Reasons for production choices
Many companies cannot afford the expense of capital intensive methods of production
Whether a company chooses to use Takes a lot of work and time to produce. or An industry or process that needs a large amount of money to make it work. methods of production will involve many factors:
- Finance available - a large amount of capital is required to invest in capital intensive production. Some businesses may not be able to afford to invest in this method of production
- Quantity - if large quantities of identical goods are required then a company will be more likely to use capital intensive methods of production. Whereas if the product being supplied is a low quantity of a tailored product then labour intensive methods would be preferred
- Technology - if the required technology to produce the goods is unavailable than the company would have no choice but to use labour intensive