End product
In business administration, the end product is a market-ready product or service that is manufactured by a company and which is intended for further processing , consumption or investment . Opposites are semi-finished and intermediate products .
General
The vertical range of manufacture in companies around the world is seldom so extensive that all stages of production up to the end product are available in one company . The division of labor means that at least two companies are involved, so that there are also at least two production stages. These are stages of production that help increase the degree of completion of products. The degree of completion is to be understood as the processing status of a product at a specific point in time.
The degree of completion of a product is not always decisive for whether a product is considered a semi-finished product or an end product. Rather, the use of products by the purchaser plays a role. For companies as buyers, it depends on whether they procure products for the purpose of further processing (purchase of car tires for automobile manufacture ), consume for their own purposes (purchase of food for the canteen of an automobile manufacturer) or for investments (purchase of office furniture by a Automobile manufacturers). This also applies correspondingly to the consumer : flour bought by him in the supermarket is an end product, while flour bought and processed by a baker is an intermediate product.
Demarcation
From the point of view of the manufacturer of semi-finished products, these are regarded as end products, even if they are acquired and processed by another company. For the acquiring company, however, they are considered semi-finished products. Edmund Heinen pointed out that under certain circumstances intermediate products can also be sold on the market and are not necessarily or exclusively used to manufacture our own end products. For this reason, a certain production stage in a company can simultaneously be the “final stage” (sale of semi-finished products) and “preliminary stage” in their further processing.
Economics
In economics , when calculating the gross domestic product (GDP) and gross national product (GNP) it is important that the end products are only aggregated and that the intermediate products are eliminated in order to avoid double entries. Gross domestic product and gross national product are therefore key figures that relate to the end products valued at market prices . The total price of a car should not also include the value of the tires that were sold to the car manufacturer in the GDP / GNP. Double counting is avoided by only counting the added value created at each production stage in relation to GDP / GNP.
See also
Web links
Individual evidence
- ↑ Gerd Rainer Wagner: Degree of completion and industrial supply elasticity. 1981, p. 23.
- ↑ Edmund Heinen, Betriebswirtschaftliche Kostenlehre , 1978, p. 276
- ↑ Gustav Dieckheuer, Macroeconomics: Theory and Politics , 1993, p. 3
- ↑ Rüdiger Dornbusch / Stanley Fischer / Richard Startz, Macroeconomics , 2003, p. 39