Topic 1 of 7 · Form 3
Production, specialisation and the chain of distribution
Satisfying human wants through primary, secondary and tertiary production; direct and indirect services; commerce as trade plus aids to trade.
Notes for this topic 1 file, in order
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Production
Satisfying human wants through primary, secondary and tertiary production; direct and indirect services; commerce as trade plus aids to trade.
Specialisation and exchange
Division of labour; advantages (efficiency, skills, output) and disadvantages (boredom, dependence); the need for exchange and money.
The chain of distribution
Manufacturer → wholesaler → retailer → consumer; shorter chains (manufacturer → retailer, manufacturer → consumer through direct selling or e-commerce); reasons for each channel.
Aids to trade
Banking, insurance, transport, communication, warehousing and advertising – each overcoming a barrier between producers and consumers (finance, risk, distance, distance in information, time, ignorance).
Worked example: Match the barrier of time to an aid to trade.
Warehousing – storing goods until they are needed.
Check yourself
- Which aid to trade overcomes the barrier of risk?
- Give one disadvantage of the division of labour.
- Name the stages of the traditional chain of distribution.
Show answers
- Insurance.
- Any one: boredom, loss of craft skills, dependence on others, unemployment if a stage is mechanised.
- Manufacturer, wholesaler, retailer, consumer.
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