Eco 550 Assignment 2
Assignment 2: Operations Decisions
Eco 550 Managerial Economics
The purpose of this paper is to discuss the reasons why I, as a hired management consultant, would suggest a fictitious company either shut down operations or continue them based on its operational health. In order to do this I must first describe, in brief, the basic details of the company I have created to provide some tangibility to this assignment. Then I will assess the current environmental scan factors relevant to the decision making process, focusing on those which have the greatest impact on both the overall plant operations and the managerial decision of whether or not to discontinue operations. After which I will evaluate the company’s financial performance using data provided for the assignment related to the fictitious scenario. In doing this I will need to consider the key drivers of said performance including the company’s profit or loss in both the short term and long term, discussing how each of these factors influence the managerial decisions. Next I will recommend how the company might improve its profits in order to deliver more stakeholder value and provide a basic plan of how to best implement the recommendation. Finally I will assess those circumstances under which the company should discontinue operations as well as how management should react when confronted with those circumstances.
For this assignment I have created Greatneck Incorporated, a manufacturer based in northeast Ohio. Greatneck Inc. key competency is its manufacturing of space heaters which is mainly distributes through the big box retail stores such as Wal-Mart, Target, Home Depot, and Lowe’s. Greatneck’s 100 workers produce 6,000 space heaters each month at a price of $32. The plant’s work schedule is for 20 days each month and each worker earns $70 per day while the variable cost for Greatneck is $2000 per day.
Concerning the current environmental scan factors we must understand that they fall into six
Eco 550 Managerial Economics
The purpose of this paper is to discuss the reasons why I, as a hired management consultant, would suggest a fictitious company either shut down operations or continue them based on its operational health. In order to do this I must first describe, in brief, the basic details of the company I have created to provide some tangibility to this assignment. Then I will assess the current environmental scan factors relevant to the decision making process, focusing on those which have the greatest impact on both the overall plant operations and the managerial decision of whether or not to discontinue operations. After which I will evaluate the company’s financial performance using data provided for the assignment related to the fictitious scenario. In doing this I will need to consider the key drivers of said performance including the company’s profit or loss in both the short term and long term, discussing how each of these factors influence the managerial decisions. Next I will recommend how the company might improve its profits in order to deliver more stakeholder value and provide a basic plan of how to best implement the recommendation. Finally I will assess those circumstances under which the company should discontinue operations as well as how management should react when confronted with those circumstances.
For this assignment I have created Greatneck Incorporated, a manufacturer based in northeast Ohio. Greatneck Inc. key competency is its manufacturing of space heaters which is mainly distributes through the big box retail stores such as Wal-Mart, Target, Home Depot, and Lowe’s. Greatneck’s 100 workers produce 6,000 space heaters each month at a price of $32. The plant’s work schedule is for 20 days each month and each worker earns $70 per day while the variable cost for Greatneck is $2000 per day.
Concerning the current environmental scan factors we must understand that they fall into six