23.1 The production (transformation) process

Question 1

Intellectual capital

Answer 1

The intangible capital of a business that includes human capital (well-trained and skilled employees), structural capital (data-base and information systems), and rational capital (good links with suppliers and customers.)

Question 2

Transformation process

Answer 2

An activity or group of activities that transforms one or more inputs, adds value and produces outputs for customers.

Question 3

What are the factors of production?

Answer 3

1) Land: The place (physical and online) where the business operates.
2) Labour: manual labor or mental skills.
3) Capital: Tools, machinery, computers, and other equipment that businesses use to produce the goods and services they sell, as well as intellectual capital.
4) Enterprise: Entrepreneurs’ decision-making skills and risk-taking qualities are essential for new business information.