O Methods of Production

Question 1

What are the different methods of production?

Answer 1

Capital intensive production (mechanised and automated)

Labour intensive production

Question 2

Benefits of labour intensive production

Answer 2

• Items can be personalised and are bespoke, resulting in higher prices being charged
• Cheaper than capital intensive as requires no large machinery
• Motivational for employees as they are able to use their own skills and creativity

Question 3

Costs of labour intensive production

Answer 3

• Employees will be highly skilled, so wages will be higher
• Unable to make vast amount of products
• If an employee is absent, it can halt production
• Quality and accuracy of product may not be as good as something made by a machine because of human error

Question 4

Benefits of capital intensive production

Answer 4

• Machines can work 24/7, they do not need to go home or take holidays
• Can be cheaper in the long run as machines do not need wages
• Can mass produce products
• Very accurate in making identical products
• Can do dangerous tasks that safety laws prevent humans from doing

Question 5

Costs of capital intensive production

Answer 5

• Can be very expensive to set up the machinery
• Can be very expensive to maintain the machinery, especially if it breaks
• In mechanised production, employees are still required to work the machines, which can be a very boring and demotivating repetitive job
• Cant customise products

Question 6

Reasons for production method choices

Answer 6

• The volume that needs to be produced depending on the demand
• Whether it needs to be customised
• The finance available within the company
• The technology available to the organisation