New blog address

Info for students,

Please find the newest info about Business Studies lesson on the new blog address below :
http://smis-jss-business.blogspot.com

Rgrds,
Anang

Info : Unit Test

Unit test on Monday 9 February 2009

Dear Students,

Please be noted that you will be having a unit test on Monday 9 February 2009.
The materials for the test are : Types and factors of production and The importance of location.

Rgrds,
Anang P.Setiawan.

The importance of location

The importance of location

For any company, a key business decision will be about where it is located.
►A photographic shop will want to be located where there is a sufficient number of passing shoppers to drop off their films for developing.
►As demand for internet shopping grows, companies have to find or build large warehouses near the motorway network to store the products they are selling.
►Banks and other financial institutions are moving away from city centres to out-of-t
►Many multinational companies are setting up factories in China as it has the potential to be the largest market in the world.
►Two factors in determining for the business location : power and raw materials.
Heavy industries (steel and chemicals, were often located close to sources of power, such as coal, and sources of raw materials, such as salt. Plentiful water was also often important.

Traditional factors affecting location
►Primary industries (farming and mineral extraction) still have to be located at the place of the raw material.
►Some manufacturing industries also find it cheaper to locate near to raw material.
►Coal fired power stations, chemical plants are all examples of industries where the raw materials are more expensive to transport than the final product.
►Power has become much less important in developed countries because of the availability of gas and electricity. In less developed countries without a good power system, however, it might still be an important factor.

Businesses located close to the market
►Manufacturers : the final product is more bulky than the raw materials. They want to reduce transport costs by producing closer to the market.
►Component suppliers to large producers : need to be able to get their products quickly to the site of the large company after ordering.
►Service industries, like banks, retilers and legal services need to be close to where their customers live.
►‘Footloose’ businesses-often small manufacturers-prefer to be close to large markets.
Land and Labour
►Production, land and labour will be important factors in location decisions.
►Land availability will be a key factor. A business will need to consider :
-The cost of buying or renting the land in comparison with another location.
-whether there is enough space now and for potential expansion.
-if there are good access roads for supplies and finished products.
-whether planning permission is available for a business.
-the environmental impact of the location. (will the local community object if the business has waste to dispose?)
►Labour availability can also affect location. A plentiful supply of labour who will work for low wages has attracted many multinational companies to open factories in Asian countries or in the emerging Eastern European economies.
►But businesses will also be attracted to areas with labour with the right skills and motivation.
Transportation and communication links
►Location close to a major port : companies that rely on imported raw materials or that export a large part of their products.
►Good transport links have become more important in their location decision.
►For a business that supply markets throughout the country : a location close to a good motorway and road link.

Types and Factors of Production

TYPES AND FACTORS OF PRODUCTION

By : Anang P.Setiawan

http://smisbs.blogspot.com

A. Types of Production
•The Primary Sector
Extraction of natural resources, they are Mining, Fishing, Agricultural industries, Forestry.
•The Secondary Sector
The products of the Primary stage are processed and turned into manufactured goods ( Consumer good, e.g. Food, TV. Producer goods, e.g. A components, a piece of machinery, etc)
•The Tertiary Sector
Involve the production of services rather than goods. e.g. Banking, insurance, hairdressing, education, health.

B. Factors of Production
To produce goods and services requires resources.

Factors of production are various types of resources used in the production of goods and services. They are : Land, Labour, Capital, Entreprise/Entrepreneurship.

LAND
Natural resources used in the creation of products. It includes not only land that we stand on, but also grow crops on and build upon, and also fisheries, mines, and forest. Paid in Rent.

LABOUR
Human effort (physically and mentally) provided in the creation of products, paid in wage/salary.

CAPITAL
Human-made goods or means of production (including machinery, building, and so forth) used in the production of other goods, paid in interest.
•Fixed Capital :
Includes machinery, plant and equipment, new technology, factories, and building.
•Working Capital :
Includes stocks of finished and semi-finished goods (components) that will be made into finished consumer goods.

ENTREPRISE/
ENTREPRENEURSHIP
It’s similar to labour but it’s seperated because entreprise is the unique ability of people to organise the factors of production to produce goods and services and make a profit or loss.

What resources go into making a car ?
•Land :
Natural resources used in manufacturing, land for plant and equipment.
•Labour :
Workers employed directly in the car industry;engineers, designers, paint sprayer, management staff, transport and distribution workers, etc.
•Capital :
Fixed capital : Machinery, technology, building-Working capital : stocks of raw materials and components.
•Enterprise/Entrepreneurship :
Management, risk taker

C. Combining the factors of production
Owner and managers :
combine the factors of production in the best way to produce the lowest costs of production.

•In developed countries : Farming tends to be more ‘Capital Intensive’ –using more machinery than labour.
•In developing countries : Farming tends to be more ‘Labour Intensive’-using more labour than capital.

•The balance of factors in a country can change over time.
•Countries such as Korea, Singapore, and Taiwan develop fast becuse they can attract more capital from developed countries and combine with labours, so they become more skilled.


D. Specialisation and the division of labour
In sole trader (one-person business), the owner has to produce the product, market and sell it, distribute and fill out the account. It tends to be small business as no one can be good at everything.

•In a larger business, there is specialisation (The manager manage, the production workers produce, the marketing department markets, the accountants check on the profits.
•Each person concentrates on his/her duty and leave other tasks to other workers. This process is called as the division of labour.


The Benefits and Disadvantages of Division of Labour

BENEFITS :
1.Production is increased – Higher standard of living
2.Low cost of production – low prices for consumers.
3.Employement is increased
4.The return is high – New Investment

DISADVANTAGES :
1.Standardised product – replace craft production
2.Low priced goods – undercut small local producers.
3.Automatic Production – boring for the workers.
4.Companies can quickly close down and switch investment elsewhere.

End of Document

Business Studies Grade 9

Dear all students,

I do hope it will be helpful for you,

rgrds,

Anang P.Setiawan