Setting up a business - new business case study questions Essay Example for Free

Setting up a business new business case study questions Essay AO1: Knowledge AO2: Application and analysis: developing your explanation and using examples relevant to Josefs business. Explain two ways in which a bank can help a new business such as Josefs (4 marks) The first way in which a bank can help Josef is by giving him a loan of à ¯Ã‚ ¿Ã‚ ½10,000 to help him to set up his business, there are many start up costs ie: equipment and computers that he will need to cover and it is important that he has enough money. Another way they can help is by offering advice; the bank can appoint a small business advisor as Josef is a young, inexperienced small business owner, they can help him with financial issues, keeping records and taxes. Would completing a business plan make sure that Josefs business was successful? Give reason for your answer. (9 marks) AO1: Kn. 1 mark AO2: App 2 marks (explain and developing your point, with examples relevant to Josefs business AO3 / AO4: Evaluation: Justify (give reasons) your ideas. Drawing up a business plan would certainly help Josefs business but it does not guarantee its success. It is important for Josef to put together a plan as it helps him realise everything that needs to be done, for example, all the different market research and promotions. He will also put together forecasts for cash flow and budgets and this will help him foresee any problems so therefore he can organise an overdraft for that time. The business plan will certainly help him obtain a loan which will allow him to invest the money into developing his service and keeping ahead of the competition this will help him be successful. On the other hand the business plan may not be accurate and could lead to bad decision making. The banks may not have faith in his business idea and may not lend him money, therefore not having cash in his business to cover all his start up costs. More importantly he may not run the business very well and this will lead to many problems further down the line. I think a business plan is very important to guide an entrepreneur but it must also be flexible and reviewed over time. Explain two reasons why someone might choose to buy a franchise from The Greenhouse (5 marks) AO1: Kn: state reasons AO2: Ap An give the benefits and provide a detailed explanation using examples from the case study As stated in the case study the Greenhouse restaurants are known for their quality food and quality service, the business is already a success and an entrepreneur maybe interested because they know the business will do well because of its excellent reputation, it is seen as less of a risk. Another benefit of owning the Greenhouse franchise is that an entrepreneur will receive training from the franchiser, much of the hard work is done in terms of marketing and design of the restaurants and menus etc this will save an entrepreneur a lot of cost and therefore allowing them to enjoy higher profit margins. Phil and Sandra are thinking of offering higher wages than those paid in other restaurants. Do you think that this is the best way to motivate staff? Give reasons for your answer. (9 marks) AO1: Kn. 1 mark AO2: App 2 marks (explain and developing your point, with examples relevant to the business) AO3 / AO4: Evaluation: 6 marks Justify (give reasons) your ideas. There are many ways in which Phil and Sandra can try to motivate their workforce to work harder. Offering higher wages is just one way and in many cases can be appropriate. Money is the main motivate for many people, especially those employed in the low wage catering industry and if wages increase your workers are less likely to leave and more likely to feel happier in the work place and work more productively. Some people view wages as an indication of their worth however many other people and theorists believe that other things are just as important, such as free health insurance, being recognised for hard work through rewards such as employee of the month and also given trust and extra responsibility. All of these are important in building confidence of your workforce and therefore an effective workforce. Although money is a motivator for some it could increase the costs of Phils and Sandras business and they maybe better off choosing other non-monetary methods to ensure they make as much profit as they can. Explain why batch production might be a better way for Connie to make cakes (5 marks) AO1: Kn: state reasons AO2: Ap An give the benefits and provide a detailed explanation using examples from the case study Connie makes different types of cakes, birthday, weddings and other occasions, if she bakes them in batches than it will be more efficient as it can save on costs ie: cooking fuel. It will also save a lot of time as baking one individual cake at a time would take much longer than if they were baked in batches. Being more efficient will save money and help connie make more profit.

Essay examples --

Social Skills While there are many definitions of social skills, they all have the same basic meaning. Social skills are skills needed to get along and communicate with others. They can be taught, practiced and learned. Social skills are important to function throughout life. These include verbal and nonverbal skills including tone of voice, speech volume, chosen words, body language, gestures and facial expressions. These skills are what help people know what to say, how to say it, what the best choices are and how to behave in a variety of places and experiences (What are Social Skills, n.d.). Good social skills tend to bring a positive, safe school environment. They also aid in resiliency when faced with a crisis or stressful events. People who possess good social skills look for appropriate ways to relieve frustration and aggression and also promote safety. Poor social skills often lead to difficulties in interpersonal relationships and many times these people are rejected by peers. There is decreased academic performance and often trouble with the law. These individuals may show signs of depression, anxiety and aggression. When navigating the social world, three main processes are used: Seeing, Thinking, and Doing (Kennedy-Moore, 2011). Social seeing is the ability to notice what others in a group are doing and being able to pick up cues on how to act while sorting right from wrong. It also includes noticing context such as formal or informal. It includes determining who the group is and how one fits into that group. People who are able to see within the social world will notice if someone is uninterested or annoyed. They will be able to adapt to these cues and try to make things better. If one lacks this ability, he... ... was nurture. She learned what she experienced and that was life with dogs. Since all children are born to be social, she learned otherwise. She adapted. Has she remained with a family, she may have been lacking some social skills but not all of them. Some children are born more outgoing so socialization comes easier. This is an example of nature. Some children are born autistic which is also an example of nature. As with all nature versus nurture debates, there seems to be evidence of it being a combination of the two that emerge. Social skills start to develop before birth. They continue to be gained and refined throughout life. Early detection of problems with social skills is critical to get the most out of social skills training methods. Social skills can be taught, practiced and learned throughout life but this process becomes more difficult with age.

Hp Case Study

T A B L E O F C O N T E N T S 1. INTRODUCTION4 Hewlett-Packard: The Company4 The HP Way4 2. Current Situation4 Current Performance4 Strategic Posture4 Mission Statement of Hewlett Packard4 Vision statement of Hewlett Packard5 Improved Mission statement5 Improved Vision statement5 Why? 5 Comparison of Mission statement to a leading competitor statement5 Objectives:5 Strategies:6 The Current Strategy6 Focus on Your Customer6 Create Measurable Goals6 Create Major Initiatives6 3. Strategic Managers7 Board of Directors7 Top Management7 4. External Environment(EFAS Table)7MEGA Scanning(PEST analysis)7 Task Environment (Porter Five forces Model)7 5. Internal Environment (IFAS Table)8 Corporate Structure8 Corporate culture8 Corporate resources8 Marketing8 Finance8 R&D8 Operations9 Human Resources9 Information System9 Market Position9 6. Strategic Myopia (Filtration)10 7. Analysis of Strategic Factors10 Situational analysis (SWOT)10 TOWS Matrix13 SPACE Matrix15 INTERPRETATION16 Interpreting t he SPACE Analysis Matrix Diagram17 ixixGrand Starategy matr18 QSPM18 8. Strategic Alternatives and Recommended Strategy20 Recommended Strategy20 9.Implementation20 Expanding Geographically21 Reaching into new market segments21 10. Evaluation and control22 Appendix A23 Gross profit margin ratio23 Operating profit margin23 Net profit margin23 Current ratio23 Quick ratio23 Inventory turnover ratio23 Sales to receivables ratio24 Return on assets24 Debt to worth ratio24 1. INTRODUCTION Hewlett-Packard: The Company In 1938, two Stanford graduates in electrical engineering, William Hewlett and David Packard, started their own business in a garage behind Packard’s Palo Alto home. One year later, Hewlett and Packard formalized their usiness into a partnership called Hewlett-Packard. HP was incorporated in 1947 and began offering stock for public trading 10 years later. Annual net revenue for the company grew from $5. 5 million in 1951 to $3 billion in 1980. By 1997, annual net revenue exceeded $42 billion and HP had become the world’s second largest computer supplier. The company, which originally produced audio oscillators, introduced its first computer in 1966. In 1972, the company pioneered the era of personal computing by introducing the first scientific, hand-held calculator.Hewlett-Packard introduced its first personal computer in 1980. Five years later, HP introduced the LaserJet printer, which would become the company’s most successful product ever. The HP Way In 1956, Bill Hewlett, Dave Packard, and a handful of other HP executives gathered at the Mission Inn in Sonoma, California, to create a set of values and principles to guide their company. The six objectives that this small group subsequently created not only helped shape â€Å"a new kind of company, but ultimately became the foundation for what came to be known as â€Å"the HP way. 2. Current Situation Current Performance See Appendix 1 Strategic Posture Mission Statement of Hewle tt Packard â€Å"We are committed to developing a wide range of innovative products and multimedia services that challenge the way consumer’s access and enjoy digital entertainment. By ensuring synergy between businesses within the organization, we are also constantly striving to create exciting new worlds of entertainment that can be experienced on a variety of different products. † Vision statement of Hewlett Packard We recognize and seize opportunities for growth that builds upon our strengths and competencies. † Improved Mission statement To provide product, services and solution of highest quality and deliver more value to our customers that earn their respect and loyalty. Improved Vision statement To view change in market as an opportunity to grow, to use our profit and to ability to develop and produce innovative products, services and solutions that satisfy customers need. Why? They are brief and to the point. It is highlighting all the main points.Compar ison of Mission statement to a leading competitor statement IBM IBM, we strive to lead in the invention, development and manufacture of the industry most advanced information technologies, including computer systems, software, storage systems and microelectronics. We translate these advanced technologies into value for our customers through our professional solutions, services and consulting businesses worldwide. DELL Dell mission is to be the most successful computer company in the world at delivering the best customer experience in markets we serve. Organization |Customers | |Opportunities: |Threats: | |Globally acceptable software used in the laptops which makes them easy to use and|Competitor’s technology & pricing. | |repair Political-Legal. |Less global coverage than competitor. | | |Low compatibility with non- HP product. |The prices are very affordable. |Booming of mobile technology such as IPAD and IPHONE. | |Potential of using technology is very high. |Due to toug h competition bargaining power of customer is low. | |One of the top market leader with trusted Brand name. | | | | | |The HP is continuously keeps on updating their technology which keeps the | | |interest of the customers intact. | |High product differentiation (servers, Laptops, scanners Printers and others. | | |Expansion of retailed stores for customer convenience. | | |Participation in joint venture | | |Mass production leads to high bargaining supplier power. | |Key External factors |Weight |Rating |Weighted Score | |Opportunities | | | | |1. Globally acceptable software used in the laptops which makes them easy to use and repair |0. 02 |4 |0. 08 | |Political-Legal. | | | | |2. The prices are very affordable. 0. 1 |3 |0. 3 | |3. Potential of using technology is very high. |0. 05 |4 |0. 2 | |4. One of the top market leader with trusted Brand name. |0. 1 |4 |0. 4 | |5. The HP is continuously keeps on updating their technology which keeps the interest of the customers |0. 1 |4 |0. 4 | |intact. | | | | |6. High product differentiation (servers, Laptops, scanners Printers and others. |0. |3 |0. 3 | |7. Expansion of retailed stores for customer convenience. |0. 1 |3 |0. 3 | |8. Participation in joint venture |0. 05 |2 |0. 1 | |9. Mass production leads to high bargaining supplier power. |0. 01 |3 |0. 03 | |Threats | | | | |1.Competitor’s technology & pricing. |0. 2 |3 |0. 6 | |2. Less global coverage than competitor. |0. 01 |3 |0. 03 | |3. Low compatibility with non- HP product. |0. 01 |2 |0. 02 | |4. Booming of mobile technology such as IPAD and IPHONE. |0. 1 |2 |0. 2 | |5. Due to tough competition bargaining power of customer is low. |0. 05 |3 |0. 5 | |Total Weighted Score | | |3. 11 | Current strategy can catch opportunity and avoid threats |Key Internal factors |Weight |Rating |Weighted Score | |Strengths | |Organized into 7 business sections with strong position in each |0. |4 |0. 4 | |The company competes both at local and international leve l. It has increased its competitiveness |0. 1 |4 |0. 4 | |through policies and strategies that supports free-market economies | | | | |Strong financial position |0. 1 |4 |0. | |Leading provider of personal computers and imaging and printing |0. 05 |4 |0. 2 | |Good Operational Efficiency |0. 05 |3 |0. 15 | |Multi-vendor customer services, including infrastructure technology and business process  outsourcing,|0. 05 |3 |0. 5 | |technology support and maintenance, application development and support services  and consulting and | | | | |integration services. | | | | |Highly talented workforce |0. 05 |4 |0. 2 | |Ability to provide end-to-end IT solution H/W, application development and support. |0. 15 |4 |0. 6 | |Hewlett-Packard is a global enterprise and especially after its  merger  with Compaq, the company |0. 5 |3 |0. 15 | |became world’s biggest  computer hardware  and peripherals consort in the world and has ranked 20th in | | | | |the Fortune 500 list. | | | | | Weaknesses | | | | |Financial condition leans very heavily on the state of economy not just in the US but worldwide |0. 5 |2 |0. 1 | |Struggling to Add Value and Remain Profitable in Low-Cost High-Volume PC Business |0. 01 |1 |0. 01 | |R&D department has significantly less investments compared to historical spending |0. 1 |1 |0. 1 | |Slow speed to market or responsiveness The past acquisition of Peregrine made the HP’s  portfolio  even|0. 5 |2 |0. 1 | |more diverse and complete but HP Open View’s lack of mainframe management capabilities created | | | | |several problems | | | | |Lack of in-house management consulting division |0. 1 |1 |0. 01 | |Dependency on third-party suppliers, and our revenue and gross margin could suffer if HP fails to |0. 01 |2 |0. 02 | |manage suppliers properly | | | | |Pay cuts has brought low morale to employees |0. 02 |1 0. 02 | |HP did not yet hit a CMDB  product  that includes discovery and mapping. This cause many customers to | 0. 05 |1 |0. 05 | |switch the brand | | | | |Total Weighted Score |3. 6 | HP has strong internal position TOWS Matrix |IFE |Strengths: |Weaknesses: | | |Organized into 7 business sections with strong |Financial position leans very heavily on the | | |position in each. state of economy not just in the US but | | |The company competes both at local and international|worldwide. | | |level. It has increased its competitiveness through |Struggling to Add Value and Remain Profitable in | | |policies and strategies that supports free-market |Low-Cost High-Volume PC Business. | |economies. |R&D department has significantly less investments| | |Strong financial position. |compared to historical spending. | | |Leading provider of personal computers and imaging |Slow speed to market or responsiveness the past | | |and printing. acquisition of Peregrine made the | | |Good Operational Efficiency. |HP’s  portfolio  even more diverse and complete but| | |Multi-vendor customer service s, including |HP Open View’s lack of mainframe management | | |infrastructure technology and business |capabilities created several problems. | |process  outsourcing, technology support and |Lack of in-house management consulting division. | | |maintenance, application development and support |Dependency on third-party suppliers, and our | | |services  and consulting and integration services. |revenue and gross margin could suffer if HP fails| | |Highly talented workforce. to manage suppliers properly. | | |Ability to provide end-to-end IT solution H/W, |Pay cuts has brought low morale to employees. | | |application development and support. |HP did not yet hit a CMDB  product  that includes | | |Hewlett-Packard is a global enterprise and |discovery and mapping.This cause many customers | | |especially after its  merger  with Compaq, the company|to switch the brand. | | |became world’s biggest  computer hardware  and | | | |peripherals consort in the wor ld and has ranked 20th| | | |in the Fortune 500 list. | |Opportunities: |SO: |WO: | |Globally acceptable software used in the laptops |S1, S2, S3, S7, O3 to develop new products |W5, O8 to develop new HR policy in order to | |which makes them easy to use and repair |(Intensive strategies). |retain the human capital. | |Political-Legal. |S2, S3, S5, O9 (backward integration – Integrative |W6,O9 (backward integration – Integrative | | |strategies). |strategies). | |The prices are very affordable. | | | |Potential of using technology is very high. | | | |One of the top market leader with trusted Brand | | | |name. | | | | | | |The HP is continuously keeps on updating their | | | |technology which keeps the interest of the | | | |customers intact. | | |High product differentiation (servers, Laptops, | | | |scanners Printers and others. | | | |Expansion of retailed stores for customer | | | |convenience. | | |Participation in joint venture | | | |Mass production leads t o high bargaining supplier| | | |power. | | | |Threats: |ST: |WT: |Competitor’s technology & pricing. |S2, S9, T1 to offer products standardizing with |W1,W8, T1 to develop new products (Intensive | |Less global coverage than competitor. |lowest cost for broad range of customers |strategies) and to drop the non-profitable | |Low compatibility with non- HP product. |(competitive strategy). |products. | |Booming of mobile technology such as IPAD and |S2, S3, S5, T4 to develop new products (Intensive | | |IPHONE. strategies). | | |Due to tough competition bargaining power of |S2, S3, S5, T2 to open retail stores worldwide | | |customer is low. |(Forward integration -integrative strategies). | | | | | | SPACE Matrix Internal Strategic Position |External Strategic position | |Competitive Position (CP) |Industry Position (IP) | |Market Share |-2 |Growth Potential |5 | |Product Quality |-1 |Profit Potential |5 | |Customer Loyalty |-2 |Financial Stability |5 | |Technological know-h ow |-2 |Labor cost |2 | |Control over suppliers and |-4 |Technological know-how |5 | |distributors | | | | |Total |-11 |Total |22 | |Average |-2. 2 |Average |3. 7 | |Financial Position (FP) | Stability Position(SP) | |Return on Investment |5 |Technological changes |-4 | |leverage |6 |Rate of Inflation |-2 | |Working Capital |5 |Price range of Competing products |-3 | |Liquidity |5 |Competitive pressure |-4 | |Price earnings ratio |4 |Barriers to entry into market |-2 | |   |   |Demand variability |-3 | |Total |25 |Total |-18 | |Average |5 |Average |-3 | |   |X Value = 3. 67 – 2. 2 = 1. 47 |   |Y value = 5- 3 = 2 | [pic] INTERPRETATION Assessing the SPACE Analysis Scores Each factor in the Strategic Position and Action Evaluation matrix can be quickly judged but there are benefits for exploring each in detail.There are a large number of factors that can be considered and each industry will have its own key features which should be included in the detailed SPACE evalu ation. A few factors to be considered to give you a flavour of what to include in your SPACE analysis are listed below. SPACE Analysis Factors For Financial Strength †¢ Return on Sales †¢ Return on Assets †¢ Cash Flow †¢ Gearing †¢ Working Capital Intensity SPACE Analysis Factors For Competitive Advantage †¢ Market Share †¢ Quality †¢ Customer Loyalty †¢ Cost Levels †¢ Product Range SPACE Analysis Factors For Industry Attractiveness †¢ Growth Potential †¢ Life Cycle Stage †¢ Entry Barriers †¢ Customer Power †¢ Substitutes SPACE Analysis Factors For Environmental Stability †¢ Political Uncertainty †¢ Interest Rates Technology †¢ Cyclical †¢ Environmental Issues Interpreting the SPACE Analysis Matrix Diagram The arrow indicating the strategic thrust can be drawn from the origin by calculating the net result on each axis and plotting this net position. The Aggressive posture in the SPACE Anal ysis Matrix occurs when all the dimensions are positive. The implicit strategy is to aggressively grow the business raising the stakes for all competitors. The main danger is complacency. ? According to the space matrix score HP falls in the â€Å"AGGRESSIVE quadrant† . Their strategies should be one of the following: Vertical and horizontal integration1 Market penetration2Market development3 Product development4 Diversification5 ixixGrand Starategy matr |[pic] | | | |Horizontal diversification | |Concentric diversification | |Conglomerate diversification | |Divestiture | QSPM | |Key Factor |Weight |Horizontal |Market |Product |Horizontal | | | |Integration |Development |Development |Diversification | |   | | |Low Product Cost |This orientation is focused on developing the lowest cost or highest value product. This is typical of companies| | |with commodity type products, products reaching a mature phase in their life cycle, or where there is | | |consolidation or a shrinking market. This orientation typically will require additional time and development | | |cost to optimize product cost and the manufacturing process. | |Low Development Cost |This orientation focuses on minimizing development cost or developing products within a constrained budget. | |While this orientation is not as common as the other orientations, it occurs when companies are developing | | |products under contract for other parties, where a company has severely constrained financial resources, or | | |where a â€Å"stealth† development effort is being undertaken on a â€Å"shoestring†. This orientation is somewhat | | |compatible with time-to-market, but involves tradeoffs with product performance, innovation, cost and | | |reliability. |Product Performance, Technology & Innovation |This orientation focuses on having the highest level of product performance, the highest level of functionality | | |or functions and features, the latest technology or the highes t level of product innovation. This orientation | | |can be pursued by companies in many industries or many products except commodity products. Pursuit of this | | |strategy involves higher risks with newer technologies and accepts a trade-off of time and cost to pursue these | | |objectives. | |Quality, Reliability, Robustness |This orientation focuses on assuring high levels of product quality, reliability and robustness.This | | |orientation is typical of industries requiring high quality because of the significant costs to correct a | | |problem (e. g. , recalls in the automotive or food processing industries), the need for high levels of reliability| | |(e. g. , aerospace products), or where there are significant safety issues (e. g. , medical devices, | | |pharmaceuticals, commercial aircraft, nuclear plants, etc. ). This orientation requires added time and cost for | | |planning, testing, analysis and regulatory approvals. |Service, Responsiveness & Flexibility |This orientat ion focuses on providing a high level of service, being very responsive to customer requirements as| | |part of development, and maintaining flexibility to respond to new customers, new markets and new opportunities. | | |This orientation requires additional resources (and their related costs) to provide this service and | | |responsiveness. | 10. Evaluation and control 1. Determine what to measure: Top managers and operational managers must specify implementation process and results to be monitored and evaluated.The processes and results must be measurable in a reasonably objective and consistent manner. The focus should be on the most significant elements in a process – the ones that account for the highest proportion of exposure or the greatest no. of problems. 2. Establish standards of Performance: Standards used to measure performance are detailed expressions of strategic objectives. They are measures of acceptable performance results. Each standard can be usually includ es a tolerance range, which defines any acceptable deviations. Standards can be set not only for final output, but also for intermediate stages of production output. 3. Measure actual performance.Measurements must be made at predetermined times. 4. Compare actual performance with the standard – if the actual performance results are within the desired tolerance range, the measurement process stops here. 5. Take corrective action: If the actual results fall outside the desired tolerance range, action must be taken to correct the deviation. The action must not only correct the deviation but also prevent its recurrence. The following issues must be resolved: †¢ Is the deviation only a chance fluctuation? †¢ Are the processes being carried out in correctly? †¢ Are the processes appropriate for achieving the desired standards? Objectives of Strategy Evaluation and Control Organizations are most vulnerable when they are at the peak of their success †¢ Erroneous s trategic decisions can inflict severe penalties and can be exceedingly difficult, if not impossible, to reverse. †¢ Strategy evaluation is vital to an organization’s well-being; timely evaluations can alert management to problems or potential problems before a situation becomes critical. Appendix A Gross profit margin ratio The gross profit has increased from 23. 61% to 24. 53%. This means that profitability at the basic level has increased from previous year. This is a sign of good ratio. Operating profit margin Profitability before interest and tax has increased from 4. 00% to 7. 15%.This means that efficiency of the business before taking any financing has increased from the previous year. This also is a sign of good ratio. Net profit margin This also has increased from 2. 7% to 6. 76%. This means that overall profitability has also increased. This is a sign of good ratio. Current ratio Current ratio has decreased from 1. 38 to 1. 35. This means that working capital t o meet short term obligations has decreased, which shows a poor use of working capital. This is a sign of bad ratio. Quick ratio This ratio has also decreased from 1. 16 to 1. 13. So this shows that the ability to pay immediate financial obligations has also decreased. This quick ratio is acceptable but has decreased.Inventory turnover ratio The ratio has decreased from 9. 63 to 8. 93, which means that more capital is tied up in inventory which is not a good sign. Sales to receivables ratio It also has decreased from 8. 75 to 8. 43. This means that the efficiency in collecting accounts receivables has deceased. Return on assets This ratio has increased from 6. 9% to 13. 0% . This is the sign of good ratio. Debt to worth ratio This ratio has decreased to 6. 52% from 9. 12%. This means that debt financing has decreased and hence the risk also has decreased. Working capital . Working capital has increased from $11,874 to $12,414.This shows that the ability of a company to endure diffic ult financial periods has increased. |Gross profit margin |24. 53% |23. 61% | |Operating profit margin |7. 15% |4. 00% | |Net profit margin |6. 76% |2. 7% | |Current ratio |1. 35 |1. 38 | |Quick ratio |1. 13 |1. 6 | |Inventory turnover ratio |8. 93 |9. 63 | |Sales to receivables ratio |8. 43 |8. 75 | |Return on assets |13. 0% |6. 9% | |Debt to worth ratio |6. 52% |9. 12% | |Working capital |$12,414 |$11,874 | ———————– EFE

Managerial Economics Assignment - 952 Words

MS- 09: MANAGERIAL ECONOMICS ASSIGNMENT Course Code : MS- 09 Course Title : Managerial Economics Assignment Code : 9/TMA/SEM-II/2010 Coverage : All Blocks Attempt All the Questions. â€Å"A close relationship between management and economics has led to the development of managerial economics.† Explain this statement. BOOK NO 1 PAGE NO. 7 Managerial Economics consists of the use of economic modes of thought to analyse business situation Spencer and Siegelman have defined Managerial Economics as â€Å"the integration of economic theory with business practice for the purpose of facilitating decision-making and forward planning by management†. We may, therefore define Managerial Economics as the discipline which†¦show more content†¦So – how many units do we have to sell to drive marginal revenue down to the $0.25 marginal cost level? We can calculate that: Q where MR = MC is ($1.749995 – $0.25)/($0.00001) = $1.49995/$0.00001 = 149,995 units. Hey – that is more than production capacity! Therefore, the best we can do is full production of 140,000 units. Now we need to calculate the price, revenue, costs and profits associated with full production. Answering the questions At 140,000 units, with P = 1.75 – 0.000005 Q P = 1.75 – (0.000005 * 140,000) P = 1.75 – 0.70 P = $1.05 $1.05 Revenue is quantity times price or 140,000 * $1.05 = $147,000 Costs are $50,000 + $0.25 * 140,000 C = $50,000 + $35,000 C = $85,000 Profit = $147,000 – $85,000 = $62,000 3. Briefly describe the Optimal Combination of inputs with the help of an example. 4. Does Price Discrimination exist in the real world? Discuss with reference to any particular product or service. 5. Write short notes on the following :- a) Market Demand Schedule b) Peak Load Pricing c) Income Elasticity of Demand ----------------------- MS-09 Management Programme ASSIGNMENT SECOND SEMESTER 2010 MS-09: Managerial Economics [pic] School of Management Studies INDIRA GANDHI NATIONAL OPEN UNIVERSITY MAIDAN GARHI, NEW DELHI – 110Show MoreRelatedManagerial Economics Assignments3979 Words   |  16 Pages Appendix A: ASSIGNMENT COVER SHEET | | Date Received:........................................................... | | | Programme | Master of Business Administration | Module Name | Assignment: Managerial Economics | Surname | Amweenje | First Name/S | Edward Ludwig | Student Number | MBA1120419 | Date Submitted | 21 May 2012 | Postal Address | P.O. 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