Page 423 - Cambridge IGCSE Business Studies

IGCSE Business Studies Student CD-ROM

Section 4 – Mind maps

15 Production of goods and services

Methods to improve labour productivity

Provide training to improve workers’
skills

Labour productivity is a measure of
the efficiency of workers (how many
units of output each worker produces Improve worker motivation
in a given time period)
Methods to improve labour
productivity
Introduce more
automation/technology

Improve the quality of management
decsions

Business costs of holding inventories

Purchase or rent of storage
space − warehouse

Costs of damage to, or
theft of, inventories

Insurance costs
The stock of raw materials,
work-in-progress and finished Costs of holding inventories
goods held by a business
Inventories become
Inventories
out-of-date or obsolete
Costs of not holding
inventories
Handling costs of moving
inventories into and out
of storage
• Opportunity costs
• Inventories tie-up cash which
could be put to better use
• Too many inventories might
worsen liquidity and cause
cash-flow problems

© Cambridge University Press 2014 IGCSE Business Studies Section 4 – Mind maps 1