Capital-intensive industry is an industry that requires large amounts of money and other financial resources to produce a good or service. A business is considered capital intensive based on the ratio of the capital required to the amount of labor that is required. Some industries commonly thought of as capital intensive include oil production and refining, telecommunications and transports such as railways and airlines. The advantages of capital intensive are that they reduce human error which ussualy made in labor intensive production, they also able to create greater economic of scale, they increase efficiency of production, and there’s no more problem about planning labor. The disadvantages of capital intensive are that they are expensive to buy and maintain, Lack of flexibility in responding to a fall in demand. In contrast, labour can be used flexibly, e.g. using temporary workers. Labor-intensive is industry that requires a large amount of labor to produce its goods or services. The degree of labor intensity is typically measured in proportion to the amount of capital required to produce the goods/services; the higher the proportion of labor costs required, the more labor intensive the business. The advantages of labor-intensive are Staff, unlike machinery can be used flexibly to meet changing levels of consumer demand, e.g. temporary workers, they also can give feedbacks for continous developments, and they provide personal touch to tune in customer needs and wants. There’s also some disadvantages such as labor are inefficient, they could also create problem like doing a strike, can be unskilled labor and expensive to pay them in long term than using machines I can agree that capital intensive is better than labor intensive in matter of productivity because using machines to produce goods is much more faster, efficient, cheaper in long term production, and to avoid human error, they are also very accurate which make capital intensive is bette than labor intensive in the matter of productivity
Firm’s productivity is the condition about production that efficient and effective. Capital intensive is capital or machinery more than labour. Labour intensive is the opposites of capital intensive. The labour intensive is company that has more labour than the capital or labour. That means if a company makes or decid to use capital intensive, the production in that company is more effective and efficient than company that use or decides labour intensive. Capital intensive use more machine than people, it means that production activities to be on time, the quality of production also guaranteed quality, mistake in production activity also can decrease. More machine than labour can help the time to be saved. Usually machines are faster than human. Sometimes human can’t be that accurate like machines. The quality of the product that is been made by the machines is guaranteed. The cost of using machines will be cheaper than the cost we use to employ people. For example, one machine that cost $40000 can produce 100 products per day. If use labour it can produce 50 product with the cost of one product need 2 hour to make, so one people only can make 4 product per day so we need 10 more people to work to produce the product, the wages of the worker/labour is $100 per day. So if all this is being calculated, one machine that can produce 100 products per day is more efficient than using humans that only produce 50 products per day. But there is some disadvantage of using capital or machines. Why? Because if there a single or one or tiny mistake, then it make the entire product wrong. If the capital or machines is broken, the company need to pay amount of money to repair or fix the machines. If the machines are broken, the working or the process of making the product is delayed or postpone. Every year the company must pay to maintenance the machines. They need to be daily service the machine, so it would not be broken. If there is an unexpected problem, the machines cannot decide what to do, so this are the reasons to company to employ the worker, so if the unexpected problem happen, worker can decide how to do or to solve or to adapt to this problem. If we buy many machines, it means that we need more money, because in order to buy machines, we need to pay it early. It is like prepaid expense. Prepaid expense is the company need to pay the money first than we got the machines or the things that we wanted to buy. If pay an employee, it is easier than paying a machines. If we pay an employee, we usually pay per month. For example, the cost of machine is $40000 and the wages of employee is $10000, then we need to pay the machines for $400 in the early. If labour, we can pay it in the end of the month. So, in conclusion I think that machines is needed by the company but, the employee also been needed by the company. Because if in case there is some unexpected problem, we still can do the working or process without and delayed or any postpone. If the wage increases the company is more efficient used capital intensive than labour intensive. WINSON 8A
Productivity is an economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in revenues and other GDP components such as business inventories. Productivity measures may be examined collectively (across the whole economy) or viewed industry by industry to examine trends in labor growth, wage levels and technological improvement. To produce products, there are 2 available ways, through more capital or more labour. A firm that has a production method of using more machines and equipment than human labour is considered to be a Capital Intensive Firm, while a firm that has a production method of hiring more human labour than machinery is called a Labour Intensive Firm.
Heavy capital investments on productive machinery have certain benefits than labour may not be able to offer. Machinery can run as long as there is electricity running, so those productive machines can produce goods over very long spans of time, without the need of breaks, which labour need, which also reduces the productivity. Machinery also has the ability to produce goods faster, and more efficiently, as they can do their tasks faster than human labour can. Economies of scale can be gained by using many productive machines, so the production costs of natural resources can be reduced significantly, hence making more profits, assuming the firm is receiving the same amount revenue. As machines can benefit from economies of scale, it can also provide a long term profit gains, partially because machines can’t go on strike, or wants a raise in wage like labour does, but machines need electricity which keeps getting more expensive. Labour needs rest as they are humans and needs rest, but resting can be a disadvantage for the firm as it decreases its productivity. As said earlier, productivity is the amount of output per time, that means the more time it needs to produce the same amount of output, the less productive it is, which can decrease production, and reduce revenue and ultimately profits.
While it may seem that capital intensive firms can be more productive, it has some disadvantages. It is very difficult for a firm to produce goods solely using machines, as they need manual help which only humans can do, but those manual tasks tend to be very boring for the worker and may be dissatisfied. A labour intensive firm may have many human workers doing specific tasks, but they can talk to each other and may reduce their boredom, but when working with machines, the workers may feel lonely, further increasing their job dissatisfaction. If a labour intensive firm wishes to change into a capital intensive firm, they may need to unemploy many workers which may increase unemployment in the region. And those workers that are needed to help the machines need retraining on how to fix the machines or do their tasks properly, which may cost a significant amount of money. Even though being capital intensive may increase long term profits, it may decrease short term profits, as the amount of capital needed to be invested on machines are very huge, and also the costs of electricity, and takes a long time to break even. Lastly, more machines and equipments require a significant amount of space, as productive machines are generally big in size, the firm may need to expand their premises for production (factory) so that the new machines can fit into it, and purchasing more land costs a very huge amount of money.
To conclude what we have discussed, capital intensive firms may produce more goods faster, more efficient, and can reach economies of scale than human labor which may go on strikes and ask for a raise. But the machines and equipment needed by capital intensive firms require a huge amount of capital and money, but may increase productivity and long term profits. Ivan Alexander 8A
First of all, organising production is where activities of manufacturing is involved. With organising production, can create utility, which is the want satisfying power of a commodity or services. There are some input that involved in organising production, which is the factor of production. Land, the factor cost is rent. Labour the factor cost is wages. Capital, the factor cost is interest. And the last is entreprise, the factor cost is profit. There are two methods of production, labour intensive and capital intensive, which can effect the profit, loss, sales revenue, and self satisfaction. Labour intensive means that they use worker, while capital intensive is when they use machinery, vehicle, etc.
Capital intensive, is means that the company or the business is employ relative few workers instead use machinery and computer to autoate their production, while labour intensive means that the company is require a lot of workers but use relative little capital. It is true if capital intensive is better than labor intensive, beside better than labor, capital intensive also bring advantage for the business. They both are the method for the business to organized their production. Capital intensive also more productive than labour intensive. It is all because when our business choose to use the capital intensive method, we will require a lot of capital, where we will use more machinery than worker, it will bring benefit because with machinery, our process of production will be faster, which means that we will also produce more products, or in other words we will produce in large scale (large number of production). With capital intensive we only need to pay once for the machinery, because machinery is fixed cost. Fixed cost means that the cost of producion will remain the same at every output level.
Against the statement above, we can see that there are several advantage of using capital intensive for out business, they will increase the number of production and can make the business increase it’s productivity. Because, more technology machine also can help to increase the productivity of a business. Capital intensive means using machinery, and machinery is fixed cost, so it can help us to reduce our cost because we only need to pay once and we can use the machine every day, but the price of the machine never change. If we get so many profit, the price of the machine that we already buy before will never be change. While when we use labour intensive, we need to pay it over and over again, the example is electricity and worker, we need to pay the electricity every month, and it can change at different output level, when we use more electricity we need to pay more. We also need to pay worker every month ,and if one day one of the worker mamke our business become successful, we need to pay them more or increase their wages, and if there’s someone that make our business loss, we need to reduce their wages. This case can show that labour intensive have variable cost whcih means that they can change overtime. So, we can see that labour intensive is not better than capital intensive when doing our business production or organization.
To conclude, capital intensive is better than labor intensive when doing our production in a business. Because capital intensive can reduce our cost, because they are fixed cost and we only need to pay once for the machinery, while labour intensive is variable cost, which can make them to pay for several times, example is the electricity, they need to pay it every month. Capital intensive is using machine, they can produce goods faster rather than use labour intensive, which can make them to produce goods in large scale of production, which means that they are produce in large number of production.
Capital Intensive is an industry requiring large sums of investment in purchases, maintenance, and also amortization of capital equipment, or a business which has less worker but more capital. The example of capital intensive industries is steel industry and petroleum industry. Capital intensive tend to increase the firm’s productivity compared to labour intensive in many reasons,labour intensive is an industry that prefers hiring more workers than having many capitals, for example, capital intensive can produce 300 goods in a day but labour intensive can only produce 150 goods, there are big difference produced in the amount of the goods. But, being capital intensive don’t always have benefit,they have both advantages and disadvantages to the industry.
There are some advantages by using more capital.First,it can cause benefits for the industry as it reduces human error, this means that more accurate product is produced and it avoids and prevents general mistakes that are usually caused by workers,so it lower the risks of having problem in producing the goods. In that way, there will be a decrease in the amount of waste produced which means that it higher the profit for the industry. Then, capital intensive easily adopt to change compared to labour intensive because it suits modern trends during the production due to flexibility they have. Some people aside industry like farmers use this method as it is associated with the high level of output, meaning, the act or process of producing goods, they choose this because it has higher technology and trusted when running the production. Aside from having benefits in the industry alone, it is very useful for countries especially less developed countries so that they can increase their pace of developments.
Against the statement above, the disadvantage is that it will cause some impacts for the workers, less workers are needed as they have higher technologies for example, before 10 workers are used in a machine but now only 2 workers are used so, unemployment will increase in that place, but if it is labour intensive, more numbers of workers will be hired, both skilled and unskilled workers and it provides job for the people like the poor people so they can fulfill their needs. Second, when an industry have many capitals, running the cost of production will be higher such as the bills because all of the productions depend on the electricity which sometimes it effects the profit, also labour intensive is cheaper in cost as capitals are expensive to buy, high maintenance cost and costs to train the employees to use the equipment and some industries like beginner or new industry may not afford it.
Capital intensive have more benefits in reducing human errors, adopt to change quickly and developments for the country itself compared to labour intensive.While the disadvantages are increase in unemployment and higher cost of productions.So, in conclusion to this, capital intensive is far better than labour intensive to increase the firm’s productivity as more benefits are shown in using the capital in the industry.
Capital intensive is an Industry requiring large sums of investment in purchase, maintenance, and amortization of capital equipment, such as automotive, etc. And Labour intensive is Industry or process where a larger portion of total costs is due to labor as compared with the portion for costs incurred in purchase, maintenance, and depreciation of capital equipment. And sometimes large company or firms are choosing capital intensive rather than labour intensive, because it will make more advantages for a large firm which they use capital intensive.
Its stated that capital intensive is better than labour intensive to increase a firm's productivity because many firms which they more prefer to use capital intensive rather than labour intensive, because if a firm who use capital intensive, it may be an advantages for them because if they use capital intensive, they will use more machines less than workers, because sometimes machines are low cost and it works faster than people. Such as, if a firm who uses robot, it would be an advantage for them because robots work quickly and more efficient, and it may increase more customers and the firm will get many advantages and they can increase their productivity more and they can increase their profit.
Second, if they use capital intensive, it will reduce human errors at the time they work compared to robots, because robots have less errors rather than human. Because they have been controlled by the firm, but workers are don't. So if a firm uses labour intensive, it may be a disadvantages for them if their workers are have mistakes when they do their work. There are many disadvantages for firms which they use labour intensive rather than capital intensive ; Bankrupty, liabilities, and others. So if they reduce human errors by using capital intensive, they may get more advantages which they can increase their profit, sales revenue, customers, etc.
Third, they may give out small amount of money, so if they use capital intensive, they don't have to spending a lot of money because using robots or machines, it will take less risks, and low cost. Because if they use labour intensive or which they employ workers, they have to spend a lot of money. So its an advantages for large firms if they use capital intensive because they do not have to spend a lot of monay and they can increase their productivity.
There are also disadvantages for firm which they use capital intansive rather than labour intensive, such as when the first time they built their firm, it will be a disadvantage for them because they have to spend a lot of money to buy good quality of machines to provide good quality of goods and services, so its catagorized into a disadvantages.
In a conclusion, capital intensive is better than labour intensive to increase a firm's productivity because if a firm uses more capital intensive rather than labour intensive, it may took more advantages rather than disadvantages. And it may took more efficiency for a firm which they use capital intensive because it may reduce human errors and quick services without any mistakes or errors compared to labour intensive.
Labor intensive means the company has more workers than machines or man made resources. Usually company that uses labor intensive is manufacturing industry, such as fashion industry. Human or workers useful in giving ideas and inovation to the industry. Capitar Intensive means the company has more machine than workers. Examples are coca cola , pepsi, sprite. That factories uses more machines to achive the target of production and to fullfill the costumer order. Sometimes capital intensive is more efficient than labor intensive. Usually human or workers are needed by company to control and monitor about the prodution progress. The risk of the production changing of the enviroment.
Capital intensive needs higher cost at the first time of opening the company than the labor intensive but if we calculate specifically , we will relise that capital intensive is cheaper than labor intensice, because they need to pay the salaries, wages ,annual bonus, fringe benefit, train the workers, and other expenses to built an enjoyable enviroment. More machine and man made resources also making the company reduce the cost of an error product better the machine, the quality of the product is better.Capital intensive is an invest for the company because longer its used, company will feel the benefit more.
Sometimes machines or man made resources can have an error problems. The error problem of man made resources can pospone the production activity or make the production stop for a while, or decrease productivity. If these things happens, the distribution path for this product will be disturbed. So the company will be ready to face the risk of losing consumers. Human is needed to give solution to face the sudden error. Human is needed to detect the risk of the problems and also to prevent do the same mistakes twice.Capital intensive also need a lot of fund, so the small company cant buy the man made resources to maintain the machine and man made resources, company must spend expenses such as repair expense, maintenance expense, expense that must paid to trained the worker to those who will take care and use the machine as well.
Supposely in the company, the sum of the machines and the sum of the workers must be the same or balance , so when company needs a lot of product to be produce machines will handle that, if company needs human or workers that can give a solutions to help the company from the risk of enviroment , but many companies prefer capital intensive rather than labour intensive because they think that capital intensive is more efficient and more helpful for the company to reduce costs and making profit.
IN CONCLUSION,there are some benefits if a company use capital intensive, because capital intensive is more efficient , effective , and ability to make profit capital intensive is a part of company investment , so the investment will give more benefits than labor intensive that makes more expense for the company, but human or workers still needed in the company
Capital intensive is an industry requiring large sums of investment in purchase, maintenance, and amortization of capital equipment, such as automotive, petroleum, and steel industry. Capital intensive industries need a high volume of production and a high margin of profit ( as well as low interest rates ) to be able to provide adequate returns on investment.
On the other hand, labour intensive is an industry or process where a larger portion of total costs is due to labour as compared with the portion for costs incurred in purchase, maintenance, and depreciation of capital equipment. Agriculture, construction, and coal mining industries are examples of labour intensive industries.
It is said that firms with more than 50 workers are called to be labour intensive ( more labour than machines / capital ), and firms with more than 50 machines are called to be capital intensive ( more machines / capital than labour ). But it is not always true, some firms just need it.
There are both advantages and disadvantages of both capital intensive and labour intensive. Now I will discuss about labour intensive first. The advantages of labour intensive are providing jobs to the local economy, doesn’t require extensive start up investment in machinery for example, and doesn’t required additional fixed costs. It does not require extensive start up investment because they need more workers than machines ( capital ). It has a high labour or output ratio.
But there are also some disadvantages like human errors, and potential to be a slower method of production compared to a machine based production line. Human errors can result in mistakes, and machines don’t, and it is a slower method of production. By this, we already know that capital intensive is better to increase firm’s productivity. Maybe that’s the reason many businesses do factor substitution, which is the process of shifting production technology from labour to capital.
It’s true that capital intensive is better than labour intensive to increase firm’s productivity. There are also disadvantages of capital intensive, but it’s not related with firm’s productivity. Those disadvantages are workers may get bored with their job, need to retrain workers or managers, profit will decrease in short term, and may need to build or find a bigger building for machinery. It’s true that workers may get bored with their job because all things were made by the machines.
One of the advantages of capital intensive is increased productivity. Because if there are more machines, of course the production will be more than if there are more workers than machines. Other advantages are more profit in long term, benefit from economies of scale, and cheaper ‘labour’. There will be a decrease in profit for the short term, but it will increase again in the long term.
In conclusion, capital intensive is better than labour intensive to increase firm’s productivity, because it is more in manufacturing. Labour intensive are better than capital intensive in business such as restaurants, hotels, or other business that needs services. But in this case, capital intensive is better to increase a firm’s productivity. Audrey 8A
Capitals are equipments used by businesses to produce goods and services. While labour intensive are goods and services produced by labours or by people. Labour could be as employment or workers that produces goods and services. Capitals are like machines and premises that would produce the goods and production by equipments or they are equipments owned by a business to do production. I think capital intensive are better than labour intensive because capital intensive produces goods and services by machines and computers which makes the production faster and more precise because they are already programmed.
Capital intensive is better to increase a firm’s productivity because by having machines and computer the calculation and the productivity would be very accurate and precise because they are programmed and there would be no mistake in producing the product. Also by having this capital intensive the cost would be only the interest and the fixing cost and the cost of the capital while if it is labour intensive, the firm would have higher cost because they need to pay the wages and the facilities for the worker. Labour intensive would make the production not accurate and precise because human makes mistakes, which would make some mistakes in producing the product and they need to hire many workers and the production would be slower or the productivity would decrease because human needs rest and they make mistakes and they couldn’t be programmed to be very precise and the production of handmade is surely to be slower than capital intensive. But by having the labour intensive means that there are only few workers or employments which makes the employer or workers hired are specialized worker, which makes it more efficient and the production would be even faster.
But if using the capital intensive the production would always be the same and no difference because they are programmed with no mistakes and produces goods and services to what they are programmed or controlled. Which while labour intensive they could make different types with unique products or production. By having products produced by handmade or labour intensive with different or unique goods and services would make the price of the product higher because it is different from others, for example Rolls-Royce. By having capitals or machines doing the production, it would of course have higher risk on creating fire. Also by having machines doing all the work or production, would make more unemployment because there are only needed few or less workers because most of the production are by the machines. And capitals would have depreciation of their value by the time the capital used.
So, capital intensive would be having more increase in the productivity of a firm rather than labour intensive because the goods and services are produced by machines that are programmed to produce goods and services with no mistakes or with precision and accurate production. And because they are machines, they are easier to be controlled and the cost of production would be less rather than the labour intensive because the cost is only the interest, the cost of running the capital, and the cost of buying the capital, meanwhile labour intensive have higher cost to pay the wages, the mistakes done by the worker, and more. Brian.A 8A
To increase an productivity of a firm they will need to choose the best and the most efficient way so it can be beneficial for the firms where they can easily earn profit. There's two types where some firms use to increase production 1. Capital-intensive 2. Labour-intensive. Capital intensive is where the firms use more capital than the labour to produce the goods, if a labour-intensive is a firm where they use more labour than the capital. Capital-intensive will usually have a lot more production because machines can work non-stop but worker have a limited time to produces the goods but if your firm use a capital-intensive it will cost a lot of money to pay the electricity and the other material that will be need to turn on/start the machines so the raw materials can be manufactured so its ready to sell at the market. But by using a labour-intensive it can be more beneficial but the production rate is not as many as producing with machine and high technology. The advantages of using an capital-intensive is more accurate and more efficient to produce a goods that really need a specific details it can be done by machines accurately but if a worker did that there is maybe an error. The disadvantage of using a capital-intensive is the cost of production maybe high and maybe the revenue cost is lesser than the production cost which causes a loss for the business.
The conclusion, is that the production will increase if we use more capital than labour work so the firm that use more capital will increase production even it cost a lot more just to produce a single goods.
Productivity can be defined as a ratio between the output volume and the volume of inputs. In other words, it measures how efficiently production inputs, such as labour and capital, are being used in an economy to produce a given level of output. Capital intensive firms and labor intensive firms differ in the way they employ factors of production. A firm is said to be capital intensive if it requires heavy capital investment in buying assets relative to the level of sales or profits that those assets can generate. Production processes in capital intensive firms are often automated in order to perform mass production. In contrast, labour intensive firms are firms which the main cost is that of labour, and it is high compared to sales or value added. In short, determining if a firm is capital intensive or labour intensive depends on the capital-labour ratio. The capital-labour ratio is the ratio of the amount of capital to amount of labour, used to produce any given output. If that ratio is high, indicating the use of much capital relative to labour, production is called capital-intensive. If the ratio is low indicating relatively little capital per unit of labour, production is called labour-intensive.
Capital intensive firms are characterized by their use of machinery as the main production method. Machinery can produce goods without rest as long as there is an electricity supply to keep it running, excluding the occasional maintenance. Human labour, however, requires rest. Not allowing workers to rest might be considered labour abuse and trade unions can sue the firm for it. Therefore, production with machines may be more effective, as they can work beyond human working hours. Using capital intensive production methods may also reduce the errors made by labour. Machines and robots are accurate, unlike humans who can make mistakes in producing goods. Machines can also produce at a faster pace than humans, hence saving time for production of items. Increasing the number of goods produced and decreasing the time needed to run production processes would increase productivity, as productivity is calculated by dividing amount of goods manufactured by the total number of hours to produce those goods. It has been argued that labour-intensive methods are difficult to adjust to changes, as humans themselves are not accustomed, or even dislike, change. However, capital-intensive production can easily adapt to modern trends of production. The ultimate reason why capital-intensive production is likely to increase productivity is because this method of production may achieve economies of scale by mass production. More goods can be produced, cost per unit becomes lower, and profit may rise in the long term, assuming that all goods are sold and prices remain the same or higher. Labour-intensive production are sometimes disadvantageous when there is lack of skilled workers. It is difficult to produce good quality products without skilled labour, unlike machines. Labour may also have a relatively inefficient and inconsistent level of effort. Some workers are lazy, and have no motivation to work. The last disadvantage labour-intensive production methods is that disputes between workers are highly possible, and workers may go on strikes, halting production activity. All these will decrease productivity.
It may seem like a bright future if all firms start using capital-intensive production methods instead of labour-intensive ones, but in truth, it is not. To start with, capital goods are scarce and expensive to buy and run. Profits in the short term may fall drastically, due to the large amount of costs spent in setting up the machinery. In developing countries, machines might not be available in the market and may have to be imported with soaring taxes. Firms may also need to expand their premises in order to house the large machinery, which would further increase expenditure. Due to these reasons, small firms are reluctant to use capital-intensive production processes and instead opt for the easily available labour-intensive production. Labour, notably in developing economies, may be cheaper than capital. Employing labour would also reduce unemployment, which will boost the wealth of the people in the area. Assuming that the propensity to consume increases, more goods and services will be demanded, which will result in economies of scale. Labour may provide customers products with a ‘personal touch’, or custom made products. Machinery is not flexible enough to provide these services. Workers are also able to give feedback that provide ideas for further improvement. Workers may also introduce ideas, unlike machines, which lack initiative. Machines cannot be innovative, create new production ideas, or take on more responsibilities.
In summarization of the above information, capital intensive and labour intensive production methods have their own advantages and disadvantages, and must be used together in order to achieve efficient production and to increase productivity.
Source: http://chrisagbe.hubpages.com/hub/capital-intensive-labour-intensive-methods-production, with changes
A Capital-intensive company is a company that uses mostly machines to produce goods and services.A labor-intensive company is a company that uses human workforce or labor to produce goods and services.Both are productive and both are fine, but 1 must be the better one.
A Capital-intensive company would be able to produce more goods and services and they would more likely be more productive than a labor-intensive company because machines has less weaknesses.They are very hard workers, you won't need to force them to work and be as productive as they could be.Unlike humans, some of them are just so lazy to work,thus some humans just won't be as productive as machines.Also machines don't rest that often,humans will need to rest for quite a long time after work.But machines don't really need much rest and they could work for the whole week while humans work for only 5-6 days in a week.Based on output, 1 machine could produce more goods than 1 human can,so surely they could produce more. As a robot, you won't need lunch breaks or that kind of breaks,while humans are having breaks robots would still continue producing,they can really exceed our expectations.Also some people said that humans created machines,thus humans are better than them.This can be true, but only some very skilled and smart humans are better than machines,and they would require a lot of money to hire,a normal human can't really beat a machine in terms of producing.Most people said that taking care of machines is a hard work to do, well so is taking care of humans and supervising humans.In order to make humans work for you happily,you will need to provide them benefits and you'll need to reward them with presents,but you won't need to feed robots presents to make them maximize their production.
But,sometimes a capital-intensive company is just not as advantageous and productive as labor-intensive companies.Keeping machines would be more dangerous rather than keeping humans because machines can really cause a disaster, they could burn the whole place and they could destroy your factory and endanger your life.Machines also need a lot of supervision and you will need to spend a lot of money to take care of a machine and to make it perform well,you need to fix it regularly and it will cost you a lot of money. Machines are also very expensive to buy,hiring an employee is cheaper than buying a machine.Humans can also be more productive than machines. If you give them a really big salary, they would work really hard to produce more and more products for the sake of your company, you just need to give them prizes and they would be very motivated in doing their job.Humans also perform very well and they could create better results than machines.Because some machines have technical problems and humans rarely have them.Hand-made goods are always more expensive than machine-made goods.
So the conclusion is that even if machines have a lot of problems,they cost too much,and even if they can endanger you,they're very productive and they could really increase your productivity.
To produce goods for the business to sell to the customer they need 4 factors of production they are labor, capital, entrepreneurship, and land. If one from the four factor of production is eliminated they cannot produce any goods. They must have four factor of production to produce goods to sell. There are some example of the factor of production like labor is the people who work in the factory or workshop. They need many labor to work to make the work easier. The example of the capital is the machines and the equipment in the factory or workshop there are cost of production for are the cost of electricity, the cost of water and many more cost that the owner need to pay. The example of the factor of production for labor is the employee, engineer, and the delivery boy. The cost of the labor is the wages of the labor or employee. The example of factor of production land is the land used for build the factory. The cost is the cost of land the owner need to pay to open the factory there. The other example of factor of production entrepreneurship is the entrepreneur who lead the business and take risk of the business. The cost of it is the energy of the entrepreneur, ideas and so on. In the business point of view, the capital intensive company is the company that use more technology/ machine in the company than using the human power. The example of capital intensive company is the car manufacturer (except rolls Royce), and the food packaging company. The labor intensive company is the company use more labor than the technology or capital of the company. The example of the labor intensive company is the food factory, the toys factory, and so on. The capital intensive company maybe can produce more goods then the labor intensive company because in the capital intensive company they use technology like robots and machine that can work 2 times more faster than human because robots have more hands than human and human only have to hands use for work. The capital intensive company no need to employ more employee because they have a force of robots to do the jobs that the owner say. The labor no need to work very hard because their job is done by the robots but there are some disadvantage for the labor because they may get unemployment . the machines or robot can save more times for the company because their hand is faster than the human. The other advantages are the boss no need to pay more for the employee and they can save more money. The owner just need to pay for the fixed cost of the robot. The point against the statement are; the company need to pay more for the electricity cost because the robot use more electricity than the human. The people may get bored because the robot just only can do the same work. If the owner want the robot do the other thing the owner need to upgrade or buy a new robots to do the job and its expensive. The conclusion is that the capital intensive company need to pay for the fixed cost because the machines only need the same amount of cost.
Productivity can be measured by output per unit of input. There are two methods of production, first is labor intensive and second is capital intensive. Labor intensive can be defined where the company has more workers than man-made or machine resources. And capital intensive can be defined where the company has more machine or man-made resources than workers. These methods are depending on several things. First is the size of the company. Second is the cost of factors of production. And third is the product itself. We can say that capital intensive is better than labor intensive to increase firm’s productivity because of some reasons. Labor-intensive businesses require a relatively high level of labor compared to capital investment. It is hard to manage labor than manage capital investment; their briefing everyday, and sometimes they make mistakes and forget things easily; also the labor cost is hard to manage sometimes, due to the economics problems. As we have seen lately, there are demos for asking for raises. Also, highly automated and efficiency. This process leads to a highly automated more and more likely to produce goods in larger quantities. Then it is because capital-intensive production is easier to be connected with the production flow. Also it is because their flexibility. It is easily to be suit with the modern trends nowadays. On another hand, as more capital is used, labor productivity increases but at the same time, employment in industries fall. It increases unemployment, and can hurt economic growth. Also capital intensive leads to urban-rural migration because the capital equipment and capital-intensive methods are found in urban areas, because of that happens, more employment and social facility found in urban areas, and make migration to urban areas. This makes urban areas that crowded become more crowded. Then, the labor intensive methods are employed, many unemployment labors nowadays in most economies will employ. This will solve the problems in unemployment, and there are more goods and services will demand and the results will be in economies of scale. Also, for unskilled people, we can pay them cheap and can lead to reduce the cost of production. As we can see for capital intensive, it’s hard because there are fewer developing countries and the expensive of the capital investment. On conclusion, we can say that capital intensive is better than labor intensive to increase firm’s productivity in some reasons, however on another hand there are some disagreements because it can affect the unemployment, and economic growth, urban-rural migration, achievement of economies of scale in labor intensive, results in demand, and reducing the cost of production in labor intensive. Also, in order to achieve sustainable economic development, it is important that we should have the both methods.
Capital-intensive industry is an industry that requires large amounts of money and other financial resources to produce a good or service. A business is considered capital intensive based on the ratio of the capital required to the amount of labor that is required. Some industries commonly thought of as capital intensive include oil production and refining, telecommunications and transports such as railways and airlines.
ReplyDeleteThe advantages of capital intensive are that they reduce human error which ussualy made in labor intensive production, they also able to create greater economic of scale, they increase efficiency of production, and there’s no more problem about planning labor. The disadvantages of capital intensive are that they are expensive to buy and maintain, Lack of flexibility in responding to a fall in demand. In contrast, labour can be used flexibly, e.g. using temporary workers.
Labor-intensive is industry that requires a large amount of labor to produce its goods or services. The degree of labor intensity is typically measured in proportion to the amount of capital required to produce the goods/services; the higher the proportion of labor costs required, the more labor intensive the business.
The advantages of labor-intensive are Staff, unlike machinery can be used flexibly to meet changing levels of consumer demand, e.g. temporary workers, they also can give feedbacks for continous developments, and they provide personal touch to tune in customer needs and wants. There’s also some disadvantages such as labor are inefficient, they could also create problem like doing a strike, can be unskilled labor and expensive to pay them in long term than using machines
I can agree that capital intensive is better than labor intensive in matter of productivity because using machines to produce goods is much more faster, efficient, cheaper in long term production, and to avoid human error, they are also very accurate which make capital intensive is bette than labor intensive in the matter of productivity
Firm’s productivity is the condition about production that efficient and effective. Capital intensive is capital or machinery more than labour. Labour intensive is the opposites of capital intensive. The labour intensive is company that has more labour than the capital or labour. That means if a company makes or decid to use capital intensive, the production in that company is more effective and efficient than company that use or decides labour intensive. Capital intensive use more machine than people, it means that production activities to be on time, the quality of production also guaranteed quality, mistake in production activity also can decrease.
ReplyDeleteMore machine than labour can help the time to be saved. Usually machines are faster than human. Sometimes human can’t be that accurate like machines. The quality of the product that is been made by the machines is guaranteed. The cost of using machines will be cheaper than the cost we use to employ people. For example, one machine that cost $40000 can produce 100 products per day. If use labour it can produce 50 product with the cost of one product need 2 hour to make, so one people only can make 4 product per day so we need 10 more people to work to produce the product, the wages of the worker/labour is $100 per day. So if all this is being calculated, one machine that can produce 100 products per day is more efficient than using humans that only produce 50 products per day.
But there is some disadvantage of using capital or machines. Why? Because if there a single or one or tiny mistake, then it make the entire product wrong. If the capital or machines is broken, the company need to pay amount of money to repair or fix the machines. If the machines are broken, the working or the process of making the product is delayed or postpone. Every year the company must pay to maintenance the machines. They need to be daily service the machine, so it would not be broken. If there is an unexpected problem, the machines cannot decide what to do, so this are the reasons to company to employ the worker, so if the unexpected problem happen, worker can decide how to do or to solve or to adapt to this problem. If we buy many machines, it means that we need more money, because in order to buy machines, we need to pay it early. It is like prepaid expense. Prepaid expense is the company need to pay the money first than we got the machines or the things that we wanted to buy. If pay an employee, it is easier than paying a machines. If we pay an employee, we usually pay per month. For example, the cost of machine is $40000 and the wages of employee is $10000, then we need to pay the machines for $400 in the early. If labour, we can pay it in the end of the month.
So, in conclusion I think that machines is needed by the company but, the employee also been needed by the company. Because if in case there is some unexpected problem, we still can do the working or process without and delayed or any postpone. If the wage increases the company is more efficient used capital intensive than labour intensive.
WINSON 8A
Productivity is an economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in revenues and other GDP components such as business inventories. Productivity measures may be examined collectively (across the whole economy) or viewed industry by industry to examine trends in labor growth, wage levels and technological improvement. To produce products, there are 2 available ways, through more capital or more labour. A firm that has a production method of using more machines and equipment than human labour is considered to be a Capital Intensive Firm, while a firm that has a production method of hiring more human labour than machinery is called a Labour Intensive Firm.
ReplyDeleteHeavy capital investments on productive machinery have certain benefits than labour may not be able to offer. Machinery can run as long as there is electricity running, so those productive machines can produce goods over very long spans of time, without the need of breaks, which labour need, which also reduces the productivity. Machinery also has the ability to produce goods faster, and more efficiently, as they can do their tasks faster than human labour can. Economies of scale can be gained by using many productive machines, so the production costs of natural resources can be reduced significantly, hence making more profits, assuming the firm is receiving the same amount revenue. As machines can benefit from economies of scale, it can also provide a long term profit gains, partially because machines can’t go on strike, or wants a raise in wage like labour does, but machines need electricity which keeps getting more expensive. Labour needs rest as they are humans and needs rest, but resting can be a disadvantage for the firm as it decreases its productivity. As said earlier, productivity is the amount of output per time, that means the more time it needs to produce the same amount of output, the less productive it is, which can decrease production, and reduce revenue and ultimately profits.
While it may seem that capital intensive firms can be more productive, it has some disadvantages. It is very difficult for a firm to produce goods solely using machines, as they need manual help which only humans can do, but those manual tasks tend to be very boring for the worker and may be dissatisfied. A labour intensive firm may have many human workers doing specific tasks, but they can talk to each other and may reduce their boredom, but when working with machines, the workers may feel lonely, further increasing their job dissatisfaction. If a labour intensive firm wishes to change into a capital intensive firm, they may need to unemploy many workers which may increase unemployment in the region. And those workers that are needed to help the machines need retraining on how to fix the machines or do their tasks properly, which may cost a significant amount of money. Even though being capital intensive may increase long term profits, it may decrease short term profits, as the amount of capital needed to be invested on machines are very huge, and also the costs of electricity, and takes a long time to break even. Lastly, more machines and equipments require a significant amount of space, as productive machines are generally big in size, the firm may need to expand their premises for production (factory) so that the new machines can fit into it, and purchasing more land costs a very huge amount of money.
To conclude what we have discussed, capital intensive firms may produce more goods faster, more efficient, and can reach economies of scale than human labor which may go on strikes and ask for a raise. But the machines and equipment needed by capital intensive firms require a huge amount of capital and money, but may increase productivity and long term profits.
Ivan Alexander 8A
First of all, organising production is where activities of manufacturing is involved. With organising production, can create utility, which is the want satisfying power of a commodity or services. There are some input that involved in organising production, which is the factor of production. Land, the factor cost is rent. Labour the factor cost is wages. Capital, the factor cost is interest. And the last is entreprise, the factor cost is profit. There are two methods of production, labour intensive and capital intensive, which can effect the profit, loss, sales revenue, and self satisfaction. Labour intensive means that they use worker, while capital intensive is when they use machinery, vehicle, etc.
ReplyDeleteCapital intensive, is means that the company or the business is employ relative few workers instead use machinery and computer to autoate their production, while labour intensive means that the company is require a lot of workers but use relative little capital. It is true if capital intensive is better than labor intensive, beside better than labor, capital intensive also bring advantage for the business. They both are the method for the business to organized their production. Capital intensive also more productive than labour intensive. It is all because when our business choose to use the capital intensive method, we will require a lot of capital, where we will use more machinery than worker, it will bring benefit because with machinery, our process of production will be faster, which means that we will also produce more products, or in other words we will produce in large scale (large number of production). With capital intensive we only need to pay once for the machinery, because machinery is fixed cost. Fixed cost means that the cost of producion will remain the same at every output level.
Against the statement above, we can see that there are several advantage of using capital intensive for out business, they will increase the number of production and can make the business increase it’s productivity. Because, more technology machine also can help to increase the productivity of a business. Capital intensive means using machinery, and machinery is fixed cost, so it can help us to reduce our cost because we only need to pay once and we can use the machine every day, but the price of the machine never change. If we get so many profit, the price of the machine that we already buy before will never be change. While when we use labour intensive, we need to pay it over and over again, the example is electricity and worker, we need to pay the electricity every month, and it can change at different output level, when we use more electricity we need to pay more. We also need to pay worker every month ,and if one day one of the worker mamke our business become successful, we need to pay them more or increase their wages, and if there’s someone that make our business loss, we need to reduce their wages. This case can show that labour intensive have variable cost whcih means that they can change overtime. So, we can see that labour intensive is not better than capital intensive when doing our business production or organization.
To conclude, capital intensive is better than labor intensive when doing our production in a business. Because capital intensive can reduce our cost, because they are fixed cost and we only need to pay once for the machinery, while labour intensive is variable cost, which can make them to pay for several times, example is the electricity, they need to pay it every month. Capital intensive is using machine, they can produce goods faster rather than use labour intensive, which can make them to produce goods in large scale of production, which means that they are produce in large number of production.
vienetta christina 8A
Capital Intensive is an industry requiring large sums of investment in purchases, maintenance, and also amortization of capital equipment, or a business which has less worker but more capital. The example of capital intensive industries is steel industry and petroleum industry. Capital intensive tend to increase the firm’s productivity compared to labour intensive in many reasons,labour intensive is an industry that prefers hiring more workers than having many capitals, for example, capital intensive can produce 300 goods in a day but labour intensive can only produce 150 goods, there are big difference produced in the amount of the goods. But, being capital intensive don’t always have benefit,they have both advantages and disadvantages to the industry.
ReplyDeleteThere are some advantages by using more capital.First,it can cause benefits for the industry as it reduces human error, this means that more accurate product is produced and it avoids and prevents general mistakes that are usually caused by workers,so it lower the risks of having problem in producing the goods. In that way, there will be a decrease in the amount of waste produced which means that it higher the profit for the industry. Then, capital intensive easily adopt to change compared to labour intensive because it suits modern trends during the production due to flexibility they have. Some people aside industry like farmers use this method as it is associated with the high level of output, meaning, the act or process of producing goods, they choose this because it has higher technology and trusted when running the production. Aside from having benefits in the industry alone, it is very useful for countries especially less developed countries so that they can increase their pace of developments.
Against the statement above, the disadvantage is that it will cause some impacts for the workers, less workers are needed as they have higher technologies for example, before 10 workers are used in a machine but now only 2 workers are used so, unemployment will increase in that place, but if it is labour intensive, more numbers of workers will be hired, both skilled and unskilled workers and it provides job for the people like the poor people so they can fulfill their needs. Second, when an industry have many capitals, running the cost of production will be higher such as the bills because all of the productions depend on the electricity which sometimes it effects the profit, also labour intensive is cheaper in cost as capitals are expensive to buy, high maintenance cost and costs to train the employees to use the equipment and some industries like beginner or new industry may not afford it.
Capital intensive have more benefits in reducing human errors, adopt to change quickly and developments for the country itself compared to labour intensive.While the disadvantages are increase in unemployment and higher cost of productions.So, in conclusion to this, capital intensive is far better than labour intensive to increase the firm’s productivity as more benefits are shown in using the capital in the industry.
Capital intensive is an Industry requiring large sums of investment in purchase, maintenance, and amortization of capital equipment, such as automotive, etc. And Labour intensive is Industry or process where a larger portion of total costs is due to labor as compared with the portion for costs incurred in purchase, maintenance, and depreciation of capital equipment. And sometimes large company or firms are choosing capital intensive rather than labour intensive, because it will make more advantages for a large firm which they use capital intensive.
ReplyDeleteIts stated that capital intensive is better than labour intensive to increase a firm's productivity because many firms which they more prefer to use capital intensive rather than labour intensive, because if a firm who use capital intensive, it may be an advantages for them because if they use capital intensive, they will use more machines less than workers, because sometimes machines are low cost and it works faster than people. Such as, if a firm who uses robot, it would be an advantage for them because robots work quickly and more efficient, and it may increase more customers and the firm will get many advantages and they can increase their productivity more and they can increase their profit.
Second, if they use capital intensive, it will reduce human errors at the time they work compared to robots, because robots have less errors rather than human. Because they have been controlled by the firm, but workers are don't. So if a firm uses labour intensive, it may be a disadvantages for them if their workers are have mistakes when they do their work. There are many disadvantages for firms which they use labour intensive rather than capital intensive ; Bankrupty, liabilities, and others. So if they reduce human errors by using capital intensive, they may get more advantages which they can increase their profit, sales revenue, customers, etc.
Third, they may give out small amount of money, so if they use capital intensive, they don't have to spending a lot of money because using robots or machines, it will take less risks, and low cost. Because if they use labour intensive or which they employ workers, they have to spend a lot of money. So its an advantages for large firms if they use capital intensive because they do not have to spend a lot of monay and they can increase their productivity.
There are also disadvantages for firm which they use capital intansive rather than labour intensive, such as when the first time they built their firm, it will be a disadvantage for them because they have to spend a lot of money to buy good quality of machines to provide good quality of goods and services, so its catagorized into a disadvantages.
In a conclusion, capital intensive is better than labour intensive to increase a firm's productivity because if a firm uses more capital intensive rather than labour intensive, it may took more advantages rather than disadvantages. And it may took more efficiency for a firm which they use capital intensive because it may reduce human errors and quick services without any mistakes or errors compared to labour intensive.
- Celia Pricilla Mesatania 8A -
Labor intensive means the company has more workers than machines or man made resources. Usually company that uses labor intensive is manufacturing industry, such as fashion industry. Human or workers useful in giving ideas and inovation to the industry. Capitar Intensive means the company has more machine than workers. Examples are coca cola , pepsi, sprite. That factories uses more machines to achive the target of production and to fullfill the costumer order. Sometimes capital intensive is more efficient than labor intensive. Usually human or workers are needed by company to control and monitor about the prodution progress. The risk of the production changing of the enviroment.
ReplyDeleteCapital intensive needs higher cost at the first time of opening the company than the labor intensive but if we calculate specifically , we will relise that capital intensive is cheaper than labor intensice, because they need to pay the salaries, wages ,annual bonus, fringe benefit, train the workers, and other expenses to built an enjoyable enviroment. More machine and man made resources also making the company reduce the cost of an error product better the machine, the quality of the product is better.Capital intensive is an invest for the company because longer its used, company will feel the benefit more.
Sometimes machines or man made resources can have an error problems. The error problem of man made resources can pospone the production activity or make the production stop for a while, or decrease productivity. If these things happens, the distribution path for this product will be disturbed. So the company will be ready to face the risk of losing consumers. Human is needed to give solution to face the sudden error. Human is needed to detect the risk of the problems and also to prevent do the same mistakes twice.Capital intensive also need a lot of fund, so the small company cant buy the man made resources to maintain the machine and man made resources, company must spend expenses such as repair expense, maintenance expense, expense that must paid to trained the worker to those who will take care and use the machine as well.
Supposely in the company, the sum of the machines and the sum of the workers must be the same or balance , so when company needs a lot of product to be produce machines will handle that, if company needs human or workers that can give a solutions to help the company from the risk of enviroment , but many companies prefer capital intensive rather than labour intensive because they think that capital intensive is more efficient and more helpful for the company to reduce costs and making profit.
IN CONCLUSION,there are some benefits if a company use capital intensive, because capital intensive is more efficient , effective , and ability to make profit capital intensive is a part of company investment , so the investment will give more benefits than labor intensive that makes more expense for the company, but human or workers still needed in the company
Capital intensive is an industry requiring large sums of investment in purchase, maintenance, and amortization of capital equipment, such as automotive, petroleum, and steel industry. Capital intensive industries need a high volume of production and a high margin of profit ( as well as low interest rates ) to be able to provide adequate returns on investment.
ReplyDeleteOn the other hand, labour intensive is an industry or process where a larger portion of total costs is due to labour as compared with the portion for costs incurred in purchase, maintenance, and depreciation of capital equipment. Agriculture, construction, and coal mining industries are examples of labour intensive industries.
It is said that firms with more than 50 workers are called to be labour intensive ( more labour than machines / capital ), and firms with more than 50 machines are called to be capital intensive ( more machines / capital than labour ). But it is not always true, some firms just need it.
There are both advantages and disadvantages of both capital intensive and labour intensive. Now I will discuss about labour intensive first. The advantages of labour intensive are providing jobs to the local economy, doesn’t require extensive start up investment in machinery for example, and doesn’t required additional fixed costs. It does not require extensive start up investment because they need more workers than machines ( capital ). It has a high labour or output ratio.
But there are also some disadvantages like human errors, and potential to be a slower method of production compared to a machine based production line. Human errors can result in mistakes, and machines don’t, and it is a slower method of production. By this, we already know that capital intensive is better to increase firm’s productivity. Maybe that’s the reason many businesses do factor substitution, which is the process of shifting production technology from labour to capital.
It’s true that capital intensive is better than labour intensive to increase firm’s productivity. There are also disadvantages of capital intensive, but it’s not related with firm’s productivity. Those disadvantages are workers may get bored with their job, need to retrain workers or managers, profit will decrease in short term, and may need to build or find a bigger building for machinery. It’s true that workers may get bored with their job because all things were made by the machines.
One of the advantages of capital intensive is increased productivity. Because if there are more machines, of course the production will be more than if there are more workers than machines. Other advantages are more profit in long term, benefit from economies of scale, and cheaper ‘labour’. There will be a decrease in profit for the short term, but it will increase again in the long term.
In conclusion, capital intensive is better than labour intensive to increase firm’s productivity, because it is more in manufacturing. Labour intensive are better than capital intensive in business such as restaurants, hotels, or other business that needs services. But in this case, capital intensive is better to increase a firm’s productivity.
Audrey 8A
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ReplyDelete
ReplyDeleteCapitals are equipments used by businesses to produce goods and services. While labour intensive are goods and services produced by labours or by people. Labour could be as employment or workers that produces goods and services. Capitals are like machines and premises that would produce the goods and production by equipments or they are equipments owned by a business to do production. I think capital intensive are better than labour intensive because capital intensive produces goods and services by machines and computers which makes the production faster and more precise because they are already programmed.
Capital intensive is better to increase a firm’s productivity because by having machines and computer the calculation and the productivity would be very accurate and precise because they are programmed and there would be no mistake in producing the product. Also by having this capital intensive the cost would be only the interest and the fixing cost and the cost of the capital while if it is labour intensive, the firm would have higher cost because they need to pay the wages and the facilities for the worker. Labour intensive would make the production not accurate and precise because human makes mistakes, which would make some mistakes in producing the product and they need to hire many workers and the production would be slower or the productivity would decrease because human needs rest and they make mistakes and they couldn’t be programmed to be very precise and the production of handmade is surely to be slower than capital intensive. But by having the labour intensive means that there are only few workers or employments which makes the employer or workers hired are specialized worker, which makes it more efficient and the production would be even faster.
But if using the capital intensive the production would always be the same and no difference because they are programmed with no mistakes and produces goods and services to what they are programmed or controlled. Which while labour intensive they could make different types with unique products or production. By having products produced by handmade or labour intensive with different or unique goods and services would make the price of the product higher because it is different from others, for example Rolls-Royce. By having capitals or machines doing the production, it would of course have higher risk on creating fire. Also by having machines doing all the work or production, would make more unemployment because there are only needed few or less workers because most of the production are by the machines. And capitals would have depreciation of their value by the time the capital used.
So, capital intensive would be having more increase in the productivity of a firm rather than labour intensive because the goods and services are produced by machines that are programmed to produce goods and services with no mistakes or with precision and accurate production. And because they are machines, they are easier to be controlled and the cost of production would be less rather than the labour intensive because the cost is only the interest, the cost of running the capital, and the cost of buying the capital, meanwhile labour intensive have higher cost to pay the wages, the mistakes done by the worker, and more.
Brian.A
8A
To increase an productivity of a firm they will need to choose the best and the most efficient way so it can be beneficial for the firms where they can easily earn profit. There's two types where some firms use to increase production 1. Capital-intensive 2. Labour-intensive. Capital intensive is where the firms use more capital than the labour to produce the goods, if a labour-intensive is a firm where they use more labour than the capital. Capital-intensive will usually have a lot more production because machines can work non-stop but worker have a limited time to produces the goods but if your firm use a capital-intensive it will cost a lot of money to pay the electricity and the other material that will be need to turn on/start the machines so the raw materials can be manufactured so its ready to sell at the market. But by using a labour-intensive it can be more beneficial but the production rate is not as many as producing with machine and high technology. The advantages of using an capital-intensive is more accurate and more efficient to produce a goods that really need a specific details it can be done by machines accurately but if a worker did that there is maybe an error. The disadvantage of using a capital-intensive is the cost of production maybe high and maybe the revenue cost is lesser than the production cost which causes a loss for the business.
ReplyDeleteThe conclusion, is that the production will increase if we use more capital than labour work so the firm that use more capital will increase production even it cost a lot more just to produce a single goods.
Robin 8a.
Productivity can be defined as a ratio between the output volume and the volume of inputs. In other words, it measures how efficiently production inputs, such as labour and capital, are being used in an economy to produce a given level of output. Capital intensive firms and labor intensive firms differ in the way they employ factors of production. A firm is said to be capital intensive if it requires heavy capital investment in buying assets relative to the level of sales or profits that those assets can generate. Production processes in capital intensive firms are often automated in order to perform mass production. In contrast, labour intensive firms are firms which the main cost is that of labour, and it is high compared to sales or value added. In short, determining if a firm is capital intensive or labour intensive depends on the capital-labour ratio. The capital-labour ratio is the ratio of the amount of capital to amount of labour, used to produce any given output. If that ratio is high, indicating the use of much capital relative to labour, production is called capital-intensive. If the ratio is low indicating relatively little capital per unit of labour, production is called labour-intensive.
ReplyDeleteCapital intensive firms are characterized by their use of machinery as the main production method. Machinery can produce goods without rest as long as there is an electricity supply to keep it running, excluding the occasional maintenance. Human labour, however, requires rest. Not allowing workers to rest might be considered labour abuse and trade unions can sue the firm for it. Therefore, production with machines may be more effective, as they can work beyond human working hours. Using capital intensive production methods may also reduce the errors made by labour. Machines and robots are accurate, unlike humans who can make mistakes in producing goods. Machines can also produce at a faster pace than humans, hence saving time for production of items. Increasing the number of goods produced and decreasing the time needed to run production processes would increase productivity, as productivity is calculated by dividing amount of goods manufactured by the total number of hours to produce those goods. It has been argued that labour-intensive methods are difficult to adjust to changes, as humans themselves are not accustomed, or even dislike, change. However, capital-intensive production can easily adapt to modern trends of production. The ultimate reason why capital-intensive production is likely to increase productivity is because this method of production may achieve economies of scale by mass production. More goods can be produced, cost per unit becomes lower, and profit may rise in the long term, assuming that all goods are sold and prices remain the same or higher. Labour-intensive production are sometimes disadvantageous when there is lack of skilled workers. It is difficult to produce good quality products without skilled labour, unlike machines. Labour may also have a relatively inefficient and inconsistent level of effort. Some workers are lazy, and have no motivation to work. The last disadvantage labour-intensive production methods is that disputes between workers are highly possible, and workers may go on strikes, halting production activity. All these will decrease productivity.
It may seem like a bright future if all firms start using capital-intensive production methods instead of labour-intensive ones, but in truth, it is not. To start with, capital goods are scarce and expensive to buy and run. Profits in the short term may fall drastically, due to the large amount of costs spent in setting up the machinery. In developing countries, machines might not be available in the market and may have to be imported with soaring taxes. Firms may also need to expand their premises in order to house the large machinery, which would further increase expenditure. Due to these reasons, small firms are reluctant to use capital-intensive production processes and instead opt for the easily available labour-intensive production. Labour, notably in developing economies, may be cheaper than capital. Employing labour would also reduce unemployment, which will boost the wealth of the people in the area. Assuming that the propensity to consume increases, more goods and services will be demanded, which will result in economies of scale. Labour may provide customers products with a ‘personal touch’, or custom made products. Machinery is not flexible enough to provide these services. Workers are also able to give feedback that provide ideas for further improvement. Workers may also introduce ideas, unlike machines, which lack initiative. Machines cannot be innovative, create new production ideas, or take on more responsibilities.
ReplyDeleteIn summarization of the above information, capital intensive and labour intensive production methods have their own advantages and disadvantages, and must be used together in order to achieve efficient production and to increase productivity.
Source: http://chrisagbe.hubpages.com/hub/capital-intensive-labour-intensive-methods-production, with changes
A Capital-intensive company is a company that uses mostly machines to produce goods and services.A labor-intensive company is a company that uses human workforce or labor to produce goods and services.Both are productive and both are fine, but 1 must be the better one.
ReplyDeleteA Capital-intensive company would be able to produce more goods and services and they would more likely be more productive than a labor-intensive company because machines has less weaknesses.They are very hard workers, you won't need to force them to work and be as productive as they could be.Unlike humans, some of them are just so lazy to work,thus some humans just won't be as productive as machines.Also machines don't rest that often,humans will need to rest for quite a long time after work.But machines don't really need much rest and they could work for the whole week while humans work for only 5-6 days in a week.Based on output, 1 machine could produce more goods than 1 human can,so surely they could produce more. As a robot, you won't need lunch breaks or that kind of breaks,while humans are having breaks robots would still continue producing,they can really exceed our expectations.Also some people said that humans created machines,thus humans are better than them.This can be true, but only some very skilled and smart humans are better than machines,and they would require a lot of money to hire,a normal human can't really beat a machine in terms of producing.Most people said that taking care of machines is a hard work to do, well so is taking care of humans and supervising humans.In order to make humans work for you happily,you will need to provide them benefits and you'll need to reward them with presents,but you won't need to feed robots presents to make them maximize their production.
But,sometimes a capital-intensive company is just not as advantageous and productive as labor-intensive companies.Keeping machines would be more dangerous rather than keeping humans because machines can really cause a disaster, they could burn the whole place and they could destroy your factory and endanger your life.Machines also need a lot of supervision and you will need to spend a lot of money to take care of a machine and to make it perform well,you need to fix it regularly and it will cost you a lot of money. Machines are also very expensive to buy,hiring an employee is cheaper than buying a machine.Humans can also be more productive than machines. If you give them a really big salary, they would work really hard to produce more and more products for the sake of your company, you just need to give them prizes and they would be very motivated in doing their job.Humans also perform very well and they could create better results than machines.Because some machines have technical problems and humans rarely have them.Hand-made goods are always more expensive than machine-made goods.
So the conclusion is that even if machines have a lot of problems,they cost too much,and even if they can endanger you,they're very productive and they could really increase your productivity.
Jovan Pan
8A
To produce goods for the business to sell to the customer they need 4 factors of production they are labor, capital, entrepreneurship, and land. If one from the four factor of production is eliminated they cannot produce any goods. They must have four factor of production to produce goods to sell. There are some example of the factor of production like labor is the people who work in the factory or workshop. They need many labor to work to make the work easier. The example of the capital is the machines and the equipment in the factory or workshop there are cost of production for are the cost of electricity, the cost of water and many more cost that the owner need to pay. The example of the factor of production for labor is the employee, engineer, and the delivery boy. The cost of the labor is the wages of the labor or employee. The example of factor of production land is the land used for build the factory. The cost is the cost of land the owner need to pay to open the factory there. The other example of factor of production entrepreneurship is the entrepreneur who lead the business and take risk of the business. The cost of it is the energy of the entrepreneur, ideas and so on.
ReplyDeleteIn the business point of view, the capital intensive company is the company that use more technology/ machine in the company than using the human power. The example of capital intensive company is the car manufacturer (except rolls Royce), and the food packaging company. The labor intensive company is the company use more labor than the technology or capital of the company. The example of the labor intensive company is the food factory, the toys factory, and so on.
The capital intensive company maybe can produce more goods then the labor intensive company because in the capital intensive company they use technology like robots and machine that can work 2 times more faster than human because robots have more hands than human and human only have to hands use for work. The capital intensive company no need to employ more employee because they have a force of robots to do the jobs that the owner say. The labor no need to work very hard because their job is done by the robots but there are some disadvantage for the labor because they may get unemployment . the machines or robot can save more times for the company because their hand is faster than the human. The other advantages are the boss no need to pay more for the employee and they can save more money. The owner just need to pay for the fixed cost of the robot.
The point against the statement are; the company need to pay more for the electricity cost because the robot use more electricity than the human. The people may get bored because the robot just only can do the same work. If the owner want the robot do the other thing the owner need to upgrade or buy a new robots to do the job and its expensive.
The conclusion is that the capital intensive company need to pay for the fixed cost because the machines only need the same amount of cost.
Productivity can be measured by output per unit of input. There are two methods of production, first is labor intensive and second is capital intensive. Labor intensive can be defined where the company has more workers than man-made or machine resources. And capital intensive can be defined where the company has more machine or man-made resources than workers. These methods are depending on several things. First is the size of the company. Second is the cost of factors of production. And third is the product itself.
ReplyDeleteWe can say that capital intensive is better than labor intensive to increase firm’s productivity because of some reasons. Labor-intensive businesses require a relatively high level of labor compared to capital investment. It is hard to manage labor than manage capital investment; their briefing everyday, and sometimes they make mistakes and forget things easily; also the labor cost is hard to manage sometimes, due to the economics problems. As we have seen lately, there are demos for asking for raises. Also, highly automated and efficiency. This process leads to a highly automated more and more likely to produce goods in larger quantities. Then it is because capital-intensive production is easier to be connected with the production flow. Also it is because their flexibility. It is easily to be suit with the modern trends nowadays.
On another hand, as more capital is used, labor productivity increases but at the same time, employment in industries fall. It increases unemployment, and can hurt economic growth. Also capital intensive leads to urban-rural migration because the capital equipment and capital-intensive methods are found in urban areas, because of that happens, more employment and social facility found in urban areas, and make migration to urban areas. This makes urban areas that crowded become more crowded. Then, the labor intensive methods are employed, many unemployment labors nowadays in most economies will employ. This will solve the problems in unemployment, and there are more goods and services will demand and the results will be in economies of scale. Also, for unskilled people, we can pay them cheap and can lead to reduce the cost of production. As we can see for capital intensive, it’s hard because there are fewer developing countries and the expensive of the capital investment.
On conclusion, we can say that capital intensive is better than labor intensive to increase firm’s productivity in some reasons, however on another hand there are some disagreements because it can affect the unemployment, and economic growth, urban-rural migration, achievement of economies of scale in labor intensive, results in demand, and reducing the cost of production in labor intensive. Also, in order to achieve sustainable economic development, it is important that we should have the both methods.