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- 'Capital' refers to the equipment, machinery, vehicles and so on that a business uses to make its product or service.
- Capital-intensive processes are those that require a relatively high level of capital investment compared to the labour cost.
- These processes are more likely to be highly automated and to be used to produce on a large scale.
- Capital-intensive production is more likely to be associated with flow production (see below) but any kind of production might require expensive equipment.
- Capital is a long-term investment for most businesses, and the costs of financing, maintaining and depreciating this equipment represents a substantial overhead.
- In order to maximise efficiency, firms want their capital investment to be fully utilised (see notes on capacity utilisation).
- In a capital-intensive process, it can be costly and time-consuming to increase or decrease the scale of production.
- 'Labour' refers to the people required to carry out a process in a business.
- Labour-intensive processes are those that require a relatively high level of labour compared to capital investment.
- These processes are more likely to be used to produce individual or personalised products, or to produce on a small scale
- The costs of labour are: wages and other benefits, recruitment, training and so on.
- Some flexibility in capacity may be available by use of overtime and temporary staff, or by laying-off workers.
- Long-term growth depends on being able to recruit sufficient suitable staff.
- Labour intensive processes are more likely to be seen in Job production and in smaller-scale enterprises.
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Why are some organisations capital intensive and others labor intensive?
labour intensive means use of manpower in production with little of technology while capital intensive means use of technology in production of a unit of output labour intensive means use of manpower in production with little of technology while capital intensive means use of technology in production of a unit of output
Determine factors that will influence to choice between labor intensive and capital intensive technique?
Size of the business
What conditions are necessary for production of capital-intensive goods?
Capital-intensive products, such as cars and trucks, heavy construction equipment, and industrial machinery, are produced by nations that have a highly developed industrial base. Japan is an example
What are the features of mass production?
One of the main features of mass production is the firm being highly mechanized (capital intensive), rather than the use of manual labour (labour intensive). Specialization is also another feature of mas production. make it easier to understand
Is it labor intensive or capital intensive in china?
Both
Why are some organisations capital intensive and others labor intensive?
labour intensive means use of manpower in production with little of technology while capital intensive means use of technology in production of a unit of output labour intensive means use of manpower in production with little of technology while capital intensive means use of technology in production of a unit of output
Labor-intensive and capital intensive?
Labor-intensive refers to a production process that relies more on human labor than machinery or technology, while capital-intensive refers to a process that relies heavily on machinery, equipment, or capital investment rather than on labor. Labor-intensive industries require more manual work and intensive supervision, while capital-intensive industries involve larger investments in equipment and technology.
What is the differentiate between labor and capital intensive technology?
By way of an example: Digging holes can be labor or capital intensive. You can use 1000 workers with cheap shovels (labor intensive) or 1 worker with an expensive "steam shovel" (capital intensive). Some things cannot be done either way like picking strawberries (labor intensive) or manufacturing microcircuits (capital intensive).
Determine factors that will influence to choice between labor intensive and capital intensive technique?
Size of the business
What conditions are necessary for production of capital-intensive goods?
Capital-intensive products, such as cars and trucks, heavy construction equipment, and industrial machinery, are produced by nations that have a highly developed industrial base. Japan is an example
What does working capital management encompass?
distinguish between temporary and permanent working capital?
Why is it possible for competition among firms to force down to capital intensive production?
It is possible for competition to force competitors into capital intensive production in order to compete. When a firm does this, they can gain a competitive edge over others in the industry and get more customers because their competition will have to charge more to cover the expenses.
What are the features of mass production?
One of the main features of mass production is the firm being highly mechanized (capital intensive), rather than the use of manual labour (labour intensive). Specialization is also another feature of mas production. make it easier to understand
What is the difference between commercial and intensive farming?
intensive farming is intense. It uses heavy loads of capital, work, and usual lots of pesticides and chemicals. Commercial farming is kind of the same thing its just large scale production of crops. If that makes any sense?
What is capital intensive technique?
Capital intensive technique refers to a production process that relies heavily on machinery and equipment rather than labor. This typically requires a significant initial investment in fixed assets but can lead to higher productivity and efficiency in the long run. Industries such as manufacturing, construction, and mining often use capital intensive techniques.
Is a feed mill capital intensive?
Owning a feed mill is a capital-intensive operation
Why are some organisation capital intensive and others labor intensive?
A bank or investment company would be considered 'capital intensive' , a construction company or landscaping company would be considered 'labour intensive' because they employ more people to try for the same gains.
