Question

In india suzuki migrated from capital intensive process concept to labour intensive concept because
a-High precision machines are available in india
b- indian labour is cheaper
c-indians cannot handle capital intensive projects
d-capital intensive processes provide flexibility.

Answer 1

Answer:

Indian labour is cheaper

Explanation:

First, let's understand the difference between capital-intensive process concept and labour intensive concept

Capital-intensive process concept is a way of production that heavily uses equipment, machinery and vehicles to product company's product. These processes can be automated most likely

Labour-intensive concept is a way of production that uses people to carry out the processes of production, manually (involvement of humans)

The word capital-intensive means long-term investment for most businesses, and the costs of financing, maintaining machinery and working out depreciation in a timely manner, is always substantial overhead. The company needs to ensure that, their invested capital is fully utilized to provide them maximum efficiency (more profits)

However, on other hand, the word labour-intensive means the people required to carry out a process or business and costs of labour are wages and other benefits, training, recruitment and so on... The company needs to ensure, the labour is utilized to produce individual/personalized products, or produce on small scale.. invested capital is very low here and flexibility in capacity is immense.

Now... why did Suzuki migrated from capital intensive process concept to labour intensive concept... It moved on because of:

• Chronic unemployment in India and cheap labour, which is more preferred for labour-intensive method.
• Suzuki is an automotive manufacturer, they need to build innovation and automation to keep their costs low. So, they opted for combined approach [capital saving & labour]
• For using Innovations, it is profitable to adopt capital-intensive techniques to increase productivity.

So, out of the available options, only option b matches with above explanation. ie. Indian Labour is cheaper.