In business, one way to understand your environment is to use the input-process-output (IPO) analysis model. The model rests on the assumption that business entities (such as firms, offices, and plants) use inputs, perform processes, and produce outputs to sustain themselves and to expand.

Inputs might include nonlabor resources, manpower, data, and money. Processes, which transform inputs into output, include functions, actions, and operations. Outputs, which are the results of processes, include products, information, and reports.

The IPO analysis model offers many advantages. Viewing a business in terms of the IPO analysis model enables seeing the interrelationships of all the activities in a business ...

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