Operations Decision

Topics: Costs, Variable cost, Total cost Pages: 4 (1124 words) Published: December 8, 2012
This document will briefly describe the details of a fictitious business (X-QUIZIT INC). It will show an assessment of the current environmental scan factors that are relevant to the business decision making process and the factor that will have the greatest impact on the business operations and management’s decision to continue or discontinue its operation. It will also show an evaluation of the financial performance of the company using the information provided in the scenario, with consideration given to all the key drivers of performance such as company profit or loss for both short and long term and how each factor influences managerial decisions. The document will also show recommendation on how the company can improve its profitability to deliver more value to its stakeholders and the development of a plan to implement the recommendations. Finally, it will show an assessment of the circumstances in which the company should discontinue operations and how management should react when confronted with these circumstances. Brief Description of the Fictitious Business Created for Assignment

The name of the business use in this assignment is X-QUIZIT INC (X-QUIZIT). This company is a maker of high end clothing headquartered in New York with fifteen additional stores throughout the United States, with over 250 employees. While the company is known for making several types clothing, including shirts and sport jackets, it specializes mostly in making jeans. Over 50% of its revenue comes from the sale of jeans. The company currently uses over 2.

one hundred of its employees to produce 6,000 units of output per month (working 20days per month). The daily wage per worker is $70, and the price of the firm’s output is $32. The cost of the other variable inputs is $2,000 per day. The firm’s fixed cost is considered high enough, such that the total costs exceed its total revenue. The marginal cost of the last...
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