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Flashcards in Methods of production Deck (11)
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what is the method of production

it is the way the org chooses to organise the resources to make a product


what are the 2 main methods of production

labour intensive
capital intensive


what is labour intensive production

mainly human effort. tasks are complete by hand so many workers are employed


what are the reasons orgs use labour intensive

-simple tasks
-creative tasks
-personal service

e.g. food processing, hotels, fruit picking, hairdressing


what are the advantages of labour intensive production

-specific to consumer
-motivation as not repetitive tasks
-good quality
-premium price can be charges


what’s the disadvantages of labour intensive

-employee absence
-higher wages
-not fast processes
-costs can be difficult to predict so hard to set a price


what is capital intensive production

used mainly machinery and uses little workers as prossible


examples of capital production

oil extraction, manufacturing cars transport-planes, buses


what are the advantages of capital intensive production

-24/7 operations always a large quantity produce
-machinery is working faster
-machinery never lose motivation
-higher wages for specialists


what are the disadvantages of capital intensive production

-expensive set up cost
-can’t be personalised to consumer
-low worker motivation if job is repetitive


what things influence the choice of production method

-size of product
-amount of consumers
-finance available
-does the skilled staff exist