production

Production is the process of transforming inputs into outputs, comprising goods or services. In economics, production uses factors of production—land, labor, capital, and entrepreneurship—combined with technology to create value. Outputs may be tangible products, such as machines or food, or intangible services, such as repairs or software.

A production function describes the relationship between inputs and the maximum feasible output, given current technology. It reflects efficiency and returns to scale. Productivity measures output per unit of input, and total factor productivity captures improvements from technology and organizational practices.

Production systems describe how goods and services are created. Common systems include job production (custom work), batch production (groups of items), and mass or flow production (continuous, high-volume). Continuous production operates with little interruption. Production planning and control coordinate inputs, processes, scheduling, capacity, quality assurance, and inventory management, including approaches such as just-in-time and lean manufacturing.

Industries span manufacturing, agriculture, and services. Service production emphasizes intangibles, customer interaction, and knowledge work. Advances in automation, digitalization, and data analytics influence efficiency and cost structures. Firms seek economies of scale and economies of scope, balancing capital intensity, labor skills, and flexibility.

Environmental and social considerations shape modern production, with emphasis on resource efficiency, waste reduction, emissions control, and responsible sourcing. In macroeconomics, production contributes to measures such as gross domestic product and capacity utilization. Beyond industry, the term production also appears in creative contexts, such as film or event production, referring to the planning and execution of a project.