Productivity Flashcards
What is productivity?
A measure of how efficiently a process has been carried out by machinery or workers.
What is efficiency?
Using resources in such a way as to maximise the production of goods and services.
What is labour?
The amount produced per employee.
What is capital?
The money generated from assets or capital invested.
What is the calculation for productivity?
Total output/number of workers
What are the ways you can improve productivity?
-training
-implementing more effective work practices
-purchasing better equipment
What are the problems with improving productivity?
-lack of finance to pay for the improvements
-reluctance of staff to change
-claims for higher pay
What is capital intensive?
Production process requiring a large amount of investment to produce a good or service.
What is labour intensive?
Where production relies heavily on labor to produce its goods or services. Relies on people more than machinery.
What are the advantages of labour intensive?
- Highly flexible, can avoid competition with larger firms
-start up is cheap meaning there are low financial barriers
-humans can use initiative
What are the disadvantages of labour intensive?
-labour costs make up a high proportion of overall costs
-managers have to try reduce labour costs
-quality of products can vary due to the expertise of the worker
What are the advantages of capital intensive?
-less employee wages and costs
-quality can be standardised
-machines can work 24/7
What are the disadvantages of capital intensive?
-breakdowns in production can be costly
-initial set up costs are high
-inflexible, no ability to tailor products
