Category: Commerce Notes PPT

To satisfy unlimited wants people purchase goods and services at a given price. But what to do in the case if the goods and services bought are found to be in bad quality or overcharged or measured less in quantity etc. In such situations. the consumers, instead of getting satisfaction, often feel cheated by the sellers who have sold the goods and services. Here, consumer awareness plays a significant role.

Consumer awareness is nothing but an act of making sure the buyer or consumers are aware of the information about products, goods, services, and consumer’s rights. Consumer awareness is important so that buyers can make the right decision and make the right choice at the right time. In this article, we will discuss consumer awareness, and consumer rights in detail.

Why There is a Need for Consumer Awareness?

The need for educating consumers about product quality and product price is significant and should not be ignored. The advancement of technology and emergence of sophisticated gadgets in the market and aggressive marketing strategies in the era of globalization has not only given a wide choice to consumers but also do not defend them with a plenitude of problems associated with such rapid changes.

There is an urgent and increasing necessity to educate and motivate the consumer to be attentive about the product’s quality, and also the possible deficiencies in the services of the growing sector of public utilities.

In short, the consumer should be educated with respect to his rights as a consumer. He should be educated enough so that he is able to protect himself from any wrongful act on the part of the trader. In order to help consumers to be in such a state, there is a need to provide reliable and exhaustive information, which they can access without much effort and expense. Considering these issues, the Government of India and the State Government have made an effort to introduce a dispute redressal mechanism by means of the Consumer Protection Act. Apart from this, a lot more has to be done in the area of creating awareness. A suitable remedy should be suggested wherever there is a need. This becomes more significant in the rural areas, where there is widespread illiteracy.

Let us now discuss six different types of consumer rights which help consumers to protect themselves from any scams or fraud.

Six Consumer Rights: Everyone should be aware of

Right to Safety

Right to safety is a basic right that helps consumers to be protected against the marketing of such goods and services which are hazardous to life and property. Consumption of goods or services which are not up to the mark can have adverse effects on the consumer’s health and safety. In order to protect the consumer’s interest, they have a right to receive high- quality and reliable goods. For instance- Household goods like LPG cylinders if not sealed properly can cause immense damage to life and property, Stale food items can cause harm to buyer’s health, Low-quality cosmetics can cause similar harms.

Right to Be Informed

The consumer has a right to receive information about the quality, quantity, potency, standard, and price of the goods or services.This will not merely help him to make well- informed and thought decisions but also prevent himself from falling prey to high-pressure selling techniques. The right to information is used to shield consumers from deceptive advertising, misleading labels and packaging, high prices, etc.

Right to Choose

This right permits consumers to choose among a wide variety of goods and services without being forced to do so. In case of monopolies, the right to be assured of satisfactory goods and services at fair and reasonably priced.   It also includes the right to basic goods and services. The right to choose can be better employed in a competitive market where a wide range of goods and services are available at a competitive price.

Right to Be Heard

The above three rights are useless if there is no proper authority to listen to customer grievances. If a buyer is dissatisfied with the product or service, then one has the right to file a complaint against it in a consumer court and it has to be addressed within a set time frame. For instance, if a consumer buys an electronic Item and it starts malfunctioning, a consumer has all rights to take appropriate action by returning or replacing it. 

Right to Seek Redressal

This right states that If a consumer is not satisfied with a particular purchase, he has the right to get the product replaced, or even he can demand a refund for the product. The consumer may even ask for compensation in case a product or service causes severe harm to them.

Right to Customer Education

A consumer must be aware of his rights and responsibilities provided by the authorities regarding marketing practices. The consumer has all the authority to gain knowledge about his rights as a buyer. Lack of Consumer awareness is the most important issue our government should pay heed to resolve.

What is the Responsibility of a Consumer?

The consumer has a certain responsibility to perform as an aware consumer can bring changes in the society and would help other consumers to fight against the unfair practices or be aware of it. Following are the important responsibilities of a consumer which they should carry out.

• They should know their rights under the consumer protection act and should practice the same in case of need.

• They should have sufficient knowledge about the product they are buying. They should act as a cautious customer while purchasing any product.

• A consumer can file a complaint if a product is found to be false or not satisfactory.

• The consumer can demand a cash memo while making a purchase.

• The consumer should verify the standard mark that has been introduced for the reliability of the quality of the product like ISI or Hallmark, etc.

Consumer Awareness in India

Consumer awareness campaign- Jago Grahak Jago is the most important and successful campaign which has shielded consumers against marketing malpractices and has successfully redressed consumer complaints. The campaign Jago Grahak Jago was started in 2005 by the Department of Consumer Affairs under the Ministry of Consumer and Public Distributions by the Government of India.

The Slogan “ Jago Grahak Jago”  means wake up consumers has now become very popular in almost every household. The Government of India used several different channels to create awareness among consumers. Following is the list of the channels used by the Government to meet the objectives of the “Jago Grahak Jago” awareness program.

• Media Advertisements

• Video Campaign

• Posters

• Printing

• Audio Campaigns

Conclusion

At last, it is concluded that consumer awareness means being aware of having the knowledge about the several consumer production laws, rectified techniques, and consumer rights which include the right to protection of health and safety from goods and services that consumers purchase, right to be informed about the price, quality, quantity, potency, and standard of goods.

“Excess of anything isn’t healthy” this phrase rightly describes the necessity of controlling inflation. When a country faces acute inflation, there is a high-interest rate and thus people cannot take up economic and costly projects thus eventually a whole set of people suffer from inflation. 

In this context we will learn what are the dominating factors that lead to this situation, what are the controlling techniques of inflation, and how does the RBI or the government of India maintain the inflation rate in India.

 

Monetary Policy to Curb Inflation

Inflation can be controlled by a contractionary monetary policy is one common method of managing inflation. A contractionary policy aims to reduce the supply of money within an economy by lowering the prices of bonds and rising interest rates. Thus, consumption falls, prices fall and inflation slows down.

A contractionary monetary policy is one common method of managing inflation. A contractionary policy aims to reduce the supply of money within an economy by lowering the prices of bonds and rising interest rates. Thus, consumption falls, prices fall and inflation slows down.

Methods to Control Inflation

The Central Bank and/or the government normally monitor inflation. Monetary policy is the key policy employed (changing interest rates). There are however several instruments to manage inflation in theory, including:

• Monetary Policy: Higher interest rates decrease the economy’s demand, resulting in lower economic growth and lower inflation.

• Money supply management claims that there is a near correlation between money supply and inflation, so inflation can be regulated by regulating the money supply.

• Supply-side policies are policies designed to boost the economy’s productivity and efficiency, placing downward pressure on long-term costs.

• Fiscal Policy: A higher rate of income tax could reduce spending, demand, and inflationary pressures through fiscal policy.

• Price limits may, in principle, help alleviate inflationary pressures by attempting to regulate wages. Nonetheless, apart from the 1970s, it was scarcely used.

What are the Measures to Check Inflation?

Inflation is an economic phenomenon that is used year after year to characterize rising prices for goods and services. This caused the consumer’s buying power to decline because the rate of wage and income growth does not keep up with the rate of inflation.

Inflation management is not an easy mission, however. The rise in prices is due to several factors, such as aggregate demand, increased cash supply, etc. We need a lot of steps working in tandem to contain inflation.

Fiscal Measure to Control Inflation

Government spending, public borrowing, and taxes comprise the Fiscal Policies to Combat Inflation. The Keynesian economists often referred to as “Fiscal,” argue that due to an excess of aggregate demand over aggregate supply, demand-pull inflation is induced.  Owing to spending by individuals, companies, and the government, aggregate demand rises (usually excessive spending by the government). This rise in demand due to the government or household spending can be effectively regulated by fiscal policies. Fiscal policy and fiscal initiatives are thus effective weapons of demand-pull inflation management.

If the key trigger behind demand-pull inflation is government spending, then it can be regulated by reducing public expenditure. The public demand for goods and services declines with a decline in public spending, along with a decrease in private income and consumption expenditure. In cases where demand increases due to an increase in private spending, the most effective way to manage inflation is by taxing profits. The taxation of private income decreases the disposable income in question, and also reduces consumer spending. This has the effect of reducing aggregate demand.

In the event of a very high persistent inflation rate, both such steps may be taken simultaneously by the government to contain inflation. In the case of a decrease in public spending, the rate of taxes on private income is increased to keep demand under control. This form of policy of concurrently using both measures is called the “Surplus Budgeting Policy,” which notes that “the government should spend less than tax revenue”.

Monetary Measures to Control Inflation

Monetary interventions are aimed at reducing revenue from money.

(a) Management of Credit:

Monetary policy is one of the essential monetary interventions. A variety of strategies are employed by the country’s central bank to regulate the quantity and quality of credit. To that end, bank rates are raised, securities are sold on the open market, the reserve ratio is raised and a range of selective credit management steps are taken, such as raising margin thresholds and controlling consumer credit. When inflation is due to cost-push variables, monetary policy will not be effective in managing inflation. Due to demand-pull variables, monetary policy can only be effective in managing inflation.

(b) Currency Demonetisation:

One of the monetary steps is to demonetize higher-denomination currencies. Such a step is typically taken when the country has a surplus of black currency.

(c) New Currency Issuance:

The problem of a new currency in place of the old currency is the most drastic monetary measure. Under this process, one new note is exchanged for several old currency notes. Likewise, the value of bank deposits is set accordingly. Such a measure is introduced when the issue of notes is excessive and hyperinflation occurs in the region. It is a measure that is very successful. But it is wrong because it affects the tiny depositors the most.

Rural India is faced with the burning problem of poor credit and banking services. The rural banking sector is also not in a good position. Farmers and people of other occupations in rural areas often fail to pay the credit to the banks and commit suicide. With such a situation increasing rapidly, it is high time we divert our attention towards credit and banking in rural areas. In the following, we will be talking about the credit system in rural areas and the role of rural banks in the economic development of the country. 

 

History of Rural Bank

The importance of rural banking was felt right after independence and from there NABARD came into operation. It started giving credit to the farmers and other rural people at lower interest rates. That there is a difference between the monetary activities of the rural people and the urban people gave rise to the conception of the National Bank for Agricultural and Rural Development or NABARD.

 

As days passed, various self-help groups also started performing and brought forth microcredit generation. Post green revolution, agriculture improved and so did the income of the farmers. Thus, the role of rural banks also went through a change.  After independence, rural people, poor people in need of money, were exploited a lot. Traders and local moneylenders took their advantage and granted them loans at interest rates incredibly high. Thus, deb was unavoidable. NABARD came to the rescue of these people and offered loans and credits at an easy interest rate. 

 

Presently, India has 45 regional rural banks all across the country. Haryana Kshetriya Gramin Bank Bhiwani, Gorakhpur Kshetriya Gramin Bank etc are a few examples of a rural bank.

 

Banking Facilities in Rural Areas

Rural development is a lot dependent on the credit system. Modifying the banking and credit system is quite the need of the hour to improve productivity in both agricultural and no-agricultural activities. Farmers are most in the need of credit in between the time of sowing and harvesting. This is the time they are short in cash and need it for general purposes, buying cattle, investing in more land and carrying on with life. 

 

Reserve Bank of India or RBI is the apex body of national banking. But with regard to banking facilities in rural areas, NABARD is given all the power and referred o as the apex banking body. All the activities associated with banking and credit in rural India are managed and regulated by NABARD only. 

 

What Role does Rural Banks Perform?

The growth of the Indian economy is largely dependent on rural emancipation from socio-economic hindrances such as unemployment, poverty etc. This is where rural banks come in and the role of banking in rural development becomes undeniable. The rural credit structure is gradually getting rejuvenated with the help of the rural baking and credit system. With the increased activity of rural banks, both the priority as well as non-priority sectors have been able to get loans sanctioned. Development of agriculture-based economy is what the rural banking sector targets at and for that gives out short and long term loans. The involvement of the formal banking system has its problems also. To continue with formal banking, it is a must that there is some collateral involved. But for rural people in urgent need of credit, it is difficult to have collateral ready or sometimes they do not even possess any. As a result, the formal banking system rules them out. Here lies the importance of self-help groups or the SHGs. 

 

The SHGs give out small credit to those in need without any collateral. Instead, the members of the group, the needy ones, commit to keeping a certain sum of money in the pool. Loans are sanctioned at an interest rate that is a lot cheaper than the formal banking system. This is why a huge number of SHGs are found to be operational throughout the country. Thus, the microcredit concept is run. 

 

Did You Know?

• NABARD was set up with the primary goal of elevating agriculture and other non-farm areas in rural areas of the country by increasing the credit flow and thus further strengthening rural India. 

• Initially, NABARD had the capital of Rs. 100 crores. 

• No other institution in India is as important as NABARD when it comes to taking care of the small industry, cottage industry, village industry and other rural local industries. 

• SHG Bank Linkage Programme is another name for NABARD. It encourages the banks to lend to the self-help groups so that the poor rural people in need without the capability of producing collateral can have the loans. 

• The pioneer of the rural banking system NABARD boasts of supporting 100% corporate social responsibility. 

 

How to Prepare Notes on Credit and Banking in Rural Areas

• Go through Credit and Banking in Rural Areas

• Read the page thoroughly

• Start writing down everything that you read in your own language

• Follow the sequence of the page

• Do not write down everything that you read

• Do not just copy-paste but understand the stuff that you write

• Use drawings and illustrations to better understand the concepts

• Write brief sentences

• Revise from these prior to an exam

 

Does have Anything on Credit and Banking in Rural Areas?

has ample study material on Credit and Banking in rural areas. Students can read from  Credit and Banking in Rural Areas and then clarify all doubts related to the topic. This page can be downloaded in a PDF format and then be referred to as well. Everything here has been provided free of cost to the students so that they can go through these without any second thoughts. has remained instrumental in shaping the careers of countless students who have availed its platform.

Demand is the economic principle that refers to a consumer’s desire to purchase goods and services and its willingness to pay a price for a specific good or service. Other factors being constant, with an increase in the price of a good or service it will decrease the quantity demanded and vice versa.  Market demand, whereas, is the total quantity that is demanded across all the consumers in a market for a particular good. This aggregate demand is defined as the total demand for all the goods and services that are present in an economy. Multiple stocking strategies are used to handle this demand.

Recognizing the Demand Schedule

The most common demand schedule has two columns. In the first column, prices for products are shown in ascending or decreasing order. The quantity of the product required or demanded at that price is listed in the second column. The pricing is set after thorough market research.

When the data from the demand schedule is graphed to generate the demand curve, it provides a visual representation of the price-demand connection, allowing for simple calculation of demand for a product or service at any point along the curve.

Explain Demand Schedule 

The Law of Demand states that when the price of a commodity falls, the demand increases and also when the price of the commodity rises, the demand decreases, while other things remain constant. So, there exists an inverse relationship between the price and quantity that is demanded of this commodity. The functional relationship between the price and the quantity demanded can be represented as:

Dx = f(Px). 

Now we should know what a Demand Schedule is.

This is a statement in a tabular form that shows different quantities which are being demanded at different prices. There are two types of Demand Schedules:  

In economics, a demanding schedule is a table that shows the quantity that is demanded of a good or service at different price levels. A demand schedule can also be graphed as a continuous demand curve on a chart where the Y-axis represents the price and the X-axis represents the quantity.

Demand Schedules vs. Supply Schedules

A demand schedule is typically used together with a supply schedule, that shows the quantity of a good which would be supplied to the market by the producers at given price levels. By drafting these graphs, both the schedules on a chart with the axes described above, it is possible to obtain a graphical representation of the supply and the demand dynamics of a particular market.

Also, in a typical supply and demand relationship, as the price of a good or the service rises, the quantity demanded drops and falls. When all these factors are equal, the market reaches its equilibrium, there the supply and demand schedules intersect with one another. At this point, the corresponding price is the equilibrium market price, and the corresponding quantity is the equilibrium quantity that is exchanged in the market.

Additional Factors on Demand

Price not being the sole factor determines the demand for a particular product. The demand may also be affected by the amount of disposable income available, shifts in the quality of the goods in question, effective advertising, and other weather shifts.

Price changes in the related goods or services may also affect the demand. Here the price of one product rises, and the demand for a substitute may rise, also a fall in the price of a product may increase the demand for the complementary goods. For example, a rise in the price of one brand of the coffeemaker will increase the demand for a relatively cheaper coffee maker that is produced by a competitor. If the price of all coffee makers falls, the demand for coffee, which is a complement to the coffeemaker market, may rise as consumers may want to take advantage of the price declining in the coffeemakers.

Individual Demand Schedule 

This is a demanding schedule that illustrates the demand of an individual customer for a commodity in relation to the price. 

Let us study, by referring to an example.

The above schedule represents the individual demand schedule. Here when the price of the commodity is ₹100, its related demand is 50 units. Also, when the price is ₹500, then its demand decreases to 10 units.

So, we can conclude that as the price falls the demand increases and as the price rises the demand decreases (Vice Versa). Thus, we see there is an inverse relationship between the price and the quantity demanded.

Individual Demand Curve

Below is a graphical representation of the individual demand schedule, where the X-axis represents the demand and the Y-axis represents the price of the commodity.

()

The above demand curve shows the demand for the fuel that is Gasoline. The price of gasoline is 3.5 per litre, the demand is 50 litres and as the price is 0.5 per litre, the demand is 250 litres.

The Elasticity of Demand

Demand elasticity, also known as price elasticity of demand, is the degree to which rising prices translate into decreased demand. The demand elasticity of corn is 1 if a 50% increase in corn prices induces a 50% decrease in the amount of maize desired. The demand elasticity is 0.2 if a 50% increase in maize prices only reduces the amount desired by 10%. For items with greater elastic demand, the demand curve is shallower (near to horizontal), whereas, for products with less elastic demand, the demand curve is steeper (closer to vertical).

A new demand curve must be generated whenever a factor other than price or quantity changes. Assume that the population of a region grows, resulting in an increase in the number of mouths to feed. In this situation, even if the price remains unchanged, more maize will be requested, causing the curve in the graph below to move to the right (D2). To put it another way, demand will rise.

Conclusion

Demand is the economic principle that refers to a consumer’s desire to purchase goods and services and its willingness to pay a price for a specific good or service. The Law of Demand states that when the price of a commodity falls, the demand increases; while other things remain constant.

People often make the mistake of using the terms ‘customer’ and ‘consumer’, interchangeably. While in some cases customer and consumer may indicate the same section of people, it is still vital to understand the key differences between these two widely used terms.

In general usage, the terms consumer and customer are frequently interchanged. Simply said, a consumer is someone who consumes a product. A customer, on the other hand, is someone who buys or purchases a thing.

Now the question arises, what is the difference between a customer and a consumer? Nonetheless, the consumer is indeed the primary goal in the commercial world. A customer, on the other hand, consumes or uses the product. He is the only one who can reveal the outcome. A consumer decides whether or not a product or service is of high quality.

 

Defining Customers: Who is a Customer?

To understand and appreciate the distinction between customers and consumers, one should start by understanding the definition of each. Derived from the word ‘custom’, customers are defined as those individuals who buy products or services after paying the monetary price for the same. For example, XYZ Ltd. buys a thousand cartons of eggs and pays Rs.50000 for them. Thus, XYZ becomes a customer for that commodity.

Customers can also be referred to as clients or buyers. Therefore, any person or business buying goods or services regularly from a seller is known as a customer.

A customer is someone who buys goods and services from a vendor regularly and pays for them to meet their requirements. Many times, a customer who purchases a product is also the consumer, although this is not always the case. When parents buy a product for their kids, for example, the parent is the customer and the kids are the consumers. Clients or buyers are other terms for them.

 

Different Types of Customers

There are a few different categories of customers:

• Loyal Customer- These customers are satisfied with the services and quality of products from a brand or store. Therefore, they tend to return multiple times for purchases

• Trade Customers- These customers buy products to add value to the items and resell them for a profit. For example, manufacturers, wholesalers, retailers and other such entities are trade customers since they are not the end-user of the goods they purchase.

• Final Customers- People who purchase products for their own use are known as final customers. In such a case, no reselling or profit generation takes place after goods purchase.

• Discount Customers- These customers only purchase goods and items when there is a discount applied to the products.

• Impulsive Customers- These customers are difficult to persuade because they don’t buy a specific product but rather buy anything they think is excellent and fruitful at the time.

• Need-Based Customers- These customers tend to limit their purchase to only those items or goods, which they require.

• Wandering Customers- These are the least valuable customers because they are unsure of what they want to buy.

Defining Consumer

Someone who buys something for their personal use and subsequently consumes it is referred to as a consumer. The consumer cannot resell the product or service, but he or she can use it to support themselves. A consumer is a person who consumes a product or service without the permission of the buyer. A consumer, in simple words, is someone who buys or utilizes goods or services.

Now that you know about customers, you must be wondering “who is a consumer?” Consumers are those customers who buy goods and services for their own use. Thus, all end users of a particular product are its consumers. For example, Raju heads to the nearest store to buy a carton of eggs for himself. In this scenario, he is both a customer and a consumer.

Every person who participates in the economy is a consumer of the product. When a person buys groceries for their family from a grocery shop, for example, they become a customer because they are only acquiring commodities. However, when they feed the groceries to other family members, they become the consumer.

 

Types of Consumers

Consumers are important in a variety of ways, as shown below:

• The Extrovert Type: People who fall into this category are those who have a thing for branded goods. They will almost certainly continue with them and attempt to become loyal. They have a good probability of becoming brand supporters if they are presented with high-quality items and services. These people seek unique brands for purchase and can become loyal customers for that brand if they find quality products and services.

• The Inferior Goods Type: These consumers generally suffer from low income, which forces them to seek inexpensive products for consumption. As a result, people are obligated to purchase only those items that are necessary for their existence.

• The Commercial Type: This group of people buy products and goods in bulk, irrespective of their actual needs or requirements. This group of customers will buy goods and products in large quantities, regardless of their actual needs. This could be utilized for commercial purposes or not.

• The Discrete Type: As the name implies, these customers prefer to shop discreetly. Simply said, they will consider spending a significant amount of money on only a few specialized products, such as cosmetics, jewelry, or clothing. And I’m going to try to avoid thrifting in the other categories. These consumers have a unique buying habit, generally spending a considerable sum of money on electronic products and apparel.

True or False Section

Q. All Consumers are Customers, but not all Customers are Consumers. Is this statement true or false?

A. False

A person needs to buy products and goods to qualify as a customer. However, a consumer may not necessarily be the buyer of the product. For instance, if goods are gifted to an individual, he/she is still the consumer but not the buyer in this instance.

Similarly, customers who purchase products to resell cannot be categorized as consumers of the said item. Thus, not all customers are consumers.

Customer vs Consumer

When trying to gauge the difference between consumer and customer, refer to the following table for help.

 

Do it yourself-

If X buys rice to sell at his retail outlet and Y buys rice for his family, identify whether X and Y are consumers or customers.

The distinction between a consumer and a customer is a key concept for all commerce students. If you still have doubts regarding consumer vs customer, you can sign-up for ’s live online classes for a more nuanced understanding. Conducted by subject experts, these classes can assist students in appreciating and learning the finer elements of class 11 and 12 commerce.

Management is the process from planning, organising to the final action and fruition of any activity. In trade and commerce, Management is a requirement to be fulfilled with sensitivity and sensibility. It is not an overstatement to say that Management can make or break a business. It is therefore very important for students to learn from the basics to the essence of this game-changer, Management.

In this article, students can find the definition of Operational management and Production management and the difference between them.

Production management and operation management primarily focus on managing and using the resources of an organisation to maximise its capabilities. Production management stands for managing activities that are related to production. Whereas, operation management takes a step further and manages the administrations and business operations related to manufacturing and other activities.

Production management is a subset of operation management. However, before proceeding to the difference between production management and operation management, a detailed and separate understanding of these two concepts is necessary.

Production Management

Production management means applying the principles of management to build an effective outline for production. It involves various tasks like planning, supervising, scheduling, and enforcing adequate regulation to maximise output. In a nutshell, it is an efficient use of an organisation’s resources to turn raw materials into products. 

Furthermore, production management includes making a decision related to raw materials, quality and quantity, design of the product, packaging, and pricing. A production manager is a person who is in charge of making these decisions and ensuring that the product matches the required quality standards. 

This management technique plays an integral part in the success of a business. It aids a company to maximise its production without compromising the quality of the final product. Some critical functions of production management are –

1. It has total control over production; the production manager draws up the basic plan for this purpose. 

2. Production management enforces scheduling to manage production efficiently.

3. It ensures that a company keeps on producing quality products at a minimal cost.

4. Last but not least, it takes care of the health of machinery involved by scheduling regular maintenance and repairs.

Operations Management

Operations management applies the principles of management to manage the everyday activities of a company. Therefore, it guarantees the smooth and effective running of an organisation. It involves planning, designing and supervising production as well as other non-production activities.

Additionally, the primary objective of operations management is to ensure the optimal use of a company’s resources and decrease wastage. Moreover, it seeks to deliver the right product to customers by involving every department of a company to work in harmony.

Furthermore, operations management is vital for a business to improve its overall efficiency as well as deliver quality products. Here are some essential functions of operations management –

1. It develops a strategy that allows a company to maximise its resources and increase its foothold in the market in which it is operating.

2. An effective management strategy here can improve a company’s financial standing.

3. It helps companies to develop products as per the market requirements and current trends.

4. Operation management also aids in developing a future outline of the company. It takes into consideration changes in the market and customer behaviour to provide this forecast.

Now that you know what production and operations management is, here is a comparative study that outlines their differences.

Primary Difference between Production Management and Operation Management

Here are the primary differences between these two vital factors behind the successful running of a company –

Definition

Production management is part of operations management. However, when you define production and operation management, you can see that they are two very different concepts indicating two different purposes. Production management primarily deals with factors associated with the production of goods and services.

On the other hand, operations management comprises managing production as well as the administration of a business. It ensures a smooth production and delivery system of products at minimum cost without compromising on quality.

Scope of Operation

Scope of operation is a significant point of difference between production and operation management. Production management’s operational scope is limited to production. With its help, a production manager creates a compelling production strategy in an attempt to maximise a company’s potential.

Contrarily, the scope for operation management is much broader as it deals with every aspect of a company. An operations manager is responsible for formulating a strategy that will ensure the proper use of every company resource. Moreover, he/she has to look after non-production areas like product design, human resources, inventory, logistics, waste management, etc.

Objective

Objectives of production and operation management are crucial to their difference. Production management aims to provide the best quality product at minimal cost and on time. In contrast, the objective of operations management is to ensure the best use of company resources.

Where is It Prevalent?

Production management is found in companies that manage a production unit. Whereas, operations management is found in every business, whether it has a production unit or not.

There are several differences between these two concepts, as mentioned above. However, the importance of production and operation management is unquestionable for a business to attain success. 

While production management takes care of the entire production unit and ensures its efficient performance. Operations management, at the same time, manages the other non-production factors also. 

It ensures that the company delivers the best product at the best prices. Therefore, for a company to become successful in a highly competitive market, these two aspects have to work for hand in hand and effortlessly.

The difference between production management and operation management is a vital topic for every commerce student. Furthermore, students who want to learn more on other topics of commerce can visit the official website of .

How does help the Students to learn About Production Management and Operational Management and Other Relevant Topics on Management in Commerce? 

is an online learning platform that provides free access to quality study material and books to download in PDF format for both Hindi medium students and English medium students.

1. Students can find a variety of all the necessary articles at strictly dedicated to the study of management in regard with Business studies for the students like Levels of Management, Revision notes on Management, The Introduction to Levels and Functions of Management, Recent trends in Management and Flow management in Supply chain.

2. Students can also find free learning material on the topic at the NCERT Solutions, Reference Solutions, Topic-wise Explanations, Revision notes, Important Questions, CBSE Sample question papers and Previous Year’s question papers solved by the experienced and dedicated teachers from prestigious institutions like IITs and other top tier colleges at . 

3. Moreover, provides a Live Learning experience from the best of all teachers through Live and interactive classes, doubt sessions, and Live Quizzing, making it a sincere and disciplined learning process about all subjects including Management in Business studies. In this regard, also provides several Academic Micro courses all for free to students learning about Management in Business studies to excel in their academics.