputs. Generally,
the total output increases with an increase in inputs. Like any other
function, all such functions where total output increase as the inputs
increase, are known as increasing production functions,

There are also situations in the real world where an increase in inputs,
instead of bringing about an increase in the total output, may decrease
it. Such a production function will be known as decreasing production
function.
Production Manager
Some of the major responsibilities of a production manager are: (1)
Production planning (2) Production control (3) Quality control (4)
Method analysis (5) Inventory control (6) Plant layout (7) Work
measurement and (8) Other functions:

(1) Production planning:
Production planning is the first function performed by the production
manager.

Production planning is concerned with thinking in advance what is to


be produced, how it is to be produced and by what time should it be
produced. It is concerned with deciding about the production targets
to be achieved by keeping in view the sales forecasts.

(2) Production control:
Production planning cannot be properly achieved without an effective
system of production control. It is in fact concerned with successful
implementation of production planning. It aims at completing
production well in time and also with lesser costs. A proper system of
production control ensures continuous production, lesser work-in-
progress and minimisation of wastages.

(3) Quality control:
The production manager is also concerned with maintaining required
quality of the product. Quality control is concerned with controlling
the negative variables which affect the ultimate quality of a product. It
is concerned with use of all the ways and means where by quality
standards could be maintained.

(4) Method analysis:
There are many alternative methods for manufacturing a product.
Some methods are more economical than others. The production
manager should study all the methods in detail by analysing them in
detail and select the best alternative out of them. The process of
selecting the best alternative is known as methods of analysis.

Methods of analysis are considerably helpful in minimising the cost of


production and improving productivity of the concern.

(5) Inventory control:
The next important function to be carried by a production manager is
to exercise proper control over the inventory. He should determine
economic order size, maximum, minimum, average and danger levels
of materials so that problems of overstocking and understocking do
not arise. This also helps in minimising wastages of materials.

(6) Plant layout:
Plant layout is primarily concerned with the internal set up of an
enterprise in a proper manner. It is related to orderly and proper
arrangement and use of available resources viz., men, money,
machines, materials and methods of production inside the factory. In
other words it is concerned with maximum and effective utilisation of
available resources at minimum operating costs.
(7) Work measurement:
Work measurement methods are concerned with measuring the level
of performance of work by a worker. Time and motion studies
techniques can be used for work measurement. If a worker works
below the level fixed by work-measurement techniques, his
performance must be improved through positive or negative
incentives.

(8) Other functions:
Apart from the above-mentioned functions, the production
Department also carries certain other functions viz., cost
control, standardization and storage, price analysis and
provision of wage incentives to workers etc.

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