...Assignment 1: Operations Decision Kimberly D Coello Prof. James Ibe, Ph.D., CAE. ECO 550 Managerial Economics and Globalization 20 July 2012 Assignment Assume you have been hired as a managing consultant by a company to offer some advice that will help it make a decision as to whether it should shut down completely or continue its operations. It currently uses 100 workers to produce 6,000 units of output per month (working 20 days / month). The daily wage (per worker) is $70, and the price of the firm's output is $32. The cost of other variable inputs is $2,000 per day. You are told that the firm's fixed cost is “high enough” so that the firm's total costs exceed its total revenue. The marginal cost of the last unit is $30. 1. Briefly describe the details of the fictitious business that you created for this assignment. Light Up the Sky, Inc. is a company that manufactures luminescent kites. This company has been in business for the past 10 years and during this time has established itself as a high quality manufacturer of these kites. Even though this company appeals to a small fraction of the entire kite industry, they had been able to maintain a 20% profit margin. Due to the lagging economy, their profit margin dropped below the breakeven point and they are now considering shutting down production. 2. Assess the current environmental scan factors. Determine the factors that will have the greatest impact on plant operations and management’s decision to continue...
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...Assignment 1: Operations Decisions ECO 550- Managerial Economics and Globalization 7/21/2012 1. Briefly describe the details of the fictitious business that you created for this assignment. There are currently 100 workers being utilized that work for 20 days per month at a wage of $70 per day. The workers produce 6,000 units of output per month with variable costs of $2,000 per day. The fixed costs are not disclosed and we are told they are "high enough" so the total costs exceed the firms total revenue. The price of the firm's output is $32 and the marginal cost of the last unit is $30. 2. Access the current environmental scan factors. Determine the factors that will have the greatest impact on plant operations and management's decision to continue or discontinue operations. Given the information supplied the biggest factors of an environmental scan are; the time frame the business hopes to be in the market (short run vs. long run), the elasticity of demand for the item the firm produces, competition (many firms vs. few firms), and production costs. Some other minor factors of an environmental scan show that learning curve of workers versus experience, turnover, and markets. Time frame is one of the most important factors given the information about Company ABC because the fixed costs are not given but told to be "high". The reason this is a major concern has to do with the fact that in the short run not all inputs are variable and variable costs are dependent...
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...1. ASSIGNMENT 2: OPERATIONS DECISION Introduction This document will briefly describe the details of a fictitious business (X-QUIZIT INC). It will show an assessment of the current environmental scan factors that are relevant to the business decision making process and the factor that will have the greatest impact on the business operations and management’s decision to continue or discontinue its operation. It will also show an evaluation of the financial performance of the company using the information provided in the scenario, with consideration given to all the key drivers of performance such as company profit or loss for both short and long term and how each factor influences managerial decisions. The document will also show recommendation on how the company can improve its profitability to deliver more value to its stakeholders and the development of a plan to implement the recommendations. Finally, it will show an assessment of the circumstances in which the company should discontinue operations and how management should react when confronted with these circumstances. Brief Description of the Fictitious Business Created for Assignment The name of the business use in this assignment is X-QUIZIT INC (X-QUIZIT). This company is a maker of high end clothing headquartered in New York with fifteen additional stores throughout the United States, with over 250 employees. While the company is known for making several types clothing, including shirts and sport jackets, it...
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...ASSIGNMENT 1: OPERATIONS DECISION 2 The company that I am consulting is Simple Simon’s Pecan Pie Factory. Simple Simon’s has been producing pecan pies for thirty years and is an established and well-recognized competitor in the gourmet pie market. The company has two manufacturing plants in Tifton, GA and Charleston, SC, and ships its pies all over the world. Recently, I was contacted by the president of the company, Simon Fair, to make recommendations on how to turn around the company’s floundering operations. Over the last three years, Simple Simon has seen its market share fall and its revenue decline 15% each year. There have been several competitors that have entered the market within the last five years that have taken market share away from Simple Simon’s. With the current economic environment, the company faces some challenging decisions. Currently, the company employs 100 workers and produces 6000 pies per month. Each of the two factories is running at only 40% capacity, and the company has had to lay off 25 workers in the last 6 months. The firm’s fixed costs are high enough that they have caused total cost to currently exceed total revenue. The company must make a decision on whether to continue or cease operations. The first step in analyzing Simple Simon’s financial situation is to do an environmental scan of their operations. An environmental scan refers to patterns, trends, and relationships within an organization’s internal and external environment...
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...Operations Decision ECO/550 Operations Decision In observation of local and global businesses, operations decisions are important to determine if the organization has sufficient cash and resources to maintain existence. Organizations often employ professional consultants to evaluate operations deficiencies, including the preparation of cost analysis to better gauge if the company should shut down completely, maintain operations for short-term or long-term basis. This evaluation gives s brief description of Digisafe USA, a business organization manufacturing and selling digital safes. The organization was selected for the analysis, including the assessment of current environmental scan factors which may be relevant to the decision making process. Furthermore, the analysis determines the factors that will have the greatest impact on plant operations and management’s decision to continue or discontinue operations. The results will provide a rational. The evaluation reveals the financial performance of the company using the information provided in the scenario, including consideration for all the key drivers of performances, including company profit or loss for both the short term, and long term. The discussion includes how each factor influences managerial decisions, using the calculation to support the decision. The analysis further recommends how the company can improve its profitability to deliver more value to its stakeholder, giving a brief plan to implement...
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...Operations Decision by Virna Scott Dr. Shad Koros ECO 550 Managerial Economics and Globalization White Marsh Campus Strayer University May 26, 2014 Operation Decision Introduction Managers make decisions affecting the organization daily and communicate those decisions to other organization members (Types of Decisions and Decisions Making Process, n.d.). Managerial decisions are not all equal to the organization. The decisions can have a major impact, not only on the management system itself, but also on the career of a manager who makes them. Outline a plan that will assess the effectiveness of the market structure for the company’s operations Weight Watchers International Inc. is a huge successful weight loss plan in the world. The company starts from the idea of one woman into a success global franchise with record breaking revenues. Weight Watchers International has taken over 50 percent of the dieting market; million of people go to the company's weight loss classes all over the countries around the world. Weight Watchers have been around longer than its competitors, and they have healthy eating down to a science with the product taste and low calorie. Everyone is on the health kick and weight watchers know their audiences. Weight Watchers target market programs that aim to control what has been called the obesity outbreak in America. Their customers depend on reduction of caloric intake instead of dieting and exercise. The company studies individual...
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...Economic Theory Used to Determine Management’s Decision to Continue or Discontinue Operations Managerial economics involves all factors available in any market system for production and marketing of goods or services (Farnham, 2010). Managing consultant uses the information come out of this process to develop economic models, which it can help to understand the business environment. Additionally managing consultant applies the economic theories to business decision making (Michaels, 2011). According to previous information for this firm the factors that will have the greatest impact on plant operations are workers, maximum outputs, labor time, and variable costs. Currently, the managing consultant will work with special attention in the marginal cost to design the economic model (Michaels, 2011). The fixed cost is a constant expenditure that will not change over the time. Variable costs include all of inputs such raw materials used to produce the units, labor, location, but it will change if the production increase or decrease. Managing consultant will evaluate different scenarios in the interior of the economic model that will support the making decision process. Managing consultant will value external factors such as supply and demand, constraints (physical, time, and financial constraints), normative economics, competition, bias, efficiency, and different markets (Michaels, 2011). Finally, managing consultant is a professional that seeks to maximize the company’s profit...
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...Operations Decision Dr. Izzeldin Bakhit ECO 550 Managerial Economics and Globalization March 3rd, 2014 Operations Decision There are a lot of frozen food and low calorie microwavable food options available in the market. A few years ago people were not able to purchase the microwavable food but with the increase in income, people can now afford an easier lifestyle and can change the way they cook breakfast, lunch, and dinner. Because microwavable food easy to cook, people are replacing traditional cooking methods to microwavable foods. A few of the companies that are manufactured are Lean Cuisine and Healthy Choice. They both are competitors in the market of frozen foods. Lean Cuisine was started in 1981 and has since then grown its market in US, Canada and Australia. The company is owned by Nestle and offers variety of frozen foods and is one of the leading choices for low calorie food. Healthy Choice, the product manufactured by ConAgra is also one of the leading low calorie frozen food suppliers. Healthy choices are the biggest opponents to Lean Cuisine (foodbusinessnews.net). As far as the market sector: it is decided by three criteria which are Behavioral, Psychographic and Profile variables. Behavioral variables are those that are wanted from the product, and buying patterns such as frequency and volume of purchase which might be considered the fundamental basis of any company. The Psychographic variables are used when the company’s’ purchasing behavior...
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...Question $20.00Assume you have been hired as a managing consultant by a company to offer some advice that will help it make a decision * From Economics: General-Economics * Closed, but you can still post tutorials * Due on Jul. 18, 2012 * Asked on Jul. 15, 2012 at 10:26:38AM Asked by : jboogie01 Rating :No Rating Questions Asked: 4 Tutorials Posted: 0 Message Me Q: I need help with this paper ECO 550 Attachments: Assignment 1.docx (15K) Tutorial $40.00 Your ECO 550 Assignment has arrived (Original Work) * This tutorial was purchased 1 time and rated No Rating by students like you. * Posted on Jul 15, 2012 at 2:54:56PM Posted by : dakannibal Rating (114):B Questions Asked: 0 Tutorials Posted: 1150, Blog Posts: 7, Earned: $6,367.87 Message Me A: Assume you have been hired as a managing consultant by a company to offer some advice that will help it make a decison as to whether it should shout down completely or continue its operations. It currently uses 100 workers to produce 6,000 units of output per month working 20 hours per month. The daily wage per worker is $70, and the price of the firm's output is $32. The cost of other variable inputs is $2,000 per day. You are told that the firm's fixed cost is "high enough" so that the firm's total cost exceed its total revenue. The marginal cost of the last unit is $30. As the newly hired managing consultant of a 'firm' employer, the aim of focus will point towards...
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...revenue. The price of the firm's output is $32 and the marginal cost of the last unit is $30. 2. Access the current environmental scan factors. Determine the factors that will have the greatest impact on plant operations and management's decision to continue or discontinue operations. Given the information supplied the biggest factors of an environmental scan are; the time frame the business hopes to be in the market (short run vs. long run), the elasticity of demand for the item the firm produces, competition (many firms vs. few firms), and production costs. Some other minor factors of an environmental scan show that learning curve of workers versus experience, turnover, and markets. Time frame is one of the most important factors given the information about Company ABC because the fixed costs are not given but told to be "high". The reason this is a major concern has to do with the fact that in the short run not all inputs are variable and variable costs are dependent upon production. Production using the variable inputs is the only way to change profit losses or profit maximums. If the company has long run plans then the fixed costs issue is not the biggest problem at the moment because all inputs are variable and can change accordingly to the management's decisions. Given that we do not know the fixed costs it is crucial to access all possibilities. "Access to capital is a major problem for start up businesses.." (Access to Capital). Due to this information...
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...Operations Decision ECO550 Assignment 2 Lydia L. Brooks February 16, 2014 Operations Decision Introduction There are countless low calorie microwavable food options in the market today that are available for purchase. As people experience a higher income, they can afford a better lifestyle than was previously accessible; therefore, people’s cooking style has changed. Instead of using traditional cooking methods, people now use microwaves to cook. With this microwave usage rise, a rise in microwavable food items has also occurred. With so many diverse products available it is so very easy to find and purchase a healthy choice of microwavable food. A low-calorie or healthy selection of diet choice is one that includes a good source of protein; in addition to containing a minimum of 3 grams of fiber (to satisfy), and also has no more than 600 milligrams of sodium (Zelman, n.d.). Some of the manufacturer options are: Lean Cuisine and Healthy Choice. Both of them are major competitors in the frozen food market. Lean Cuisine, a part of Stouffer’s (which dates back to the 1920’s) was acquired by Nestlé 1981 and has since then expanded its market in the US, Canada and Australia. Lean Cuisine offers a wide variety of frozen foods and is one of the top choices for low calorie food (Nestle', n.d.). Healthy Choice, manufactured by ConAgra, is another principal low calorie frozen food supplier. They are Lean Cuisine’s biggest competitor. The market segment is decided...
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...Operations Decision Stacey White Dr. Bernadette West Managerial Economics and Globalization May 18, 2014 When it comes to low-calorie frozen microwavable foods the top two companies are Healthy Choice and Lean Cuisine. In this paper I will discuss one of their competitors. First outline a plan that will assess the effectiveness of market structure for the company’s operations. Then I will determine two factors that likely factors that caused the change in market structure. Next I will analyze the major short run and long run cost functions for this company given certain cost functions. In this analysis I will suggest substantive ways in which the company can use that information to make decisions in the short and long run. Then I will determine the possible circumstances in which the company should discontinue operations. While doing this I will suggest key actions that management should take in order to confront these circumstances. Next I will suggest one pricing policy that will enable this food company to maximize profits. Then I will outline a plan which the company could use to evaluate their financial performance. Lastly I will recommend two actions that the company should take in order to improve their profitability and deliver more value to their stakeholders. After making these recommendations I will outline a plan for the company to implement these recommendations. Market Structure The low-calorie frozen microwavable industry seems to operate under a monopolistic...
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...The initial assumption was that the market structure for the low-calorie frozen, microwavable food company operated in a perfectly competitive environment. Perfect competition is totally different from imperfect competition. Under perfect competition, there are many buyers and sellers, and prices reflect supply and demand. Also, consumers have many substitutes if the good or service they wish to buy becomes too expensive or its quality begins to fall short. New firms can easily enter the market, generating additional competition. Companies earn just enough profit to stay in business and no more, because if they were to earn excess profits, other companies would enter the market and drive profits back down to the bare minimum (Perfect Competition, 2014). Based on recent information, the firm is in an imperfectly competitive market and has substantial market power in setting the optimal price. An imperfect competitive market is a type of market where the conditions of the perfect competitive markets are not satisfied. The imperfect market will have characteristics that are opposite of the perfect competition market. The types of imperfect competition are the monopoly (single seller), monopolistic competition (many sellers manufacturing highly differentiated goods), oligopoly (few sellers), duopoly, monopsony (single buyer) and oligopoly (few buyers). Imperfect might also be caused by other characteristics other than the firm’s behavior. An example is imperfect competition due...
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...Operations Decision Managerial Economics and Globalization ECON550 May 24, 2015 This paper will provide insight into the low-calorie microwavable foods in support of the company’s long run and short run operations. When it comes to low-calorie frozen meals there are many options; this paper will delve into two companies and look at their competitors. First is to outline a plan that assesses the effectiveness of the market structure for company operations. Next is to determine two factors which could cause a change in the market structure. Third is analysis of the short and long run cost functions given certain costing information. Then the paper will suggest a pricing policy to enable the food company to maximize profits. Finally, a recommendation of two actions the company should institute in order to improve profitability and deliver more value to their stakeholders. Market Share U.S. consumers have switched gears into a more sustainable path toward healthy eating, which is now influencing the relative growth rates of different food categories (Black Book, 2007). Healthier versions of packaged-foods products have grown rapidly in recent years. These include food products that are either organic, fortified with vitamins or minerals, have reduced sugar, fat, or salt content, are high fiber, soy-based or gluten/lactose-free. In the first assignment the frozen low-calorie food market was in perfect competition. As the popularity of the low-calorie frozen meals...
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...Dismissal Meeting Strategic Human Resource Management HRM500 Dr. Young Brittney Ross May 18,2014 Dismissal meetings are always difficult but most be done to benefit the company and the remaining employees. There are plenty of reasons that a company would have to layoff, it is my job to choose the employees that may not be the best fit for the company. How I view the dismissal procedure or layoffs involves making sure that the reason for dismissal is valid, I would create a written statement or documentation for the reason of dismissal, giving the employee appropriate notice of dismissal, and notifying important agencies if necessary (Kelin,2008). Dismissal usually occur for misconduct or poor performance previous steps would be required such as write up and verbal warnings, as well as the additional steps of investigation and providing and allowing proper documentation. It is important to follow policy and procedure to the T, to avoid potential injustice against the employee and to reduce the possibility of lawsuits in the future. Dismissals and layoffs is a difficult time for employees and the company. I would need to help mangers figure out ways to cope with negative emotions that accompany layoff could have. I would propose three ways that a manager can cope with any negative emotions that may accompany an employee layoff. That would be communicate, Demonstrate continuing long-term interest in the careers of the survivors and last but not least Proactively address the...
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