Labour-intensive Vs Capital-intensive
Capital-intensive
Capital - Equipment, machinery, vehicles and so on that a business uses to make its product or service.
L1 Define
Processes that require relatively high levels of capital investment compared to the labour costs.
L3 Benefits of Capital-intensive
-Allows products to be made on a large scale
- Long-term investment
L4 Limitations of Capital-intensive
-Costly
-Time-consuming to increase or decrease the scale of production
Labour-intensive
Labour - the people required to carry out a process in a business
L1 Define
- Processes that require a relatively high level of labour compared to capital investment
L3 Benefits of Labour-intensive
- Flexible (Can increase with overtime or temporary workers, or reduced by laying-off workers)
L4 Limitations of Labour-intensive
- Laying-off staff will result in high redundancy pay-offs
- Difficult to produce on a large scale
Capital - Equipment, machinery, vehicles and so on that a business uses to make its product or service.
L1 Define
Processes that require relatively high levels of capital investment compared to the labour costs.
L3 Benefits of Capital-intensive
-Allows products to be made on a large scale
- Long-term investment
L4 Limitations of Capital-intensive
-Costly
-Time-consuming to increase or decrease the scale of production
Labour-intensive
Labour - the people required to carry out a process in a business
L1 Define
- Processes that require a relatively high level of labour compared to capital investment
L3 Benefits of Labour-intensive
- Flexible (Can increase with overtime or temporary workers, or reduced by laying-off workers)
L4 Limitations of Labour-intensive
- Laying-off staff will result in high redundancy pay-offs
- Difficult to produce on a large scale