Business Studies- Factors of production Flashcards
What is production?
Production involves converting the resources into goods or services. These goods and services are provided to satisfy the needs and wants of people.
Some examples of production might be:
a baker using flour, yeast, salt and water to make bread
A large manufacturer using people to assemble components to make a laptop
A dentist using dental instruments to extract a tooth
A taxi driver using a car and petrol to transport a family from their home to an airport
The four factors of production are…
land, labour, capital and enterprise.
Businesses have to manage resources effectively. They have to choose a suitable combination of materials, tools, equipment, machinery and labour for production. Some businesses use labour intensive production. This means….
that they use relatively more labour than capital. Labour intensive production is common in far eastern countries such as China where labour is cheap.
n contrast, some businesses use capital intensive production methods. This means that production relies more on the use of plant and machinery. Production in the west tends to be more…
capital intensive.
One feature of modern businesses is…
specialisation
his is the production of a limited range of goods by individual, business, region or nation. For example Coca-Cola specialises in soft drinks, Toyota makes cars and emirates provides air travel. Specialisation inside a business is also common. Departments specialise in different activities such as…
marketing, production, finance, personnel and purchasing.
Workers will also specialise in certain tasks and skills. This is called the division of labour. It also allows people to concentrate on a limited range of tasks. For example, in Construction an architect will draw up plans, a bricklayer will build walls, a roofer will lay the roof, and so on. The division of labour will increase productivity because:
Workers concentrate on the task that they do best.
Workers skills improve as they continually repeat the same task.
Time is saved because workers are not switching from one task to another.
The organisation of production is easier.
Although specialisation is likely to improve productivity, it does have drawbacks. For example, work can become tedious and boring because of repetition. Also, when one stage of production depends on another, there maybe….
delays if one stage breaks down.
