Question:

How many steps are in a 'typical' production chain?

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I am modeling production chains and I want to know what is a reasonable assumption for how many sequential steps (one after the other in linear sequence) are there in a production chain. Starting from the very beginning( raw material ) and going to the very end ( final good ), how many production steps are there?.Each step purchases goods from the previous step, except the first which extracts raw material. Note: If there is a vertically integrated company, count the number of steps before integration occurred.

I realize that a complete analysis is more of a production tree, narrowing down to the final product. But I am concerned with following only one starting product (only one linear path).

For example, is 15 way too large? Is 5 too small? If you want to pick an industry, and make your estimate for that industry, that is fine. I just want some better information to go on. Any sources and links are encouraged. Do not plagiarize.

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2 ANSWERS


  1. about 8or 10


  2. 1: Market research (competition level, demand projections, profit calculations, etc),

    2: Building production lines (purchasing, renting, etc.)

    3: Hiring workers,

    4: Purchasing other resources,

    5: Ensuring smooth production process,

    6: Selling products/goods

    7: Market reaction and it's dynamics feedbacks, etc.

    8: repurchasing resources to keep appropriate stock level

    9: Modifying product to market needs,

    10: Modifying production lines (investments)

    ...

    ...

    etc. cycle is repeating all the time.

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