IGCSE Business: Technology and production of goods and services and related topics (Cambridge 0264) – Revision Notes

These are condensed notes for sections 4.2 (Technology and production of goods and services) and 4.3 (Sustainable production of goods and services) of the Cambridge IGCSE Business 0264 syllabus for examination in 2027, 2028 and 2029. For full explanations and worked examples, read the study guide. Then test yourself with the practice questions. The course hub, the checklist lets you tick off points, and the free diagnostics show your weak spots.

Key terms

Term	Meaning
Mechanisation	Machines do work that people did by hand; a person usually still operates them (standard form)
Automation	Machines or computer-controlled systems do tasks with little human input (standard form)
Computer-Aided Manufacture (CAM)	Computers control machines and equipment used to make a product
3D printing	Building an object layer by layer from a digital design
Productivity	Output compared with the inputs used
Labour productivity	Output ÷ number of employees (standard form)
Sustainable production	Producing without using up resources or harming the environment, so future production is not damaged
Renewable energy	Energy from sources that are naturally replaced, such as solar and wind
Reuse	Use an item again, as it is
Recycle	Break waste down to make new material

4.2.1 Technology in production

How technology changes production methods

• Mechanisation: machines take over manual work.
• Automation: computer-controlled systems run tasks with little human input.
• CAM: a design becomes instructions and the machine repeats them exactly.
• 3D printing: no special mould or tool for each design, so it suits one-offs and small runs.

Service-sector productivity

• Contactless payments shorten each transaction, so the same till serves more customers.
• Other examples: online booking, self-service tills, mobile banking.
• Benefits: speed, fewer errors, lower labour cost per customer, round-the-clock availability.
• Drawbacks: system failure, fraud and security risks, customers unsure of the technology.

Advantages and disadvantages

	Advantages	Disadvantages
Business	Higher output; lower unit cost; consistent quality; less waste; faster response	Purchase and installation cost; training; repairs; dependence on the system
Employees	Fewer dull, heavy or dangerous tasks; new skills; better-paid technical jobs	Job losses; retraining needed; repetitive, machine-paced work

Method: answering “evaluate technology” in steps

1. State the technology the business is using, in the stem’s own terms.
2. Give an advantage with a figure from the case (output, cost, time).
3. Give a disadvantage with a figure (cost of equipment, jobs affected).
4. Weigh them: size of the business, cash available, skills of the workforce.
5. Reach a judgement and give a reason.

Worked reminder: labour productivity

A bakery makes 2,400 loaves a week with 16 workers. Labour productivity = 2,400 ÷ 16 = 150 loaves per worker. A new oven lifts output to 2,880 with the same 16 workers: 2,880 ÷ 16 = 180, a rise of 30 loaves, or 20%.

4.3.1 Sustainable production

Six methods

Method	Example
Renewable energy	Solar panels on a factory roof
Fewer resources or less waste	Precise cutting; better stock control
Reusing	Refillable containers; reused pallets
Recycling	Scrap metal melted; paper pulped
Environmentally friendly products	Longer-lasting, repairable, low-energy products
Environmentally friendly packaging	Less packaging; recycled or recyclable material

Advantages and disadvantages of becoming more sustainable

Advantages	Disadvantages
Lower running costs from less energy, material and waste	High start-up costs for equipment, new materials, redesign
Better reputation; appeals to customers who care about the environment	Greener inputs can cost more, so prices rise or profit falls
Easier to meet rules and avoid bad publicity	Savings can take years to arrive
Can motivate staff	Cheaper rivals may attract price-sensitive buyers

Worked reminder: time to recover a cost

Solar panels cost £24,000 and save £4,800 a year on electricity. Years to recover the cost = 24,000 ÷ 4,800 = 5 years. After that, the saving is a gain each year the panels still work.

Worked reminder: cost per unit after automation

A workshop pays £3,000 a week in wages for 600 units. After automation it makes 750 units with the same wage bill. Wage cost per unit falls from 3,000 ÷ 600 = £5.00 to 3,000 ÷ 750 = £4.00, a fall of 20%. Say what this means: each unit is cheaper to make, so the business can cut its price or earn more profit per unit. Then ask what the machine cost.

Manufacturing and services compared

	Manufacturing example	Service example
Technology	CAM, robots, 3D printers	Contactless payment, online booking, self-service tills
Main gain	More output, steady quality, less waste	Faster service, more customers served, longer opening
Main risk	Machine breakdown, high purchase cost	System failure, fraud, customers unwilling to use it
Employees	Fewer manual jobs; more technical jobs	Fewer till and desk jobs; more support and IT jobs

Sustainability: questions to ask of any case study

1. Which of the six methods is the business using or considering?
2. What does it cost to start, and how soon does a saving appear?
3. Will customers notice and value it, for example a greener package?
4. Does it lower running costs, such as energy or waste disposal?
5. Does the business have the cash to wait for the return?

A short model judgement: “Fitting solar panels is likely to be worthwhile for this firm because the saving continues for years after the cost is recovered, but it should check that it can fund the £24,000 first.”

Linking the two sections

Technology and sustainability often meet. A precise cutting machine can reduce waste. A 3D printer uses only the material needed for the item. On the other side, new machines use energy and old ones become waste, so a business should consider both. If a question links the two, show one effect on cost and one on the environment.

Must-know distinctions

• Mechanisation or automation? Ask how much a person does after the machine is set up.
• Reuse or recycle? Reuse keeps the item; recycling makes something new from it.
• Business effect or employee effect? Keep them in separate sentences.
• Productivity or output? Output is a total. Productivity compares output with inputs.
• Fewer resources or recycling? Fewer resources avoids the material being used at all; recycling deals with material already used.

Quick self-test

1. Define Computer-Aided Manufacture (CAM).
2. State one difference between mechanisation and automation.
3. Explain one reason 3D printing suits a firm making single prototypes.
4. A workshop makes 1,500 units with 25 workers. Calculate labour productivity.
5. Output rises to 1,800 units with the same 25 workers. Calculate the percentage increase in labour productivity.
6. Explain how contactless payments can raise productivity in a shop.
7. State one disadvantage of new technology for employees.
8. State two ways a business can be more sustainable.
9. Distinguish between reusing and recycling.
10. A firm spends £18,000 on a wind turbine that saves £3,000 a year. Calculate the number of years to recover the cost.
11. Explain one disadvantage to a business of using recycled packaging.

Answers

1. Computers control machines and equipment used in making a product.
2. In mechanisation a person still operates or supervises the machine; in automation the system does the task with little human input.
3. It needs no special mould for each design, so a one-off item is cheaper and faster to produce.
4. 1,500 ÷ 25 = 60 units per worker.
5. 1,800 ÷ 25 = 72; (72 − 60) ÷ 60 × 100 = 20%.
6. Each payment takes less time, so the same member of staff serves more customers an hour.
7. Some jobs may disappear, so employees may face redundancy or need retraining. (Any one valid disadvantage.)
8. Any two of: renewable energy, fewer resources or less waste, reusing, recycling, environmentally friendly products, environmentally friendly packaging.
9. Reusing uses the same item again as it is; recycling breaks it down to make new material.
10. 18,000 ÷ 3,000 = 6 years.
11. It may cost more per unit than plastic, which raises costs or lowers profit unless the price rises. (Any one valid disadvantage, linked to the business.)

Where marks are usually lost

• Writing a definition of automation when the question asks how it affects a named business.
• Listing technology benefits with no link to output, cost, quality or time.
• Giving employee effects when asked for business effects, or the reverse.
• Treating job losses as the only employee effect and ignoring new skills and safer work.
• Calling reuse and recycling the same thing.
• Stating “it saves money” for sustainability with no mention of the high start-up cost.
• Leaving out units, such as “per worker”, in a productivity answer.
• Evaluating without a judgement. A list of points with no conclusion is not an evaluation.

Frequently asked questions

What is the difference between mechanisation and automation? Mechanisation uses machines to do work people did by hand, usually with a person still operating or supervising them. Automation uses machines or computer-controlled systems that carry out tasks with little or no human input once they are set up.

What is the difference between reusing and recycling? Reusing means using an item again as it is, such as refilling a container. Recycling means breaking waste down to make new material, such as melting scrap metal or pulping paper.

How does technology raise productivity in the service sector? Technology such as contactless payments shortens each transaction, so the same staff can serve more customers in the same time. Other examples include online booking, self-service tills and mobile banking.

What are the six ways a business can be more sustainable in Cambridge IGCSE Business 0264? Using renewable energy, using fewer resources and creating less waste, reusing, recycling, developing environmentally friendly products and using environmentally friendly packaging.

Official syllabus

Cambridge IGCSE Business 0264 syllabus for examination in 2027, 2028 and 2029, published by Cambridge University Press & Assessment (Cambridge International Education): sections 4.2.1 and 4.3.1.