PBO Lesson 1.1 Commerce and Industry

 

Question no. 01) Explain the meaning of industry and the scope of industry ?

Answer: 

Introduction:            In the ancient times, people used to exchange their necessities for a long time, giving extra things to the needy person and exchanging the extra but necessary things for him and consuming them for a long time. The service also began to be taken in exchange for goods, in a way that one would give one's goods or services to another and accept food or goods from him in exchange, that is, sell one's goods or services to another and accept food or other goods as its value. Mudra came into existence after some time. Due to the use of mudra, buying and selling transactions became easier. This led to a variety of human activities to create and acquire wealth through buying and selling. Every work was done for the purpose of making money, henceforth it was called "business".

                                The first part of business is industry. The concept of industry means to produce goods. The conversion of natural raw materials into consumables is done in the industry. Human labor is used to produce these goods. The needs of human beings cannot be met if the things available in nature cannot be used in the same form. That is why the work of processing such raw material to make it consumable is done in this type of industry.

General Definition - "The process of processing natural raw materials and converting them into human utilities is called 'industry'."

According to Prof. Wright, "Industry is part of the economic activities of society by which raw materials are sold at a monetary value, including agricultural and extractive industries, as well as manufacturing and construction industries."

Industry scope / type:

01) Primary Industry - This type of industry provides food to the people. It also supplies raw materials to the construction industry. For example, industries like agriculture, fishing etc. are included.

02) Exhaust Industry - The industry of converting underground assets into consumable assets is called emission industry. For example mining, mineral oil, natural gas, gold, platinum etc.

03) Manufacturing Industries - Attempts are made to increase the usefulness of raw materials by converting them into consumables. For example making cloth from cotton, making machinery, soap industry, paper industry etc. 

04) Genetic Industry - This type of plant and animal production. These include animal husbandry, poultry, fisheries, nursery, etc.

05) Constructive Industries - Consumables are produced by the aggregation of many commodities in this industry. It brings together a number of manufactured goods and combines them properly to produce a consumable product. For example house building, ship building, road construction, dam construction etc.

In this way the meaning of the industry becomes clear as well as the scope of the industry.

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Question no. 02) What is Commerce? Explain the scope of commerce.

Answer : 

Introduction :             Commerce is the second part of business. This type of industry is the production of goods. It is important to deliver the product to the customer as the product is manufactured for the customer. That is why the concept of commerce includes all the actions required to deliver the product to the consumers. The term commerce refers to a number of activities, including trade, purchase and sale of goods, as well as ancillary services for trade.

Defination : 

According to Stephenson, "commerce is not just about buying and selling and handling goods, it is also about financing, insurance, warehousing and the transfer of goods.

General Definition: All that is required to deliver a product to the consumer is commerce.

: Commercial scope :

I) Trade: Trade is the buying and selling of goods and services. The task of delivering manufactured goods to the consumers is done in trade. Because manufactured goods are made for these customers, the next two types of trade fall.

a) Indigenous trade

b) Foreign trade

Indigenous trade: Domestic trade is called domestic trade. This trade takes place within the borders of countries. There are two types of indigenous trade: wholesale trade and retail trade. The wholesaler buys large quantities of goods from the manufacturer and sells them in small quantities to the retailers. Retailers sell these items to consumers in retail form according to their needs.

Foreign Trade: Trade between two countries is called foreign trade. No country can be perfect in all things, so we have to sell our goods to another country and we have to buy goods from another country. On this basis, foreign trade falls into two categories. Import trade and export trade. Import trade is the purchase of goods from another country, while export trade is the sale of goods to another country.

II) Auxiliary services to trade: Auxiliary services in trade are the services that require the help of many auxiliary services for the smooth conduct of trade.

• Banking
• Transportation
• Insurance
• Merchant agents
• Storage
• Sales promotion service

Banking: Every business needs capital. Bank are working to supply the suffix needed by the business. Since Bank is an institution for exchanging money, the research generated in trade can be done through Bank. Bank helps in the development of business by exchanging dowries for its customers, transfer of money from one place to another, provision of  Bank Loan facilities, medium and long term loans, handling of merchants' money etc.

Transportation: It is necessary to transport manufactured goods from the production center to the consumption center as the center of production and the place of consumption are different. Trading requires the transportation of raw materials as well as manufactured goods from one place to another. Transportation is divided into land routes, airways and waterways. Cheap and fast means of transportation can be used to supply large quantities of goods to the customers. Fast means of transportation have made it possible to transport perishable goods.

Insurance: Risks are created in the trading industry for a number of reasons. This risk created in the trade-industry is considered to be an obstacle in the progress of the business. Therefore, if this risk is accepted by a third party, the business can operate without any hindrance. Insurance companies have come forward for this. By accepting a very small amount in the form of premiums, the insurance companies assume the responsibility of the risk and guarantee the trader compensation.

Trade Agents: Trade requires the services of experts in certain fields. Individuals or organizations that provide such services are called commercial agents. Trade agents play an important role in the purchase of raw materials, sale of finished goods, sale of share capital, foreign trade, etc.

Storage: Pre-demand production is a feature of modern production systems, so after production, the goods are stored safely and supplied whenever needed. The act of hoarding also allows the price of goods to be controlled. New improvements in storage techniques have made it possible to retain even perishable items in their original form.

Sales Promotion Services: Sales promotion services include advertising sales promotion, personal sales, publicity and public relations. Advertising provides information to consumers about the quality, value, features, properties, etc. of the product. All kinds of sales promotion services are building and maintaining the reputation of the product as well as the organization in this society. As a result, the demand for goods increases. Sales promotion services eliminate barriers to customer information.

Thus the concept of commerce and its scope became clear.

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