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“Production, the market and economics”
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“Production, the market and economics”

Some believe that the cause of economic contraction in an economy is negative economic shock such as war or drought, writes Samasi Anderson, 20, a Correspondent from Bayelsa State in Nigeria, who argues the cause can also be related to inadequate management of production and markets.

Adequate management of an economy is conscientious of economic history facts, the economic reality of the present and the imaginative possibilities of future economic activities.

The maintenance of an excellent positive relationship among economic history facts, present economic reality and imaginative possibilities of future economic activities all contribute to adequate management of an economy.

Activation of an economy depends on the availability of raw materials and population, or market. Sagacious management of production and market results in the extinction of economic contraction, in a vicinity of either negative or positive economic shocks.

Management of production requires taking excellent management of the provision raw materials, the processing of those raw materials, and the transfer of finished products to market. Let’s look at each step:

Provision of raw materials means management of raw materials to make available the materials needed for the present and future use. The available raw materials for succeeding years is not to be used, but annually the economy managers must make it available for the annual demand. For instance, if an annual demand of cocoa is 3,000 tons in an economy, the managers of the economy makes available 3,000 tons and an addition of 3,000 tons multiplied by ten. And on annual basis 3,000 tons is made available by the managers of the economy without touching the additional tons (3,000 tons multiplied by 10).

Processing of raw materials is the central phase of production. This involves the conversion of raw materials to finished products. The coordination of the components, that is, the workforce and other non-human components, involved in the conversion is its management.

The transfer of finished products to market involves marketing strategy.

There are two markets in every economy; the local market and the foreign market. Market management is knowing the quality and quantity of goods and services produced in an economy demanded by the population (market) in the economy and the demand outside the economy, annually. Market management involves a constant review of population (market) in an economy and the flow of money in the economy.

Economic managers in an economy should know the quality and quantity of goods and services demanded by its population based on facts. And the flow of money should be constantly checked through goods and services price hikes and reductions, increases and reductions of wages, and increases and reductions of interest rate. For instance, when prices of goods and services are high, people spend less and save more, at this point, due to less spending, the flow of money is reduced. And if there is deficiency in the flow of money in an economy, price reduction of goods and services will definitely increase the flow of money. Managers must also monitor reduction and increase of wages and increase and reduction of interest rates.

Simultaneous management of production and market involves the production of goods and services in accordance with the local and foreign markets’ demand. The production goods and services in an economy proportional to the population demand in the economy and demand of foreign market balances supply and demand. In this scenario, there will be no oversupply and no under supply.

Sagacious management of production and market creates an excellent relationship between market and production, no oversupply, no over demand, no under supply and no under demand; it is a win-win game for market and production which translates to an extinction of economic contraction.

Reach me on Twitter: @samasirock
photo credit: MikeBlogs SupplyDemandTriangleExtras.jpg via photopin (license)
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About me: Everything about me is how to create better society, replacing each and every theory that has not worked for us. I am searching for how to reform the structure of things in Africa for the better.

I am so interested in getting new ideas in economics and politics, and want to meet people who think critically. I write only because I have an idea or a theory that I believe will put society in a better place.

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Opinions expressed in this article are those of the author and do not necessarily represent the views of the Commonwealth Youth Programme. Articles are published in a spirit of dialogue, respect and understanding. If you disagree, why not submit a response?
To learn more about becoming a Commonwealth Correspondent please visit: http://www.yourcommonwealth.org/submit-articles/

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