Linkages

• What are backward and forward linkages in production?

  They connect different levels of production.
• What are the three levels of production?


  Primary, secondary, and tertiary.
• What is primary production?

  It involves extractive activities like farming.
• What is secondary production?

  It involves manufacturing or construction activities.
• What is tertiary production?

  It involves providing services to consumers.
• How does sugar cane relate to the levels of production?

  It is harvested (primary), processed (secondary), and sold (tertiary).
• What is an example of backward linkage?

  A sugar factory sourcing sugar cane from a farm.
• What is an example of forward linkage?

  A sugar factory selling sugar to a supermarket.
• How do linkages affect production levels?

  They connect primary, secondary, and tertiary industries.
• What is the role of a sugar manufacturer in the production chain?

  It processes sugar cane into sugar.
• How does a bakery demonstrate forward linkage?

  By selling bread to supermarkets.
• What is the benefit of backward linkages for farmers?

  They ensure a market for their products.
• How do forward linkages benefit raw material suppliers?

  They provide a market for their raw materials.
• What is a benefit of linkages for the economy?

  They save foreign exchange and create jobs.
• How does Pine Hill demonstrate backward linkage?

  By sourcing milk from dairy farmers.
• How does Pine Hill demonstrate forward linkage?

  By selling products to retailers and restaurants.
• What happens if a company lacks backward linkages?


  Supply chains become unpredictable.
• Why is it important for a business to have predictable supply chains?

  It ensures consistent production and sales.
• What is the primary production example given in the material?

  Sugar cane harvesting
• What is the secondary production example given in the material?

  Making sugar from sugar cane
• What is the tertiary production example given in the material?

  Selling sugar to restaurants and hotels
• What is the main source of income for the company discussed?

  Making juices and milk
• Why is having a backward linkage important for a company?

  It stabilizes the supply chain
• What happens if a company lacks a backward linkage?

  The supply chain becomes unpredictable
• How can backward linkages affect product pricing?


  They provide stable prices for products
• What is a benefit of having a good relationship with suppliers?

  Potential discounts and customer loyalty perks
• What is the purpose of forward linkages for a company?

  To secure a market for products
• How does having forward linkages benefit a company?

  It ensures a steady demand for products
• What is an example of a forward linkage in the context of the company?

  Contracts with supermarkets and restaurants
• What industries are mentioned in relation to linkages?

  Petrochemical industry and agriculture
• What happens to organizational structure as a business grows?

  It becomes more complex
• How does growth affect capital in a business?

  Capital intensity increases
• What is the effect of growth on labor in a business?

  More labor is recruited
• How does technology change as a business grows?

  Investment in more technology increases
• What is a potential market for businesses as they grow?

  Export markets
• What complexities arise when a business starts exporting?

  Understanding cultural differences becomes necessary
• What is a clear-cut way for a business to grow internally?

  By hiring more people
• What is an example of external growth for a business?

  Merging with another company
• How does growth affect the organizational structure of large companies?

  It leads to more departments and roles
• What is a characteristic of the organizational structure in large companies like Google?

  It has multiple layers of management