Intermediate product

Intermediate Product

An Intermediate Product is a term used in Economics and Industrial Organization to describe a product that is used as an input in the production of other goods or services. These products are not final goods, but they play a crucial role in the production process.

Definition

An intermediate product is a good or service that is used in the production process to produce other goods or services. It is not a final product, but it is used as an input in the production process. Intermediate products can be raw materials, semi-finished goods, or services that are used in the production of final goods or services.

Role in the Economy

Intermediate products play a crucial role in the Economy. They are used in the production of other goods and services, which means they contribute to the overall output of the economy. The production and consumption of intermediate products can have a significant impact on the economy's growth and development.

Examples

Examples of intermediate products include steel used in car manufacturing, flour used in baking, and electricity used in various industries. These products are not consumed by the end-users but are used in the production of final goods or services.

Intermediate Product in Supply Chain

In the context of a Supply Chain, an intermediate product is a product that is produced by one firm and then used as an input by another firm in the production of a final good or service. The firm that produces the intermediate product is often referred to as a supplier, while the firm that uses the intermediate product is often referred to as a customer.

See Also

• Final Good
• Raw Material
• Supply Chain
• Economics
• Industrial Organization