Technological Effects on a Business

• A business will set targets linked to keeping unit costs as low as possible while not affecting quality
• Technology influences unit costs:

  increased number of units produced

  -spreads fixed cost

  -negotiate discounts with suppliers (bulk buying)

  -greater use of assets

  Productivity

  -efficiency of workforce

  -use of workforce hours

  Material usage

  -reduces wastage
• -A business can pass reduced costs onto the consumer through lower prices

  -this is particularly important in competitive markets when a customer can go elsewhere

  -alternatively, the business might maintain its prices, meaning that lower costs can lead to higher profit margins for every unit sold
• Impacts of technology on production

  increased competitiveness

  -ability to reach global markets

  -e commerce

  -greater productivity and consistency/quality

  -lower unit costs and less waste

  Move from labour to capital intensive

  -redundancies

  -retraining

  Cost

  -initially expensive to pay for new technology

  -however, reduces unit costs in the long run

  Productivity

  -increased output per worker

  Quality

  -increased consistency with less waste

  -improved quality without human error

  Flexibility

  -ability to change products being produced

  -a range of products can be made on the same machinery