Manufacturing vs. Service Based Production

Memorandum

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To: Professor Matthew Ford

From: Lindsay Cason (leader), Michael Strub, and Kristina Stewart

Subject: Manufacturing vs. Service-based Production

Date: 2/3/14

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Introduction: The focus of the following memorandum is based on manufacturing production versus service-based production economies. Being that the greatest percentage of GDP of the U.S. is service-based, it is evident that this country is becoming increasingly dependent upon services. The United States people are now more dependent upon the fellow citizen that can produce output here and now.

Summary:

1) United States GDP increased by 12% in the service industry from 2011 to 2012 from 68% to 79.7%. The American people rely heavily on services with high customer contact, services are consumed as soon as they are purchased, and where people create the experience.

2) Standard of living has improved and will continue to improve with service-based production, based on the national rankings of GDP, where the U.S. comes in first, with $16,244,600,000,000 as of 2012. As well as, lowering costs for consumers and improving choice and quality.

3) Consumers have reached a level of satisfaction where they no longer need or depend on physical and tangible products. In regards to Maslow’s Hierarchy of Needs, consumers are now “well off” and need intangible services provided to them, such as haircuts, doctor visits, accounting services, and dining out.

Discussion:

Method. Online sources such as the Office of the United States Trade Representative, the CIA online, and the Huff Post were used to retrieve information about GDP and service-based production. The World Bank was used to create the GDP graph below. The GDP numbers, based on service-based production are presented and explained. Standard of living due to the change in manufacturing to service-based...