A firm makes a number of important production decisions. Some of the decision may involve;
- What to produce
- How production is to take place e.g. what raw materials and machinery should be utilized
- Where a production plant should be located
- When to produce
- The scale of production e.g. how big should the factory
- When and where to invest
- How the production can be improved and controlled
- What type of business activity to engage in
NOTE: One production decision may lead to a series of decisions requiring to be made e.g.
-for a firm to decide on what goods and services to produce, market research to evaluate the likely success of the product is necessary.
-after establishing the viability of the product in the market, other activities like product design are carried out (the firm may consider redesigning existing products, introducing a product similar to the one in the market or developing a completely new product.
-production may then follow