Methods Of Production Flashcards
What is labour intensive production?
Products are made using labour (humans) where the cost of labour is greater than the cost of capital
What is capital intensive production?
-machines are used in production rather than humans
-automated (production using only machines)
-mechanisation(using a mix of machines and labour)
What are advantages of using labour intensive production?
-less expensive than capital
-humans can use initiative and creativity meaning greater job satisfaction
-products can be tailored to individual customer needs which means they are bespoke products
What are the disadvantages of labour intensive production?
-high risk of human error resulting in waste
-production time is limited to suit humans due to breaks and holidays
-recruitment, training and wage costs need to be considered as often highly skilled workers are needed
What are the advantages of capital intensive production?
-large volume of identical products can be made
-machinery can work 24/7
-standardised quality and accuracy
What are disadvantages of capital intensive production?
-individual requirements cant be met
-breakdowns can be costly
-lack of employee motivation
What are the advantages of capital intensive (automation) production?
-consistency
-no mistakes due to human error
-work can continue 24/7
-fewer employees required meaning reduced wage costs
What are the disadvantages of capital intensive (automation) production?
-huge investment is needed to operate production line
-breakdowns can mean production stops and material is wasted
-absence of ‘human touch’ can lead to lack of creativity
What are advantages of capital intensive (mechanisation) production?
-using machinery improves accuracy as human error is reduced
-speed sup production
What are disadvantages of capital intensive (mechanisation) production?
-humans are required to operate the machinery therefore there may be some risk of human error
-production cant be 24/7 as humans need breaks
-if machinery breaks down, the workers are idle until its fixed
What are reasons for production choice?
-the actual product being sold
-quantity of goofed required
-cost of labour
-finance available
-technology available
Explain
The actual product being sold
As a reason for production choice
-the actual product being sold —> i.e a bespoke product would require a labour intensive approach
Explain
Quantity of goofs required
As a reason for production choice
Quantity of goods required—> mass production would require a capital intensive apporach
Explain
Cost of labour
As a reason for production choice
Cost of labour—> rising labour costs could mean that a business should move to capital intensive production
Explain
Finance available
As a reason for production choice
Finance available —> large amounts of finance are required to move to capital intensive production - some businesses may be unable to afford this method
