Part 2 contains an analytical representation of the production process which is useful for ascertaining the economic effects of changes in techniques and, at the same time, handle the particular characteristics of production elements and processes, such as indivisibility, complementarity and irreversibility.

In chapter 6 the features of the elementary production process are examined, using an ex-ante analytical representation, mainly based on Georgescu-Roegen's production model. In recent years this model has aroused increasing interest, because time can be included in the analysis of production (Georgescu-Roegen 1966; 1971; 1976). In particular, the Roegenian fund–flow model explains the logic of the factory system. The chief difference between the factory system and the craft production system is in reducing idle times and achieving the maximum time economy. As will emerge in the following pages, the introduction of the factory system is not a technological innovation, but an economic and organizational one, since it is independent of technology (in fact, primitive techniques can be used in a factory system). Finally, chapter 6 covers the relationship between the size of the production unit and the need to coordinate the different productive capacities of various indivisible funds, in order to reduce idle times. We shall see that the presence of indivisible funds involves an increase in the overall production level of a particular commodity, but not necessarily an increase in the scale of the single production unit. This will lead to some considerations as to the alternative between internal or external growth model of the firm.