Analyse the likely benefits to a car manufacturing company of using capital intensive processes.

Mark scheme

Marking points from the official mark scheme (Feb/Mar 2019). The mark or mark type is shown in brackets.

1. Capital intensive processes rely mainly on capital ie plant and machinery, IT systems, etc rather than labour. Many car plants use robots for heavy lifting and paint spraying. Initial cost is high but can save on labour costs in the long term.
2. Production can continue 24/7 so output is high, good for flow production
3. Quality of work is consistent so good for standardised products
4. Work is accurate and precise so less customer dissatisfaction and waste
5. Good for tasks which are dangerous and unpleasant for people
6. More output per hour than labour so unit costs fall
7. Machines don't need breaks or holidays or get ill and no HR issues
8. Accept some discussion of the disadvantages of using capital intensive processes.
9. Batch production – groups of items are made together. Each batch is finished before starting the next block of goods.
10. Allows faster production than job production.
11. Teams can work on different parts of the batches, division of labour.
12. Popular jewellery items e.g. bracelets and necklaces could be done in batches of 50 at a time.
13. Is flexible so many types / designs of jewellery items eg gold / silver can be made.
14. Allows small levels of stock to be built up so jewellery is always available.
15. Possibility of economies of scale in raw material purchasing.
16. Not going to be unique pieces so price will be lower.
17. Employees may be less motivated than if doing job production as work is less specialised.
18. However, job production might be needed for one off commissions so the design is unique.
19. Designer jewellery could be made to order using job production.
20. Price could be higher with job production to reflect the slow production and high quality.
21. Depends whether there is a demand for unique pieces of jewellery made by a small business. It may not be profitable for them.
22. Best method of production for a small jewellery manufacturing business will depend on the skills of employees, the requirements of the target market and the extent of demand. It may be more profitable to use job production in the niche market for exclusive designer jewellery with a high profit margin, but this will only be achieved if the staff are skilled enough to be able to produce unique items of sufficiently high quality to justify a high enough price. Batch production for most items may allow higher output.