Production is human activity geared toward the creation of goods and services to satisfy needs and wants. Simply put, production is the making of goods and services to satisfy man’s needs and wants. A need is something one must have in order to survive, a want is a desire, but it is not necessary for survival. A good is an item that can be touched and seen, a service is intangible (you can not touch a service but it may still be needed or wanted eg. medical service).

There are three forms or stages of production: Primary, Secondary & Tertiary production.

Primary Production includes the extractive industries which are those industries involved with the collection raw material. Raw materials are those natural substances that have never been processed eg. dirt, stone, diamonds, coals, crude oil, trees, water, milk, fish etc.

Secondary Production involves processing or making raw materials into finished or semi-finished goods. Secondary Production includes the Manufacturing industries (which includes factories etc that make goods) and the Constructive industries (which build things such as houses, bridges, roads etc.)

Tertiary Production involves services, both direct and commercial. A Direct Service is a service provided directly to an individual and does not involve the buying and selling of a good or service. For example, Medical service, teaching, most lawyer services, landscaping etc. A Commercial Service or Commerce are those services that involve buying and selling as well as the services that assist buying and selling such as insurance of goods, banking services, warehousing, transport, advertising services etc.