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What are the two-factor inputs of production operations?
Labour – i.e. management, employees (full-time, part-time, temporary etc)
Capital – i.e. plant & machinery, IT systems, buildings, vehicles, offices
How can a specific business production be described as intensive?
Labour-intensive production relies mainly on labour
Capital-intensive production relies mainly on capital
What are examples of labour intensive production?
Food processing (e.g. ready meals)
Hotels & restaurants
Fruit farming/picking
Hairdressing & other personal services
Coal mining
What are examples of capital intensive production?
Oil extraction & refining
Car manufacturing
Web hosting
Intensive arable farming
Transport (airports, railways etc)
What are the main features of labour intensive operations?
Labour costs higher than capital costs
Costs are mainly variable in nature = lower breakeven output
Firms benefit from access to sources of low-cost labour
What are the main features of capital intensive operations?
Capital costs higher than labour costs
Costs are mainly fixed in nature = higher breakeven output
Firms benefit from access to low-cost, long-term financing
