...`The price mechanism can be relied upon to provide efficiency'. Discuss. In order to discuss the above, it is necessary to provide not only a definition of the price mechanism, but also an explanation of its application in real-world microeconomics. John Sloman describes the price mechanism as ‘the system in a market whereby changes in price in response to changes in demand and supply have the same effect of making demand equal to supply’ (Sloman, 2012). We will also look at the theory of the price mechanism. The fundamental economic problem is that, human needs are, for intensive purposes, infinite, whereas resources are scarce, and are capable of alternative uses. Because of this, choices must be made about: what to produce, how much to produce and how to produce it, and for whom. In response to the fundamental economic problem, for producers to be efficient, they must allocate their resources efficiently. The price mechanism, in theory, allows for more efficient production. In practice, under the price mechanism, all goods and services produced have a market price, which is determined by the market forces of supply and demand. The price mechanism means that with shortages in supply of a good the price will rise. As the price increases, producers supply more (as they will be more profitable), and demand falls due to the rise in prices, so consumers buy less. s The diagram above shows the rise in price (from P1 to P2) and...
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...‘The Price Mechanism Can Be Relied Upon To Provide Efficiency’ I will first discuss this in very simple terms concerning such matters as the law of supply and demand. I will then present the situations in which inefficient results are created and also areas in which Pareto efficiency is of particular significance. Generally, if the demand for a good increases its price will increase as supply becomes limited for consumers. This in turn acts as an incentive for producers to supply higher output and as supply increases the price will eventually go down and equilibrium will be achieved. This also works for the opposite as demand falls. In addition to this, in a perfectly competitive market firms will aim to produce where marginal revenue (MR) equals marginal cost (MC). This creates efficiency because if marginal revenue is higher than marginal cost then consumers are worse off because they are being charged high prices and thus rival competitors will take advantage with a lower supply price. On the other hand, if marginal cost is higher than marginal revenue then the firm is not using their resources efficiently as each additional unit incurs a marginal net cost. The only exception to this would be if the point at which MR is equal to MC was lower than the average cost (AC) curve, since the marginal revenue would not even cover the average cost. Therefore, we can see how the law of supply and demand and the result of a perfectly competitive market allows the price mechanism to...
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...market were GM, ford Jeep etc. But this was a rapidly growing market. 2. Q. How has MB reacted to the changing world for luxury automobiles? Ans: Luxury Car makers were hit hard by the recession the early 1990s. The car sales plunged and companies were showing losses. Mercedes Benz struggled with product development, cost efficiency, material purchasing, and problems in adapting to changing markets to face the tough market conditions Mercedes made several changes within its business. Mercedes streamlined the core business, reduced parts and system complexity, established simultaneous engineering programs with suppliers. In search of additional market share and new segments, MB started developing new range of products. New products introduced were the C-Class in 1993, the E-class in 1995, the new sportster SLK in 1996, and A class and M class all-activity vehicle (AAV) in 1997. In addition, MB moved its manufacturing facilities closer to the market that is the USA. Most, importantly it became more customer oriented and used customer opinions for developing almost every part of the car 3. Q. Using Cooper’s cost, quality and functionality chart, discuss the factors on which MB competes with other automobile producers such as Jeep, Ford, and GM. Ans. MB competes with other automobile producers such as Jeep, Ford, and GM in the AAV range. Also MB competes with Lexus, BMW, Audi etc. in the luxury cars segment. MB tries to develop its product along with these function groups by...
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...1 Auction Based Mechanisms for Electronic Procurement T. S. Chandrashekar, Y. Narahari, Charles H. Rosa, Devadatta Kulkarni, Jeffrey D. Tew, and Pankaj Dayama Abstract— This article reviews recent research and current art in the area of auction based mechanisms for electronic procurement. These mechanisms are becoming increasingly relevant in modern day e-procurement systems since they enable a promising way of automating negotiations with suppliers and achieving the ideal goals of procurement efficiency, cost minimization, and agent based deployment. The survey delineates different representative scenarios in e-procurement where auctions can be deployed and describes the conceptual and mathematical aspects of different categories of procurement auctions. We discuss three categories: (1) multi-unit auctions for a single homogeneous type of item; (2) combinatorial procurement auctions where the buyer seeks to procure a bundle of multiple items and the suppliers bid for subsets of the bundle; and (3) multi-attribute auctions where the procurement decisions transcend cost considerations alone, to take into account lead times, logistics costs, and other important attributes. In all three cases, the winner determination problem and the determination of payments turn out to be interesting and challenging combinatorial optimization problems. In our review, we present mathematical formulation of procurement scenarios under each category, bring out the challenge involved in solving...
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...INSERTED MY RECOMMENDED SOLUTIONS IN BOLD ITALICS AFTER EACH OF THE QUESTIONS ON THIS EXAMINATION PAPER." Question I For this question you can choose to answer either (A), or (B)' but NOT BOTH. A. Assume that the Asset Demand for money is relatively elastic or flat, and that the Investment Demand Curve, is relatively inelastic or steep. Compare and contrast the effect of an increase in Money Supply upon the overall level of economic activity, using both the traditional transmission mechanism, and in the IS'LM model. Are there any major differences between these 2 models? Your answer should include all relevant diagrams. (20 marks IN RELATION TO THIS QUESTION, STUDENTS WOALD BE EXPECTED TO IDENTIFY AND EXPILIIN THE TRADITIONAL TRANSMISSION MECHANISM AND BRIEFLY EXPLAIN ITS CONSTITUENT PARTS; NAMELY MONEY MARKET, THE INVESTMENT DEMAND CARVE, AND FINALLY THE 45 DEGREE LINE PRODUCT MARKET MODEL. THEY WOALD BE EXPECTED TO BRIEFLY DESCRIBE THE EFFECT OF AN INCREASE IN MONEY SAPPLY WHEN THE ASSET DEMAND CURVE FOR MONEY IS RELATIVLY FLAT AND THE INVESTMENT DEMAND CT]RVE IS RELATIVELY STEEP. BETTER ANSWERS WOALD EXPLAIN WHAT THE LATTER 2 SLOPES INDCATE ABOUT THE PARTICULAR MARKETS. ANSWERING THIS QAESTION STUDENTS SHOALD IDENTIFY THE 2 PARTICULAR WEAKNESSES THAT CHARACTERISE THE TRADITIONAL TRANSMISSION MECHANISM. THE ARTE THE 2 PROBLEMS OF TryHEN INTERDEPENDENT VARIABLES AND IN TARN UNCERTAIN OR ANPREDICTABLE OR INDETERMINATE OUTCOMES OR RESALTS...
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...Florida Atlantic University April 25, 2013 | I. INTRODUCTION The use of analytical procedures on financial data to asses risk and detect fraud is standard practice for auditors; however, using only financial data has been shown to be ineffective in uncovering many frauds. (3-Brazel) Auditors and forensic accountants find that when nonfinancial performance measures and financial data are compared inconsistencies can be exposed, and fraud risk revealed, that otherwise would have gone undetected. (3-Brazel) There are a number of nonfinancial performance measures which can raise questions about financial reporting and the corporations environment; although they are not directly related to the accounting of the business they function as possible indicators or symptoms of fraud; this can help detect wrong doing sooner than analytical procedures alone. This paper will describe common nonfinancial performance measures and through the use of a fictional corporation, show how nonfinancial performance measures and can expose fraud and fraud risk and discuss the use of red-flags and the future of nonfinancial measures in auditing, investing and investigations. II. NON FINANCIAL MEASURES AND CORPORATION X The American Association of Accountants (AAA) published a commentary paper on the NFM research done by Brazel et al, below is financial statement data from a fictional corporation created to illustrate the findings. (Figure 1)The percentage of sales figures for cost of...
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...Budgeting and Control MHRM 502-2 Supported Distance Program June 2015 Addis Ababa Table of Contents Title Page Unit One: Overview of Budgeting and Control .............................................................................. 2 1.1. The Basic Concepts of Budget and Budgeting ................................................................ 2 1.2. Definition of Budget ........................................................................................................ 3 1.3. Budgeting and Forecasting .............................................................................................. 4 1.4. Budgeting and Management ............................................................................................ 6 1.5. Budgeting and Planning ................................................................................................... 6 1.5.1 Purposes of Planning and Budgeting systems ................................................................. 7 1.5.2 Limitation of Budgeting................................................................................................. 10 1.5.3 Planning Cycles ............................................................................................................. 11 1.6. Budgeting process (Budget cycle) ................................................................................. 14 1.6.1 Designing the budget ...............................................................................
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...costs usually include the topic of marketing efficiency. An efficient marketing system is one capable of moving goods from producer to customer at the lowest cost consistent with the provision of the services that customers demand. Once the costs involved in marketing have been identified then means can be devised to make the system more efficient. Increases in efficiency can be achieved in a variety of ways: by increasing the volume of business using improved handling methods, investing in modern technology, locating the business in the most appropriate place, implementing better layouts and working practices in production, improving managerial planning and control and/or by making changes in marketing arrangements (e.g. through horizontal or vertical integration). Objectives Of The Chapter The chapter is aimed at enabling the reader to:- * Understand what the term marketing efficiency means and the varied forms it can take * Distinguish between marketing efficiency and marketing effectiveness * Identify the factors which influence the level of efficiency and level of effectiveness of a marketing system, and * Determine how marketing costs and margins can be calculated. Structure Of The Chapter The chapter begins with an overview of the twin concepts of marketing efficiency and effectiveness before examining the different forms which marketing efficiency takes, i.e. operational efficiency and pricing efficiency. There then follows a discussion of the reference...
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...composite of several existing product features, selected to demonstrate the use of encryption for confidentiality, and trusted system technology for a local area network. Local area network technology/topology overview This essay addresses LAN security from the viewpoint of open systems interconnection (OSI). That is, we focus on the seven-layer OSI protocols (illustrated in Figure 1); in fact, we concentrate on the lower layers. This focus follows the history of LANs; that is, the OSI communications problems had to be solved before open systems could be addressed. It is usually not good form to start an essay by discussing what is not covered, but that is necessary in this case. Some people think of LANs in terms of the services they provide to users. This viewpoint is essentially looking at a LAN as a...
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...M02_TURB3315_05_SE_C02.QXD 9/4/07 7:54 PM Page 42 2 E-MARKETPLACES: STRUCTURES, MECHANISMS, ECONOMICS, AND IMPACTS Learning Objectives Upon completion of this chapter, you will be able to: 1. Define e-marketplaces and list their components. 2. List the major types of e-marketplaces and describe their features. 3. Describe the various types of EC intermediaries and their roles. 4. Describe electronic catalogs, shopping carts, and search engines. 5. Describe the major types of auctions and list their characteristics. 6. Discuss the benefits, limitations, and impacts of auctions. 7. Describe bartering and negotiating online. 8. Define m-commerce and explain its role as a market mechanism. 9. Discuss competition in the digital economy. 10. Describe the impact of e-marketplaces on organizations and industries. CHAPTER Content How Blue Nile Inc. Is Changing the Jewelry Industry 2.1 E-Marketplaces 2.2 Types of E-Marketplaces: From Storefronts to Portals 2.3 Transactions, Intermediation, and Processes in E-Commerce 2.4 Electronic Catalogs and Other Market Mechanisms 2.5 Auctions as EC Market Mechanisms 2.6 Bartering and Negotiating Online 2.7 E-Commerce in the Wireless Environment: M-Commerce and L-Commerce 2.8 Competition in the Digital Economy and Its Impact on Industries 2.9 Impacts of EC on Business Processes and Organizations Managerial Issues Real-World Case: Wal-Mart Leads RFID Adoption Appendix 2A: Build-to-Order Production ISBN: 0-558-13856-X 42 ...
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...False 7. The Center for Audit Quality was started by the International Federation of Accountants. True False 8. The Center for Audit Quality has the primary authority to set auditing standards. True False 9. In an audit, management is considered the “client”. True False 10. Auditing is the process of attesting to assertions about economic actions and events. True False 11. Auditing is the process of verifying the accuracy of the financial statements. True False 12. Internal auditing only provides assurance about internal control effectiveness. True False 13. Auditing exists because users need unbiased information on which to assess management performance and make economic decisions. True False 14. A free market can only...
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...C O V E R S T O R I E S R O U N D TA B L E C O M M E N TA R Y Transatlantic Divergence in GE/Honeywell: Causes and Lessons BY DONNA E. PATTERSON AND CARL SHAPIRO welcome, even when they are predicted to cause leading firms to gain market share. Second, the procedures in place in Europe contributed to the ability of the Competition Commissioner to block the proposed merger of GE and Honeywell based on dubious economic grounds and very weak evidence. In particular, the absence of timely and independent judicial review of the Commissioner’s decision that a combination is incompatible with the Common Market gives enormous discretion to the Competition Commissioner and to the Commission’s Merger Task Force. We discuss below how the interplay of these two trans-Atlantic differences led to the divergent results in GE/Honeywell. The EU’s Conglomerate Case A key driver of the proposed merger was the desire of GE and Honeywell to combine their complementary product lines in the civil aerospace industry.2 GE makes, sells, and services large aircraft engines. Honeywell, itself the result of a 1999 merger between Allied Signal and Honeywell, makes small aircraft engines, various avionics components, and other “non-avionics” components, such as environmental control systems, wheels and brakes, and auxiliary power units. At its heart, the merger was neither horizontal nor vertical, but conglomerate. In fact, the GE/Honeywell merger was remarkably “clean” in terms of horizontal...
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...resources and line managers to solve business-related problems”. I believe this definition assists on tackling the above question. However, Bamberger and Meshoulam “Conceptualise human resource strategy as an outcome: the pattern of decisions regarding the policies and practices associated with the HR system”. In my view, HRS is a set of ‘processes and activities’ that when implemented, result in an outcome. In aim to justify this statement by discussing the topic of human resource strategy in relation to the sub-headings listed above. By examining the reasons or ‘rationale’ for the emergence of human resource strategies in the modern business environment, the value, various strategy approaches, types and the concept of fit, I believe I can underline the importance of a well devised HRS to any overall business strategy or plan. Modern businesses and the economic environments in which they operate are very different from the organizations and economies examined by Chandler in his studies of ‘managerial capitalism’ (late 19th Century through to the 1970s). The development of technology, and the creation of global economies have resulted in a significant increase in efficient and effective competition within all industries operating in market economies. Firms con longer rely on competing aggressively simply on the reliable favorites of achieving economies of scale and creating ‘barriers to entry’ within their markets etc. Firms have become more market orientated as opposed...
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...BEST PRACTICES FOR THE HEDGE FUND INDUSTRY ~~~~~ REPORT OF THE ASSET MANAGERS’ COMMITTEE TO THE PRESIDENT’S WORKING GROUP ON FINANCIAL MARKETS January 15, 2009 * * * THE ASSET MANAGERS’ COMMITTEE Eric Mindich, Chair (Eton Park Capital Management) Anne Casscells (Aetos Capital, LLC) Marc Lasry (Avenue Capital Group) William Von Mueffling (Cantillon Capital Management) Anne Dinning (D. E. Shaw & Co., L.P.) Jonathon S. Jacobson (Highfields Capital Management) James S. Chanos (Kynikos Associates LP) Daniel S. Och (Och-Ziff Capital Management) Daniel H. Stern (Reservoir Capital Group) Edward Mulé (Silver Point Capital, L.P.) COUNSEL TO THE ASSET MANAGERS’ COMMITTEE Sullivan & Cromwell LLP Schulte Roth & Zabel LLP * * * Table of Contents EXECUTIVE SUMMARY ............................................................................................... i BEST PRACTICES ...........................................................................................................1 Disclosure and Investor Protection ..................................................................................1 I. II. Disclosure of Material Information to Investors ...................................................1 Ongoing Information Provided to Investors..........................................................5 A. B. V. I. II. Side Letters....................................................................................................10 Parallel Managed Accounts...
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...Journal of Management http://jom.sagepub.com/ What We Know and Don't Know About Corporate Social Responsibility: A Review and Research Agenda Herman Aguinis and Ante Glavas Journal of Management 2012 38: 932 originally published online 1 March 2012 DOI: 10.1177/0149206311436079 The online version of this article can be found at: http://jom.sagepub.com/content/38/4/932 Published by: http://www.sagepublications.com On behalf of: Southern Management Association Additional services and information for Journal of Management can be found at: Email Alerts: http://jom.sagepub.com/cgi/alerts Subscriptions: http://jom.sagepub.com/subscriptions Reprints: http://www.sagepub.com/journalsReprints.nav Permissions: http://www.sagepub.com/journalsPermissions.nav >> Version of Record - May 29, 2012 OnlineFirst Version of Record - Mar 1, 2012 What is This? Downloaded from jom.sagepub.com at Sunway Education Group on April 23, 2014 Journal of Management Vol. 38 No. 4, July 2012 932-968 DOI: 10.1177/0149206311436079 © The Author(s) 2012 Reprints and permission: http://www. sagepub.com/journalsPermissions.nav What We Know and Don’t Know About Corporate Social Responsibility: A Review and Research Agenda Herman Aguinis Indiana University Ante Glavas University of Notre Dame The authors review the corporate social responsibility (CSR) literature based on 588 journal articles and 102 books and book chapters. They offer a multilevel and multidisciplinary theoretical framework...
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