Labour VS Capital Intensity
Labour intensity – product relies on using labour resources Capacity intensity – product relies on using capacity resources
Benefits of Labour Intensity
- unit costs may still be low in low-wage locations
- labour is a flexible resource-through multi-skilling and training
- labour at the heart of the production process – can help continuous improvement
Drawbacks of Labour Intensity
- greater risk of problems with employee/employer relationship
- potentially high costs of labour turnover (recruitment etc)
- need for continuous investment in training
Textbook Exercise
- A
- B
- D
- A