ABSTRACT
Understand the transfer function of production cost and analyze • how companies produce and offer goods for sales Recognize the difference between short-term and long-term cost func-• tions, marginal cost function, and the shapes of various cost curves Analyze your industrial sectors to prevent production failures and • win in the market
Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product. In Lean manufacturing, the production transfer function asserts that the maximum production of a technologically determined production process is a mathematical function of input factors of production. Considering the set of all technically feasible combinations of output and inputs, only the combinations encompassing a maximum output for a specified set of inputs would constitute the production function. Alternatively, a production function can be defined as the specification of the minimum input requirements needed to produce designated quantities of output, given available technology. It is usually presumed that unique production functions can be constructed for every production technology.
