Types of production systems

Households own all the economic resources in the economy. The economic resources are land, labor, capital, and entrepreneurial ability.

There are several different methods of producing goods and services.

• Job production. Involves the production of single, individual items.
• Batch production. Means the production of batches of similar products.
• Flow production.
• Mass production.

• There are three common types of basic production systems: the batch system, the continuous system, and the project system.
• In the continuous system, items to be processed flow through a series of steps, or operations, that are common to most other products being processed.

In general, there are three types of production: mass production, mass customization, and customization. In addition to production type, operations managers also classify production processes in two ways: (1) how inputs are converted into outputs and (2) the timing of the process.

The process of converting raw material into finished goods is called production cycle.

The time during which stocks (raw materials, materials, semi-finished and finished parts) remain in the production process, from the start of processing to the finished product, is known as the production cycle. It consists of processing and pausing phases and represents a part of the production time.

The four basic activities in the production cycle are: (1) product design; (2) planning and scheduling; (3) production operations; and (4) cost accounting.

Retained earnings is the amount of net income that a corporation or business keeps as opposed to being paid to shareholders as dividends. An example of retained earnings is when a corporation keeps of 60% of the net income and distributes the remaining 40% to the shareholders through dividends.

A debenture is a medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest.

A debenture is a bond issued with no collateral. Instead, investors rely upon the general creditworthiness and reputation of the issuing entity to obtain a return of their investment plus interest income. Examples of debentures are Treasury bonds and Treasury bills.

A debenture is a type of debt instrument that is not backed by any collateral and usually has a term greater than 10 years. Debentures are backed only by the creditworthiness and reputation of the issuer. Both corporations and governments frequently issue debentures to raise capital or funds.

Solution. Debenture holders are the creditors of the company.

A debenture is a way that larger, public limited companies might borrow money at a fixed rate of interest. The company borrows money from the lender, who’s then called a “debenture holder”. Unlike shareholders, debenture holders can’t vote at companies’ general meetings.