...ECONOMICS OF SCALE Name Institution Economics of scale Introduction Economies of scale is the cost advantages by enterprises due to size, input, or scale of operation with cost per unit decreasing with increasing scale as fixed costs are spread out more to units of output (Thatcher, 2009). The reason why some regions are more developed than other regions economically is because they produce their goods more efficiently and hence bringing more profit than competitor's regions. Since economies of scale lay it main focus on having an efficient production this shapes the economic development of regions. This paper is about economies of scale it describes how economies of scale shape the economic development of regions through description of different types of economies of scale and examples of countries and regions around the global (Stamp, 2009). Structure Definition Economies of scale is the cost advantages by enterprises due to size, input, or scale of operation, with cost per unit decreasing with increasing scale as fixed costs are spread out more to units of output. Economies of scale are known to improve with growing firms, therefore; it can be said that the economies of scale are directly proportional to the size of the firm (Stamp, 2009). From a simple firm which produces exercise books, the firm uses £200 to produce 10 exercise books meaning the average cost is £20 if the firm produces 40 exercise books the average cost is £12.The difference here is brought by...
Words: 2595 - Pages: 11
...Both Karl Marx and John Maynard Keynes greatly influenced the world with their respective economic theories. Born in 1818 in Germany, Marx grew up as the second son of a liberal, middle-class Jewish family. Throughout his life, Marx suffered poverty, and possibly because of his upbringing in life, he creates a disdain for capitalistic views. His most notable books Communist Manifesto and Das Kapital illustrated his well-known theories. Marx died in 1883, and in that same year, the birth of Keynes passed. Born in England, Keynes grew up in a comfortable English social class. Throughout his life, Keynes enjoyed success and great accomplishment. His books Economic Consequences of the Peace and The General Theory made his ideas and thoughts on economics and his view on protecting capitalism notorious. Marx and Keynes, two very different economists with distinctive proposals, share some similarities, but overall, the two possess totally different concepts on capitalism. Marx and Keynes differ in their broader economic views, but they still agree on some levels. Both economists attempt to devise an economic theory that will explain the problems of the real capitalist world in which they lived in during their respective times. Both predict an unstable capitalist system, since they both believe that a perfect capitalistic system rises and falls periodically. Marx supposes that by raising the national product over the long run will cause an ultimate collapse of the system and allow it...
Words: 1144 - Pages: 5
...(deepest pocket and hence least price sensitive), highest influence in the music industry and positioned to obtain the greatest benefit out of HSS’s accuracy in music selection suggestions. There are initial enthusiasts in this segment who are already impressed with HSS’s capabilities. The market pie can be restricted to the USA (Exhibit 1) Value for the segment: The HSS program will enable record labels to select only those songs for promotion and advertising that has 80% chances of being successful compared to the 10% success rate offered by the tradition ways of selecting a song. Thus, the labels will considerably reduce the amount spent on marketing (Exhibit 2) and as a result will increase profit margins (Exhibit 3). Thus tremendous cost savings and considerable improvement of profit margins are the primary aspects that should be promoted to the record labels. Pricing: Initially price the reports at $7000 per song or 60,000 per album of 10 songs for the first one year of the contract and then go for a $10,000 per song or $80,000 per album. The discounting on album cost...
Words: 1929 - Pages: 8
...competitors, and as a means to increase their adaptability to changes in the business world. Outsourcing also provides the ability to benefit from the advances in information technology, while focusing on core business activities of the organization. Not only does outsourcing information technology functions enable increased concentrated efforts toward the organizational mission, but if skillfully planned and properly managed, contributes to healthy growth in the company’s fiscal bottom line. The implementation of offshoring has affected the competition and the expansion of the business service industry in an increasingly accessible and competitive global world. The effect of Outsourcing Within The Business Services Industry The business service industry has been impacted with intense pressures of reducing costs while also increasing new customers and introducing new products to create a center of attention to those customers. Lately, more companies are implementing offshoring strategies (i.e. outsourcing of operations to foreign countries) to cut costs. However there is some empirical evidence that the business service industries are increasingly offshoring operations to improve their cost structure as well as develop added capacity and improve their capabilities. In this paper we will discuss how the process of offshoring has impacted the business service industry by providing them profit maximization, service demand, production and cost...
Words: 2478 - Pages: 10
...Company (PXP) is building a way to the future with innovation that sets new standards for the Oil Drilling and Gas Extraction Industry. Business Proposal “The world isn’t running out of oil and natural gas. It is running out of easy oil and gas,” Leber, (2012). The technology used to recover oil and natural gas from wells has not changed in the past decade. Our business model for this new division will guide PXP into the future by incorporating digital oil field technology to our existing sites both on land and water. Consumers will benefit by lower prices at the pumps, lower airfare for travel and the transportation costs for products will be reduced, making product prices lower. Offshore oil is much more expensive to extract than onshore oil. “Using traditional techniques, onshore wells can be drilled to 8000 meters compared to 5000 meters, 50 years ago. Offshore wells can be drilled in water to only 1000 meters,” (IBIS World Industry Report, 2014, p. 30). Lately, economical advantages mean the use of fracking has been reemployed over the last five years, even though it has been selectively used since the 1940’s. Using the digital oil fields will streamline production for maximum efficiency. The technological advances will cut costs as PXP maximizes response time at the mining sites. PXP could, according to IBIS World Industry Report Oil drilling and gas extraction in the US (2014), “integrate the exploration of high demand rare-earth mineral mining, securing a place in the...
Words: 1915 - Pages: 8
...MICROFINANCE INSTITUTIONS ON WOMEN EMPOWERMENT IN KENYA: A SURVEY OF MERU COUNTY A Research Project Submitted to the School of Human Resource Development in Partial Fulfillment for the Award of the Degree of Executive Master Of Business Administration of Jomo Kenyatta University of Agriculture and Technology JULY 2013 CHAPTER ONE Introduction 1.1 Background information Several studies show that access to microfinance contributes to poverty reduction, particularly for women participants, and to overall poverty reduction at the village level. It also contributes to women empowerment, including higher levels of mobility, political participation and decision making. According to the State of the Microcredit Summit Campaign 2001 Report, 14.2 million of the world’s poorest women now have access to financial services through specialized microfinance institutions (MFIs), banks, NGOs, and other nonbank financial institutions. These women account nearly 74 percent of the 19.3 million of the world’s poorest people now being served by microfinance institutions. Most of these women have access to credit to invest in businesses that they own and operate themselves. Microfinance programs have been deemed to have the potential to transform power relations and empower the poor—both men and women. As a consequence, microfinance has become a central component of many donor agencies’ and national governments’...
Words: 10177 - Pages: 41
...at a profit. BY AMORY B. LOVINS. L, HUNTER LOVINS. AND PAUL HAWKEN O ARTWORK BY CRAIG FRAZIER N SEPTEMBER i6, 1 9 9 1 , 3. Small gTOUp of s c i c n t i s t s w a s Isealed inside Biosphere II, a glittering 3.2-acre glass and metal dome in Oracle, Arizona. Two years later, when the radical attempt to replicate the earth's main ecosystems in miniature ended, the engineered environment was dying. The gaunt researchers had survived only because fresh air had been pumped in. Despite $200 million worth of elaborate equipment. Biosphere II had failed to generate breathable air, drinkable water, and adequate food for just eight people. Yet Biosphere I, the planet we all 145 A ROAD MAP FOR NATURAL CAPITALISM of those services doesn't appear on the business balance sheet. But that's a staggering omission. The economy, after all, is emhedded in the environment. Recent calculations published in the journal Nature conservatively estimate the value of all the earth's ecosystem services to be at least $33 trillion a year. That's close to the gross world product, and it implies a capitalized book value on the order of half a quadrillion dollars. What's more, for most of these services, there is no known substitute at any price, and we can't live without them. Some very simple changes to the way we run our This article puts forward a new approach businesses can yield startling benefits for today's not only for protecting the biosphere but also for improving profits and competitiveshareholders...
Words: 9179 - Pages: 37
...Microfinance has its roots back in the 1970s. Mohammed Yunus has shaped this industry more than any other Microfinance pioneer. While working at the Chittagong University, Dr. Yunus has lent some money to poor women in the village of Jobra in Bangladesh, as an experiment. He was convinced that: “[…] the poor are like Bonsai trees. When you plant the best seed of the tallest tree in a six-inch deep flower pot, you get a perfect replica of the tallest tree, but it is only inches tall. There is nothing wrong with the seed you planted; only the soil-base you provided was inadequate. Poor people are bonsai people. There is nothing wrong with their seeds. Only society never gave them a base to grow on”. (Yunus, M., 2007) Inspired by this experiment he developed “a...
Words: 2702 - Pages: 11
...ACC 512 – ADVANCED MANAGEMENT ACCOUNTING “ENVIRONMENTAL MANAGEMENT ACCOUNTING AS A STRATEGY FOR CORPORATE SUVIVIAL” PRESENTED TO THE COURSE LECTURER – PASTOR j a OLOREDE BY; OLUMIDE ABISOYE OLOWOKURE PGSS/UJ/00083/10 Introduction Environmental accounting is a broader term that relates to the provision of information on environmental-performance to different stakeholders both within, and outside, an organization. The United States Environment Protection Agency (US EPA) sees the main function of environmental accounting as that of bringing environmental costs to the attention of corporate stakeholders who may be able and motivated to identify ways of reducing or avoiding those costs while at the same time improving environmental quality. Environmental accounting has three major aspects. 1. National Income accounting, which addresses the environmental accounting need of the nation and it’s external in nature. It is basically the micro economic measure which may use for instance physical or monetary units to refer to the consumption of the nation’s natural resources. 2. Financial accounting which addresses the environmental accounting needs of the firm this is also external in nature. This may simply be the estimation and public reporting of environmental liabilities and financial material environmental costs. 3. Managerial/management accounting, this addresses the environmental accounting needs of firms also but basically...
Words: 3146 - Pages: 13
...development of the world of commerce was severely restricted by the unavailability, the slowness, and the expense of transportation and communication. Trade by sea was time-consuming. Overland routes were fraught with danger. But all of this was due to change. This has all come to pass due to globalization and technology, where social issue especially in economics has come more apparently important than ever in history. Now new and even more major issues are arising than ever imagined, and unless we start making rational decisions makings as equal descent human beings living in one world, much catastrophe may lay ahead. As an economic phenomenon, globalization is a shift from national economies to a more global economy. In today’s global world, the production of goods has been internationalized, and money flows even more freely and quickly across borders. In this system multinational corporations wield vast power, while anonymous investors can gain much material needs or can cause devastating depression in any part of the world due to greed. Globalization has indeed been a force that has raised living standards for many across the world. Peter Sutherland, chairman of the Overseas Development Council, says that “until recently, it took at least two generations for living standards to double, but in China, living standards now double every 10 years.” Globalization is perceived as bringing many new opportunities to billions of people. The expansion of world trade has induced a...
Words: 860 - Pages: 4
...1a) Derivatives are an important financial instruments that play significant role in today’s financial markets. It offers various types of risk protection and allow innovative investment strategies. A derivative is so called derivative because its value is derived from another financial security. According to Oxford dictionary, derivative is defined as something derived or obtained from another, coming from a source; not original. In financial jargon, a derivative security is referred to a financial contract whose value is derived from the value of an underlying asset or simply underlying. This underlying is usually stocks, bonds, foreign currency, or commodities. The derivative buyer or seller does not have to own the underlying security to trade these instruments. Several factors have contributed to massive development in derivative markets since the 1970s. First, the collapse of the Bretton Woods system of fixed exchange rates in 1971 increased the demand for hedging against exchange rate risk. The Chicago Mercantile Exchange allowed trading in currency futures in the following year. Second, the changing of its monetary policy target instrument by the US Federal Reserve (FED) promoted various derivatives markets. The adoption of a target for money growth by the FED in 1979 has led to increased interest-rate volatility of Treasury bonds. That in turn raised the demand for derivatives to hedge against adverse movements in interest rates. Later in 1994 when the US Federal...
Words: 7545 - Pages: 31
...1 PED401. Applications and Cases in International Development Teaching Notes 1 The Big Push: what does it mean, and does it make sense for Ethiopia? The idea of the Big Push is one of the earliest in development economics, coined by Rosenstein-Rodan over 60 years ago in the context of a classic work on “the problem of industrialization of eastern and south-eastern Europe”. The core argument is that coordination problems, in the context of increasing returns, create the possibility of multiple equilibria. A poor country can be caught in a low-equilibrium “poverty trap”, government intervention can potentially solve the coordination problem, and “push” the economic into the better equilibrium allowing a “take-off” into sustained growth. The Big Push idea has returned to the center of development policy in the recent past. William Easterly (2006) described 2005 as the Year of the Big Push. It has done so in particular in the context of debates over Africa: the compelling normative case to transform development possibilities of Africans, has been associated with renewed emphasis on the positive case for a Big Push. This has been linked to the case for a major expansion in aid, notably in the work of the Commission for Africa and the Millennium Development Goals; Jeffrey Sachs has been a vigorous exponent of this linkage. This case concerns the analytics of the Big Push, the evidence and its applicability to a poor African country. It bridges issues of growth (from macro)...
Words: 5608 - Pages: 23
...programme - Major in Economics. Neither the institution, nor the advisor is responsible for the theories and methods used, or the results and conclusions drawn, through the approval of this thesis. ABSTRACT This master thesis studies the impact of providing business training to microfinance clients in Tanzania. Based on data collected six months after the programme ended, we cannot confirm positive treatment effects from business training on the micro entrepreneurs’ profits. However, treated entrepreneurs have higher likelihood of operating multiple businesses; increased their engagement within commerce and reduced their engagement within manufacturing. Based on the market situation at the time, these changes all represent advancement towards business structures associated with higher profitability. Moreover, findings of low profitability in new establishments can serve as an explanation to the small effect from business training on profits, and imply that treatment effects will be manifested in higher future profits of the entrepreneurs. 2 TABLE OF CONTENTS Abstract ................................................................................................................................................................... 2 1. Introduction ......................................................................................................................................................... 4 2. Literature Review: Entrepreneurship and Microfinance...
Words: 13519 - Pages: 55
...DECISION MAKING AND ITS EFFECT ON BUSINESS PROFICIENCY GM591 LEADERSHIP AND ORGANIZATIONAL BEHAVIOR May 26th, 2012 TABLE OF CONTENTS Introduction------------------------------------------------------------------------------------------------------Page 3 Problem Statement----------------------------------------------------------------------------------------------Page 4 Literature Review------------------------------------------------------------------------------------------------Page 5 Analysis-----------------------------------------------------------------------------------------------------------Page 7 Suggestive Solutions--------------------------------------------------------------------------------------------Page 8 Conclusion & Reflection --------------------------------------------------------------------------------------Page 9 Work Cited------------------------------------------------------------------------------------------------------Page 10 INTRODUCTION Walgreens is one of the fortune 500 companies and among the fastest growing retailers in the country. Walgreens as of April 30 operated 8307 location in all 50 states including the District of Columbia, Puerto Rico and Guam. This includes 7855 drugstores, 146 more than a year ago, including 21 stores acquired over the last 12 months. The company also operates infusion and respiratory services facilities, specialty pharmacy and mail service...
Words: 1889 - Pages: 8
...aid with sustainable income and helps women to “graduate” from extreme poverty by giving them the tools they need to start small businesses in their communities. With this new and diversified source of income, they can feed their families, pay for school fees and medical care, accumulate savings for long-term stability, survive drought and adapt to a changing climate. The BOMA Project has been named one of 17 “Lighthouse Activities” worldwide by the United Nation’s Momentum for Change initiative. The winners will be honored at a November 20 ceremony in Warsaw, Poland during the UN’s annual climate-change conference. These activities are beacons of hope, which is according to executive secretary of the UN Framework Convention on Climate Change. They highlight some of the most practical, scalable and replicable examples of what people, businesses, governments and industries are doing to tackle climate change. Climate change is creating longer droughts every year in Northern Kenya and is endangering a culture that has long depended on raising livestock for survival. BOMA’s work, to develop alternative means of income for some of the poorest people in the world, is crucial. With income and savings from a BOMA business, women can feed their families, pay for school fees and doctors, cope with emergencies and survive drought, they teach women new skills and help families to ‘graduate’ from extreme poverty, so they can adapt to a changing climate and pave the way for a...
Words: 1098 - Pages: 5
