Central Department Cycle

Systems Economics Lexicon · Activities & Resources: The Grammar

The Central Department Cycle is the Activity Cycle of the system responsible for producing that system’s own product.

In a firm’s one-level model, the Central Department Cycle is built around its central product-producing activity — the 2.2.2 department, which actually produces the firm’s product. Every other department in the cycle exists to support it: Phase 1 departments procure, transport, and store the inputs and subject resources 2.2.2 needs; Phase 2 departments design, produce, and quality-check the product; Phase 3 departments handle the resources received in exchange for it; Phase 4 departments manage the whole production process. Each phase also acts on a distinct kind of resource — Phase 1 on inputs and subject resources, Phase 2 on the product itself, Phase 3 on the product and what’s received for it, Phase 4 on everything the firm touches.

The Central Department Cycle doesn’t work in isolation. It depends on Supporting Cycles — Subject Resource Production Cycles and Input Resource Production Cycles — which exist specifically to produce the resources the Central Department Cycle’s 2.2.2 consumes. Every Economic System needs at least one subject resource from each category and at least one input, which is why there are conventionally seven of these supporting cycles even though, in practice, many different subject resources or inputs could be produced within any one category.

See also: Reoriented Activity Cycle vs. Standardized Activity Cycle · Money Sequence

Part of Activities & Resources: The Grammar, course 2 of 7 in the Locus Theory series. For the full term-by-term specification, see the Lexicon.