Process-based industries typically involve inputs going through discrete stages of
production where at each stage the firm may employ specialised machinery with
differing capacities. Indivisibilities might then exist in the machinery at each
stage, for although you could duplicate production by purchasing additional
machines, it is not efficient to run machines at less than full capacity. To promote
efficiency, the firm would then be concerned to promote balanced production.
For instance, assume a production process with three stages, each using different
technologies such that: