Operation Decision Essay

826 Words Feb 3rd, 2013 4 Pages
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$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
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This plan supports higher revenue and eliminate unnecessary spending costs in areas where such activity is avoidable.

A number of clear solutions are presented in effort to promote longterm improvement. These solutions stress having monthly staff trainings for bettering the overall quality of leadership that will give way to analytical insight needed in difficult matters of problem solving without referring to a specialized consultant as a first step. Having a sense of strategic direction will regulate the number of workers employed and manage the firm's capital budget for primary expenses such as production components or cost variables of priority.

The following calculationn assisted in illustrating decision to "Continue Operations":

100 workers = $70 per day ; $7000 = employee wage cost per day

$7000 x 30 days = $210,000 per month (spent of employee wages)

Other variable input cost = $2000 per day

$2000 x 30 days = $60,000 per month (spent on variable cost)

Taking into account that the marginal cost of the last unit is $30:

'6000 units in all' were produced ;

6000 (total units) x $30 per unit = $180,000 per month (spent on production output)

Monthly Calculation:

employee wages - $210,000 (spent cost)

other variable interest cost - $60,000 (spent cost)

production units of output - $180,000 (revenue generated)

$270,000 - total spent cost

$180,000 - revenue

Currently spending $90,000 over

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