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Materials, Manpower, Machinery, Methods, Money

5Ms representing

Input-Process-Output (IPO)

Under the systems approach the structure of production is understood as an arrangement of relationships between inputs and outputs. There are three major components in this production relationship: ___

Materials

are semi processed goods that will be subjected to further transformation in the production process. They are also called raw materials.

Locational transformation

arises when a product changes its location through various means of transportation and communication.

Method

denotes the process of combining raw materials and how these are going to be transformed using the other factor inputs of production. This resource in put is also called technology or techniques of production since it prescribes the intensity of the use of factor inputs.

Extractive transformation

happens when a natural resource is taken out from its habitat.

Information transformation

happens when knowledge and specialized skills of providers are transmitted to their customers.

Money

is a financial resource used to purchase all the resources needed by the business for its operations. Thus the owner(s) of the company contribute seed money for the initial operations of the business.

Operations Management

is concerned with the design, management, and improvement of the systems that create the organization's goods or services.

Manpower

is the human resource input used in the production process. Manpower does not only include labor or muscular power but also, intellectual, creative abilities and other qualities of individuals that can contribute to the production.

Physical transformation

occurs when the processing of raw materials convert them into significantly new product.

Machinery

represents all man-made physical capital used in the production process. Aside from machines, the tools, durable equipment, and the physical plan are also included.

Exchange transformation

takes place when a commodity is transmitted from the supplier to its buyer.


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