Definition: Analysis by function
Analysis by function is intended to give a global view of the production of a unit. Some production activities are non-invoiced activities, and as a consequence are not normally recorded or measured for statistical purposes, therefore they are not appropriate for analysis by industry or by production. Analysis by function is concerned with studying all invoiced and non-invoiced activities.
In business statistics, one can distinguish between the following functions: production, buying, R&D, sales and marketing, administration, accounting, management, (internal) transport, repairs, trading, etc. These functions when they represent ancillary activities (activities rendered inside an enterprise in order to be able to carry out other activities) are generally non invoiced.
Another definition of analysis by function gathers all production activities which are related to the satisfaction of a given need. One can distinguish between the following functions: education, defence, housing, clothing, marketing, transport, accounting, trading etc. An analysis by function can therefore cover numerous industrial sectors. The aim of the analysis is to observe how a given need, for instance education, is satisfied by the various industrial sectors.
Functional analysis has generated some specific classifications: COICOP (classification of individual consumption by purpose) for household expenditure and COFOG (classification of functions of government) for governmental expenditure.