Operational Decisions

For both scenarios, the firm’s output price and average variable cost are the same. The difference lies in the average total cost. Because the total fixed cost is significantly higher, the average total cost is also significantly higher. It would be highly recommended that the firm shut down if total fixed costs are equal to 3,000,000. In the first scenario, the firm is also losing money. We would recommend laying off ten percent of the staff (5000 employees) to account for the $400,000 loss. However, it is important to note, employee productivity must be increased to 4.44 in order to maintain the 200,000 units per day. This would allow the firm to operate in a break even state.

On the other hand, the marketing department allocation cost of 0.54 is not reasonable too because they want to use the same amount as for the old product. The allocated fixed expenses for the new product should be not more than a dollar and not less than 0.70 cent per 1 kg of the complete meal.

4. Conduct a feasibility analysis on the company, being sure to consider its market potential, industry attractiveness, and

I would suggest them to check there total revenue and their total variable cost, if the firm is able to cover its total variable cost and even a small portion of fixed cost, it would be better to run the business. On the other hand if firm is not even able to cover its total variable cost

G.G. Dess, G.T. Lumpkin, M.L. Taylor, A.A. Thompson, and A.J. Strickland III, Strategic Management (Boston, McGraw Hill, 2004) pp. 141-148.

Economic Development: Growth is associated with structural, social change and change in the important institutions of the economy.

Kessler, E. H. (Ed.) (2013). Encyclopedia of management theory (Vols. 1-2). Thousand Oaks, CA: SAGE Publications Ltd. doi: 10.4135/9781452276090

Suggest key actions that management should take in order to confront these circumstances. Provide a rationale for your response. (Hint: Your firm’s price must cover average variable costs in the short run and average total costs in the long run to continue operations.)

The main problem for the company is to facing the high scrap rate and quality of the product. Another reason is the machine breakdowns, every time the machines stopped and restarted will make scraps out from the machines. Last reason is to produce new product will cause high

Based on your analysis above, make at least two (2) recommendations as to how each company could improve its working capital positions. Provide support for your recommendations.

The primary reason for the Borden Foods to divert itself from snacks is to emphasis its efforts and resources in the growth of their whole-wheat meal segments. Because of this valuation they had and a growth plan they had they decided to announce sale of Cracker Jack in 1997. The management team of Broaden also recognized that with the increase in competition they have not been able to successfully grow the sales figure in past five years. Also because the Cracker Jack brand has various packaging options and has been maintaining a huge product line of 32 Stock-Keeping Units (SKUs). However, currently Broaden production facility had only 32 percent of space allocated to Cracker Jack Products and has been operating at 32% of its

owners have found that demand for their product has outstripped their ability to supply it. They

Baye, M.R., Prince, J.T. (2014). Managerial Economics and Business Strategy. New York, NY: McGraw-Hill Irwin

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. It also tells us 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.

The raw material are using waste.they might face the availability of raw materials and Recycling companies are developing.