Business – 4.1 The nature of operations – Capital and labour intensive operations | e-Consult
4.1 The nature of operations – Capital and labour intensive operations (1 questions)
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Key limitations include:
- Higher unit labour costs: In industries where machines can produce thousands of units per hour, paying wages for each task makes labour‑intensive firms less competitive on price.
- Inconsistent quality: Human error can lead to defects, whereas automated processes deliver uniform precision essential for electronic components.
- Limited scalability: Expanding output requires proportionally more workers, training, and management, whereas adding additional machines can increase capacity with relatively low marginal cost.