Capital good  

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Train wreck at Montparnasse (October 22, 1895) by Studio Lévy and Sons.
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Train wreck at Montparnasse (October 22, 1895) by Studio Lévy and Sons.

A capital good is a durable good (one that does not quickly wear out) that is used in the production of goods or services. Capital goods are one of the three types of producer goods, the other two being land and labour, which are also known collectively as primary factors of production. This classification originated during the classical economics period and has remained the dominant method for classification.

A society acquires capital goods by saving wealth that can be invested in the means of production. In terms of economics, capital goods are tangible property. People use them to produce other goods or services within a certain period. Machinery, tools, buildings, computers, or other kinds of equipment that are involved in production of other things for sale, are capital goods. The owners of the capital good can be individuals, households, corporations or governments. Any material used to produce capital goods is also considered a capital good.

Many definitions and descriptions of capital goods production have been proposed in the literature. Capital goods are generally considered one-of-a-kind, capital intensive products that consist of many components. They are often used as manufacturing systems or services themselves.

Examples include automated storage and retrieval systems, automatic test equipment, battleships, baggage handling systems, data centers, oil rigs, roller coaster equipment, semiconductor fabrication plants, and wind turbines. Their production is often organized in projects, with several parties cooperating in networks (Hicks et al. 2000; Hicks and McGovern 2009; Hobday 1998). A capital good lifecycle typically consists of tendering, engineering and procurement, manufacturing, commissioning, maintenance and (sometimes) decommissioning <ref>(Blanchard 1997; Hicks et al. 2000; Hobday 1998; Vianello and Ahmed 2008)</ref>. <ref name=VA> Jasper Veldman, Alex Alblas. Managing design variety, process variety and engineering change: a case study of two capital good firms. 2012</ref>

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Unless indicated otherwise, the text in this article is either based on Wikipedia article "Capital good" or another language Wikipedia page thereof used under the terms of the GNU Free Documentation License; or on original research by Jahsonic and friends. See Art and Popular Culture's copyright notice.

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