Operations Decisions

1798 Words Oct 4th, 2014 8 Pages
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
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Plant managers monitor production, which controls whether production is up or down. Suppliers are important because the cost of the components to produce the product is important toward the profitability of that finished product. External factors such as the government and regulatory entities should also be factored into the decision-making. The government regulation regarding import and export procedures, including customs costs, and shipping costs and other factors also hold importance in the decision. Operations managers compile all the financial information on production and overall company operations and prepare a “SWOT” analysis to determine where the company’s finances stand. These evaluations including the financial analysis result in management’s decision to determine if the organization should close its doors or continue operations.
Financial Performance Evaluation In evaluating the financial performance of Digisafe, the computation of the following figures reveals the profit or loss for the short term and long-term basis. The information for the calculation includes 100 workers, 70 per day, 20 per month, units 6000, price 32, and other variable costs at 2,000 per day. See chart below: The entity must sell its products at the fair market price in a perfect pure competitive market. The organization can operate either with a transitory profit or in a temporary
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