Eco550 Assignment 1

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Assignment 1: Operations Decision
Gregory Despinos
Soosan Shahrokh, Ph.D.
Economics 550
07/19/2012

Briefly describe the details of the fictitious business that you created for this assignment.
The business that I founded in 1997 is a T-Shirt producing and printing company. T-Shirts Inc produces 100,000 units per month and employs 15 workers. The company is relatively small and produces and sells t-shirts at wholesale prices to various channels. The company also offers t-shirt printing press services to orders greater than 1000. The target market for the company is small to medium size businesses. The company has seen positive growth in the last five years and looking to expand its services which will require increased production & labor force cost. The daily wage per worker is $80 (working 20 days per month). The company’s output price is $29 which is a balanced. The company’s fixed cost remains profitable which can open the company to newer markets. The marginal cost of its last unit is $3.00.

Assess the current environmental scan factors. Determine the factors that will have the greatest impact on plant operations and management’s decision to continue or discontinue operations. “Environmental scanning is the acquisition and use of information about events, trends, and relationships in an organization's external environment, the knowledge of which would assist management in planning the organization's future course of action.” (Aguilar, 1967) There are several internal and external factors to consider when considering whether to continue or discontinue operations. “The external factors include the economy, demographics, government actions and marketing trends. The internal factors include personnel, company structure, abilities and infrastructure.” (Ehow.com) The factors that will have the greatest impact on plant operations include the business operations, marketing climate, and financial atmosphere. The business operations will determine the...
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