Senior High School

Entrepreneurship
Quarter 2 – Module 1- Lesson 1:
The 4Ms of Production in Relation
to the Business Opportunity

Writer:
LOVE JOY C. OCAMPO
T-II – DIOSDADO MACAPAGAL MEMORIAL HS
Editors:
JANE P. VALENCIA, EdD – Math/ABM Supervisor CHAIRMAN

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 What I Need to Know

This module was designed and written with you in mind. It is here to help you
to describe the 4Ms of Operations in Relation to the Business Opportunity. The scope
of this module permits it to be used in many different learning situations. The
language used recognizes the diverse vocabulary level of students. The lessons are
arranged to follow the standard sequence of the course. But the order in which you
read them can be changed to correspond with the textbook you are now using.

The module is composed of one lesson and sub-topics, namely:

 Lesson 1 – Describe the 4Ms (Materials, Machines, Methods and Manpower) of

Operations in Relation to the Business Opportunity

After going through this module, you are expected to:

1. Be able to have an understanding of the 4Ms of Operations.

2. Describe each of the 4Ms in relation to the business opportunity.
3. Develop an effective product description
4. Be able to create own product example and test it.

What I Know

Hi! Hope you are having a great day today as we start our second quarter, Just
like the previous lesson, we will have our pre-test to check your prior knowledge about
the topic. If you got a perfect score, you can skip this lesson and proceed to the next
module, but if you didn’t get a perfect score, you don’t have to worry because this
module will help and guide you to understand the topic Are you ready? Let’s start.

Directions: Choose the letter of the best answer. Write the chosen letter on a separate
sheet of paper.

1. It suggest how raw materials will be transformed using the other factors in the
production.
a. Machine c. Material
b. Manpower d. Method

2. It is not limited to muscular activities but also intellectual, creative abilities etc.
a. Capital c. Land and technology
b. Labor d. Money

3. It is another term used to describe factor inputs because of its transforming

properties.
a. Intermediate input c. Processors
b. Productive input d. Transformers

1
 4. The following are productive inputs EXCEPT for one.
a. Capital c. Land and technology
b. Labor d. Money

5. The Kitchen Therapy bake cakes and pastries, and sugar is one of the must
have in their grocery list. What does sugar represents in their production of
goods?
a. Machinery c. Raw material
b. Decoration d. Finished product

6. Entrepreneurs can protect their product through .

a. Connivance c. Bribery
b. Patent d. Black Propaganda

7. It is a process of appointing a third party manufacturer to do the

manufacturing operations of the business.
a. Operation Planning c. Outsourcing
b. Manufacturing d. Training

8. Cost, quality and availability should be considered in choosing .

a. Product c. Material
b. Price d. Machine

9. It is the first version of the product.

a. Supply c. Imitation
b. Sample d. Prototype

10. What is not a risk in outsourcing?

a. Saves you from buying expensive machines
b. Runs out of supplies
c. Outsource company closes
d. Produces sub-standard products

Lesson
Describe the 4Ms of Production in
1 Relation to the Business Opportunity

In the previous modules, we have discussed about marketing mix (7Ps) in

relation to the business opportunity and how one can develop their own brand name.
Let us have our review of what we have learned before we proceed with the 4Ms of
Production.
 What’s In

Activity: A. Think, Pair and Share:

Directions: Ubecheesedesal is the new hype today. Imagine you will put up your own
ubecheesedesal store. How will you create an effective and integrated
marketing mix for it?

Product Price Place Promotion People Packaging Process

ubecheese
Suggestion
desal

Justification

Additional
factors to
consider

B. What’s in a name?

Directions: Considering your answer in activity A. Create a brand name that will catch
the attention of your customers.

Notes to the Teacher

tips and strategies that will help you in guiding the learners. It is important to review learners to gauge what they have learned before p

What’s New

This activity will give you an overview of what we will discussed about the 4Ms
of Production in Relation to the Business Opportunity.

Activity: Can you analyze the pictures below? Give a brief description based on
what you have observed.
 A.

B.

C.

D.

What is It

If Sales is the engine that powers Auto Salvage yards then Production is the
drive train that gets us where we are going. Production is both reactive and
proactive almost simultaneously. It reacts to what is sold today and must meet
the expectations set by the sales team; also, it must anticipate what most likely
will be needed in the near future. The key for production is to have procedures
and processes that can accomplish both. Operations Management then controls the
implementation of the business plan. Once our procedures are set up to
maximize efficiency, it is time to train the production staff on their individual
responsibilities centered on the 4Ms of Production.

So, what are the 4Ms of Production? It is the Method, Manpower, Machine and
Materials. They are also called as the four critical domains, usually associated to
manufacturing. These four are also related to business opportunities since most
business is tied to manufacturing also. The businessman per se should look all four
into account.

4Ms of Production

Figure 1.
Let’s take a look at each one:

1. Methods - suggest the process of combining raw materials and how these are
going to be transformed using the other factor inputs of production.
This resource input is also called technology or techniques of
production since it prescribes the intensity in the use of factor inputs.

If labor is abundant and cheap in the locality, the firm might use
more labor-intensive techniques. This only means that they will use labor
more than other factor inputs. However, if labor is expensive and capital
is cheap the firm or company may implement a capital-intensive
technology. This means that will use more capital compare to the other
factor inputs.

Ex. Now in the production of pandesal,the mixing of ingredients will use

manual labor intensively as applied by small bakeries. On the other
hand, large bakeries in urban areas will use modern baking
equipment and utensils that are capital intensive.

2. Manpower – the right human resources who will handle certain business
operations. It is one of the highest cost of operating the business, but
also the most instrumental to its success.
- It does not only include labor or muscular power nut also intellectual,
creative abilities and other qualities of individuals that can contribute to
the production.

As the business grows, the entrepreneurs should hire qualified employees

that can handle operational functions even without his assistance, so that
he will be free from daily activities and can focus on thinking of new
strategies and functions of the business.

Ex. In the production of pandesal, manpower resources include the

baker, and his assistants who will implement the recipe using the
available equipment, and technology. The manager, sales clerks ,
and janitors are also part of the manpower of the bakery

3. Machine – technology used in efficiently operating the business. It was also

described as the “best friend” of manpower in producing goods and
offering services. Machines are not limited only to physical equipment
but can also pertain to new technologies. It also represents all man-
made physical capital used in the production process. Aside from
machines the tools, durable equipment, and the physical plant are also
part of it. Without machines, business operations will be too
unmanageable, costly and with low quality.

Ex. In the production of our pandesal, the machinery comprises the

oven, baking utensils and the bakery itself.

4. Materials – to be used in creating a product or performing a service, which

includes supply chain management
Ex. In the process of producing pandesal, we need several materials
that serve as intermediate inputs which include flour, sugar,
butter, eggs, salt and other ingredients.

 Make sure that your supplier of raw materials should have

consistent and have sufficient amount of supplies that can
accommodate the demand of your company
.
  The selection of the supplier depends on how they will not cause
interruptions in the production of goods and serving customers.

Materials Requisitioning Options

 Manufacturing own products or offer services – if this is the
case entrepreneurs need to prepare huge capital for the
materials, machines and manpower which we all know will cause
the company a greater risk. However, through this entrepreneurs
can closely monitor the quality of his product and can build his
own name overtime making his own brand identity.

 Outsourcing of manufacturing or service activities to a third party

– this is the process where a company appoint a third party
manufacturer to do the manufacturing operations of the business.
Expertise wise these third party companies have more experience
and can handle manufacturing products tailored to the
entrepreneur’s needs at a lower cost. It also saves the
entrepreneur from buying expensive machineries, but has it also
has its risk such as: Profit shared with the third party, they run
out of supply, when the outsource party closes its business and if
they produced sub-standard products.

When outsourcing the entrepreneur must protect its product

through a trademark or a patent and a noncompeting or
nondisclosure agreement.

o Patent – the right to protect the entrepreneur

regarding the product or service.
o Trademark – a sign or symbol that helps
to distinguish the product from the others
o Nondisclosure Agreement – states that the third
party will be given full access to any confidential
information provided that it should be disclosed to
anyone else.

 Purchasing own products or services from present suppliers –

this is where entrepreneurs purchased finished products from
manufacturer or offering the services of another company. The
company can save the cost of the machines and manpower.
However, the entrepreneur cannot own the brand name of the
product or service and the manufacturer is not restricted to sell to
the entrepreneur’s competitors.

Traditionally, these are the crucial four (4) domains of production where one
cannot function properly without the other. However, allow me to add another M in
this list.

Money – it is a financial resource used to purchase all the resources needed by

the firm for its operation. The owners of the company contribute seed money for
the initial operations of the firm. It is also needed to purchase raw materials,
pay salaries of the workers and managers and durable equipment needed for
the company.

In the economic analysis of production, the resource inputs mentioned above

are grouped into two major categories – intermediate inputs and factor inputs.
  Intermediate inputs – are semi-processed materials that need further
transformation to produced a finished product. They are also called raw
materials or materials.
 Factor inputs – are the transforming inputs that will process the
intermediate inputs into finished products. They are also called
productive inputs because of their transforming properties. This includes
labor (manpower), capital (machinery), land and technology (method).

While money does not have a direct participation in the physical transformation
of the intermediate inputs, it is very crucial in the production process. As mentioned
earlier, we use it to purchase materials, pay workers’ salaries and wages and even the
machineries we use.

Now that we already know how important 4Ms are in the business process
together with the 7Ps of marketing mix, we can definitely make the Ayalas or even the
Lopezes run for their money right? We should only need to understand and know how
to entice our prospective buyers to buy our products.

How will we do that? Definitely through an effective product description, you

can guarantee that they will hit that “add to cart” button in an instant. Product
description is one of the important aspect of selling, you have to visualize what your
target market will patronize and would like to have. Here’s the 3 Rules to Visualize a
Product Descriptions That Sell.

1. Know who your target audience is – you might want to highlight the things
that might interest your potential buyers. You can actually do this by
knowing what specific demographics you are going to cater. Is it for teens?
Young professionals or Seniors. By knowing such you will have a specified
goal to achieve once you roll your product.

2. Focus on the Product Benefits – know the difference between product

features and benefits. A product feature is a factual statement about the
product that provides technical information. A product benefit, on the other
hand, tells how the product can improve the buyer’s life. If you are the
customer I know you will choose the latter. However, you can always convert
the features into benefits.

3. Use good product images – aside from the description, a quality image will do
the trick. Why? Because 63% of customers think that a product image is more
important than the description or even the reviews. So an important aspect of
your product description is actually in the photo itself. Quality photos will
show the customer all of the key features about your product. They will also
allow the customer to imagine having this product in her life.

Once you already have a clear vision of what should be the description of your
product. We can now create our own prototype.

What is Prototype?

You have visualize a great product. You can imagine how this particular
product will make a change and how it will be a great help to make our life easier.
However, what we have in mind is sometimes a lot difficult to explain so we create a mock-
up of what the final product will look like, that is a prototype . A Prototype is an initial
creation of a product that shows the basics of what product will look like, what it will
do and how it will work. However, it is not meant to be the final version as there will be
lots to improve.
Figure 2: prototype example

Advantages of Prototypes:

1. Creating prototype gives you the opportunity to test and refine the
functionality of your design.

2. It makes it possible to test the performance and quality of the materials.

3. It will help you describe your products more effectively with potential
buyers.

4. It will encourage others to treat you more seriously.

What’s More

Did you enjoy the mini-lesson of the module? To better understand it, let’s have
another activity. Enjoy!
Activity:

Directions: Complete the sentence by filling up the blank. Find the correct answer in
the puzzle below.
 e x m t e k r a m t e g r a t
f p i o j x n n r x m p a g c
c v y c n z i e u j u j o u n
j l b t n e i d r v d b b h z
k b r w o l y e y w d h a l a
r v y j p t p a t e n t i u t
a l i p p c o e u h c j e u w
m g u a s u p r u c t o s q u
e s v x a v l c p p v h b i d
d i r u y o e s f y o l v v e
a c r c w k n n e i q a p o w
r t k m d v q j w v h p v e s
t l i w i x k p p w k a g n z
d r x y g t w s u o h z s x h
j y l y m f s h o a s i p w m

1. is a financial resource used to purchase all the resources needed

for the business operation.

2. Product description is essential in promoting your product to your ,

through this strategy you will guarantee a conversion.

3. The of the raw materials should have consistent and sufficient

amount of supplies that can accommodate the entrepreneur.

4. is an initial creation of a product that shows the basics of

what product will look like, what it will do and how it will work.

5. It is important for entrepreneurs to protect their product when outsourcing

through the use of _ and .

What I Have Learned

Good job you are almost done, did you enjoy the activity? Now it’s time for us to
check what we have learned by listing down the important facts that have retained in
your mind about the 4Ms of Production.

Activity:: Write down inside the treasure box the lessons you have learned 4Ms of production. about
1.
2.
3.
4.
5.
 What I Can Do

Congratulations! You are now ready to apply what you have learned about
Production. Time for us to exercise our brains.
Activity:
A. Enumerate and define the 4Ms of production + 1 in your own words.
1.

2.

3.

4.

5.

B. Suppose you will put up a store, what product will you offer your
customer? Draw or paste cut-outs of your product prototype and give a brief
description that will entice your customer to make a purchase. Do it in a
separate sheet of paper.

Assessment

In the beginning of this module we have our pre-test. Now, this will serve as
your post-test. This will test you if you were able to understand the lesson well. God
Bless!

Multiple Choice. Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.

1. The Kitchen Therapy wanted to help her customers to distinguish her product
from the other pastry shop. What do they need to do to accomplish such?
a. Use of Trademark c. Bribe the people
b. Advertise d. Give brochures

2. Melinda wanted to use tools that will lessen their burden in doing manual
work. What production factor will she look at?
a. Method c. Machine
b. Manpower d. Materials

3. Machines are considered as the “best-friend of the in producing

goods and offering services.
a. Method c. Machine
b. Manpower d. Materials
 4. Which of the following is NOT included in the factor inputs of production?
a. Land and Technology c. Labor
b. Money d. Raw Materials

5. Food Overboard agreed to give Cravings by Kaye a full access to any

confidential information of the company, provided that they will not disclose it
to anyone else. What type of agreement do they have?
a. Prenuptial c. Bill of Sale
b. Property d. Nondisclosure

6. It is the M where one should look at one’s ability, intellect and creative ideas.
a. Material c. Manpower
b. Money d. Method

7. When looking for a supplier one must consider the following except for one.
a. People c. Cost
b. Availability d. Quality of the product

8. It is considered as the most important factor in the production.

a. Labor c. Raw Material
b. Land and Technology d. Capital

9. What does the equipment represents?

a. Manpower c. Material
b. Method d. Machine

10. Which among the following talks about the process of the production?
a. Manpower c. Material
b. Method d. Machine

Modified True or False. Write TRUE if the statement is correct if FALSE underline and
correct the word that make it false.

11. The 4Ms of production cannot function properly if one of the M’s is
not included.

12. A product prototype is the final product that you will sell in the
market.

13. In manufacturing own products or offer services, an entrepreneur

must prepare a huge amount of capital for the expenses.

14. Outsourcing a third party manufacturer have a lot of risk involve as

well as advantages.

15. A good product description can double the sales.

 Additional Activities

Suppose that you are going to put up a new business venture, how will you
plan to do your operations? What Method will you use? Who will you hire for a specific
task? Will you use Machineries? How about the materials? Fill the boxes below on how
will you apply what you have learned regarding the 4Ms of production/operation.
Explain your answers.

METHOD: MANPOWER:

MACHINE: MATERIALS:
 Answer Key

Rubr ics for the Activities

Areas of 4 3 2 1
Assessment
Ideas Presents ideas in an Presents ideas in Ideas are too Ideas are vague
original manner a consistent general or unclear
manner
Understanding Writing shows Writing shows a Writing shows Writing shows
strong clear adequate little
understanding understanding understanding understanding
Word Choice Sophisticated use of Nouns and verbs Needs more nouns Little or no use
nouns and verbs make essay and verbs of nouns and
make the essay very informative verbs
informative
Sentence Sentence structure Sentence Sentence No sense of
Structure enhances meaning; structure is structure is sentence
flows throughout evident; sentences limited; sentences structure or flow
the piece mostly flow need to flow
Mechanics Few (if any) errors Few errors Several errors Numerous errors
 Writer: Editor: Reviewer:
LOVE
JANE
JANE

Illustrator:
Layout Artist:
Language Reviewer:

ZENIA G. MOSTOLES, EdD, CESO V, Schools Division Superintendent LEONARDO C. CANLAS, EdD, CES
JANE P. VALENCIA, EdD, Education Program Supervisor, Mathematics
JUNE E. CUNANAN, Education Program Supervisor/ Language Editor
RUBY M. JIMENEZ, PhD., Education Program Supervisor, LRMDS