Bus 599 Assign 2
Assignment 1: Operations Decision
Student’s name: Helen Davenport
Professor’s name: Dr. Chris Walson
ECO550 Managerial Economics and Globalization
8/15/2012
Abstract
This paper will describe the details of a fictitious business and will assess the current environmental scan factors while determining the factors that will have the greatest impact on plant operations and management’s decision to continue or discontinue operations. Thirdly, this paper will evaluate the financial performance of the company using the information provided in the scenario; consider all key drivers of performance, such as company profit or loss for both the short term and long term. Also, a recommendation as to how the company can improve its profitability and develop a brief plan to implement the recommendations. Lastly, this paper will assess the circumstances in which the company should discontinue operations while providing a set of reasonable rationales.
1. Briefly describe the details of the fictitious business that you created for this assignment.
The fictitious business in this assignment is named TopShop, which is an American multinational retailer with its main headquarters in New York. It is a high end fashion brand that specializes in fashion clothing, shoes, make-up and accessories. Currently, TopShop has 150 workers for its factory in New Jersey, and has hired a consultant to offer some advice that could help it make a decision as to whether it should shut down completely or continue operations. In addition, TopShop has 100 workers that produce 6,000 units of output per month (working 20 days / month). The daily wage (per worker) is $70, and the price of the firm’s output is $32. The cost of other variable inputs is $2,000 per day. The firm’s fixed cost is “high enough” so that the firm’s total costs exceed its total revenue. The marginal cost of
Student’s name: Helen Davenport
Professor’s name: Dr. Chris Walson
ECO550 Managerial Economics and Globalization
8/15/2012
Abstract
This paper will describe the details of a fictitious business and will assess the current environmental scan factors while determining the factors that will have the greatest impact on plant operations and management’s decision to continue or discontinue operations. Thirdly, this paper will evaluate the financial performance of the company using the information provided in the scenario; consider all key drivers of performance, such as company profit or loss for both the short term and long term. Also, a recommendation as to how the company can improve its profitability and develop a brief plan to implement the recommendations. Lastly, this paper will assess the circumstances in which the company should discontinue operations while providing a set of reasonable rationales.
1. Briefly describe the details of the fictitious business that you created for this assignment.
The fictitious business in this assignment is named TopShop, which is an American multinational retailer with its main headquarters in New York. It is a high end fashion brand that specializes in fashion clothing, shoes, make-up and accessories. Currently, TopShop has 150 workers for its factory in New Jersey, and has hired a consultant to offer some advice that could help it make a decision as to whether it should shut down completely or continue operations. In addition, TopShop has 100 workers that produce 6,000 units of output per month (working 20 days / month). The daily wage (per worker) is $70, and the price of the firm’s output is $32. The cost of other variable inputs is $2,000 per day. The firm’s fixed cost is “high enough” so that the firm’s total costs exceed its total revenue. The marginal cost of
References: Aguilar, F. J. (1967). Scanning the Business Environment. New York, NY: McMillan. Michaels, R. J. (2011). Transactions and Strategies. 1st Edition. Mason, OH: Cengage Learning. He, Y. Q., Chan, L. K. & Wu, M. L. (2007). Balancing productivity and consumer satisfaction for profitability: Statistical and fuzzy regression analysis Original Research Article. European Journal of Operational Research, 176(1), 252-263 Drake, M., Gerde, V., & Wasieleski, D. (2011). Socially responsible modeling: a stakeholder approach to the implementation of ethical modeling in operations research. OR Spectrum, 33(1), 1-26. doi:10.1007/s00291-009-0172-9