Distinguish labour-intensive from capital-intensive production by comparing worker input, machinery, scale, cost, flexibility, skills and business context.
Sources for use with Extract A Bee Hive Candles US-based business, Bee Hive Candles (BHC) produces candles made from 100% pure beeswax. All candles are handmade using beeswax from US bees. Jennifer Wesolowski started the business in 2000, using personal savings. She decided to change from making candles as a hobby to setting it up as a business. A wide range of candles are offered but by using 100% beeswax, all candles are environmentally friendly. Unlike typical paraffin candles, they are biodegradable and produce no harmful toxins. They burn for longer, meaning better value for money. Although still a small business, BHC is growing. This is due to increasing consumer awareness of environmental issues and positive feedback on social media platforms. Jennifer remains dedicated to making quality candles and offering outstanding customer service. Newsletters are emailed to existing customers to advise of new products and offers. BHC charges $9.95 to send its candles to customers all over the US but at the moment does not accept orders from outside the US. Prices of the candles range from $6.95 to over $100 for a large pack of candles. The best-selling product is the pillar candle, priced at $17.95. It is popular because of its relatively low price and burns for approximately 50 hours. Extract B Candle sales in the US – some figures • The US has the largest share of customers buying candles in the world. • In the US 35% of all candles are sold online and this is increasing. • Beeswax candles account for only 2% of all candle sales in the US market; this figure is increasing. • Paraffin candles are currently the most popular type of candle, with nearly 40% of the market. This is followed by soy wax, palm wax and beeswax.
Assess the possible benefits for B H C of using labour-intensive production
methods.
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the general marking guidance. The indicative content below exemplifies some of the points that candidates may make but this does not imply that any of these
must be included. Other relevant points must also be credited.
Knowledge, Application, Analysis, Evaluation - indicative content
- Labour-intensive production requires a higher proportion of labour than capital
- It is usually more cost effective to use labour for production of smaller quantities than expensive machinery which may not be fully utilised
- It is likely to be quicker to change between making the different types of candles in the product range
- BHC may benefit from producing individual handmade items as they
can be seen to have more value
- Therefore, it can be easier to adjust to or from making more of the best-selling pillar candles
- Employees can be trained to produce candles according to the level of
demand from customers and could make suggestions for
improvements to increase efficiency
- However, labour can be more difficult to control, require motivation to be efficient and/or less predictable than machines
- This means they may demand higher wages, call in sick or resign unexpectedly, thus increasing costs for BHC
- If demand for candles made from beeswax increases, employees may not be able to keep up with demand and will need breaks and holidays whereas if capital-intensive production is used instead, it may be possible to do the work faster and with greater efficiency
- Once up and running, capital-intensive production can be cheaper and therefore better for long term production and growth
- It is possible that a combination of labour and capital-intensive production may be better for BHC if demand leads to the need to
increase production
Level
Mark
Descriptor
0
No rewardable material.
Level 1
1-2
Isolated elements of knowledge and understanding - recall based.
Weak or no relevant application to business examples.
Generic assertions may be presented.
Level 2
3-4
Elements of knowledge and understanding, which are applied to the business example.
Chains of reasoning are presented, but may be assertions or
incomplete.
A generic or superficial assessment is presented.
Level 3
5-7
Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.
Analytical perspectives are presented, with developed chains of reasoning, showing cause(s) and/or effect(s).
An attempt at an assessment is presented, using quantitative and/or qualitative information, though unlikely to show the significance of
competing arguments.
Level 4
8-10
Accurate and thorough knowledge and understanding, supported throughout by relevant and effective use of the business behaviour/context.
A coherent and logical chain of reasoning, showing cause(s) and/or effect(s).
Assessment is balanced, wide ranging and well contextualised, using quantitative and/or qualitative information and shows an awareness of
competing arguments/factors, leading to a supported judgement.