Business inputs, transformation, and outputs (Video notes)

Flashcards covering inputs (land, labour, capital, enterprise), the transformation process, outputs (goods, services, by-products), and related concepts with real-world examples.

What are the four inputs (factors of production) into a business?

Land, labour, capital, and enterprise.

What is the transformation process in a business?

The process of converting inputs into outputs, creating value.

What does the term 'land' refer to in the context of the factors of production?

Natural resources (oil, gold, fish, water, minerals) and the land itself.

How does the quantity and quality of land affect farming businesses?

They influence the ability to grow crops or rear livestock, with weather also impacting success.

Why is access to resources in the land important for mining or oil businesses?

They need to be near natural resources; location near resources matters.

How can the space and premises affect a business?

The amount of space affects production capacity and customer capacity; premises influence the working environment and motivation.

What determines the quantity of labour?

The number of people available to work.

What determines the quality of labour?

Skills, attitudes, willingness to work, and abilities.

Why is labour considered crucial in business success?

People contribute to the core activities (e.g., writing, acting, production) and overall success across sectors.

What is capital in the context of the factors of production?

Non-natural resources used in production, such as equipment, vehicles, buildings, and tools.

Give examples of capital equipment in a business.

Coffee machines, ovens, scanning equipment, and similar machinery.

What is enterprise?

A set of skills to develop new ideas, be creative, combine resources, and take risks; it brings together the other factors to create competitive ideas.

Who are two famous entrepreneurs mentioned as examples of enterprise?

Jack Ma (Alibaba) and Elon Musk (Tesla).

How can the choice of inputs affect costs and final product quality?

Well-trained staff may raise costs but improve service and sales; high-quality inputs can raise product quality and justify higher prices.

What are outputs in a business?

A product, which can be a good, a service, or a combination.

Define a good.

A tangible physical item that can be produced and stocked (e.g., car, laptop).

Define a service.

An intangible output that must be produced for customers when needed and cannot be stored easily.

Why can't services be stored like goods, and what problem can this cause?

Services must be produced on demand; if demand spikes, queues or waiting lists may form because they cannot be stockpiled.

What is a by-product?

A secondary output produced in the process.

What common mistake do students make about profit in relation to resources?

They treat profit as a resource; profit is the outcome of providing desirable products and covering costs.

Provide examples of companies that produce their own inputs versus buying inputs.

Tyrrells grows its own potatoes; Zara produces many materials; IKEA designs and produces its own products.