Question

Why capital intensive issue in spite of labour intensive?

Answer 1

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Answer 2

Answer:

Explanation:

Advantages of labour-intensive production

1. Staff(labour), unlike machinery can be used flexibly to meet changing levels of consumer demand, e.g. temporary workers.

2. Can provide a ‘personal touch’ and be more in-tune with customer needs and wants.

3. Can provide tailor made products / services for different customer needs and wants. Machinery is not flexible enough to provide custom made products / services for individual customers.

4. Labour can provide feedback, that provides ideas for continuous improvement. Workers can adapt to introduce new ideas.

5. Labour is always required to takeover in any event of breakdown of machinery.

Advantages of capital intensive production

1. Reduces human error – more accurate production.

2. Greater speed (efficiency) and uniform effort / output.

3. Technical economies of scale – increased efficiency which could reduce average cost.

4. No problems with labour shortages / planning labour.

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