This report assesses the opportunity offered to Carol's Cookies by the order for 20,000 boxes of Crunchies by a supermarket chain.
EXECUTIVE SUMMARY This report assesses the opportunity offered to Carol's Cookies by the order for 20,000 boxes of Crunchies by a supermarket chain. The report compares both the short term and long term by using two costing methods - relevant costing and full costing. Using relevant costing it has been shown that purely on a financial basis accepting the order in the short term will increase relevant cash flow by £105,000, even with the loss of revenue and production of 6,000 boxes of Boosters. This is due to having 60 tonnes of Material B in stock and the under utilisation of Labour Grade 1. However, the weight of the short term financial gain must outweigh any risks associated with the reduced production of Boosters. In the long term the full costing approach shows Crunchies being sold at a loss. A repeat order would improve both the OAR and the utilisation of the Labour Grade 1. However, we would recommend that prior to accepting a contract for repeat orders the board should assess both the qualitative and quantitative factors as described in this report. INTRODUCTION Carol's Cookies has been given the opportunity to supply a supermarket chain with 20,000 boxes of Crunchies, which could lead to future repeat business. Carol Snape, the Managing Director, who is keen to accept his order, has been advised by the Financial Account, Kevin Clark, that this would
Assess the validity of the following statement: "Economies of learning are nothing but economies of scale over time." Give an example of an industry in which there are strong economies of scale but only weak economies of learning.
Assess the validity of the following statement: "Economies of learning are nothing but economies of scale over time." Give an example of an industry in which there are strong economies of scale but only weak economies of learning. By definition, economy of scale is where average cost declines with increase in output. This could flow from indivisibles such as specialised machinery, fixed costs including R&D and advertising, the cube-square rule and inventories. Economy of learning is where decrease in average cost arises from accumulating experience and know-how. The graph below also helps to illustrate the difference between the two in showing how economies of learning is different from economies of scale: Cost per unit A B AC1 C AC2 output Economies of scale moves a firm from X to Y where increase in output, decreases the cost per unit. Learning economies shift the firm from X to Z given the same output. The firm moves to a new average cost curve. Overtime, a firm with high economies of scale might move further beyond Y along AC1. But it may not shift to AC2, so the economies can exist without each other and economies of scale over time may not be accompanied by economies of learning. Intuitively the statement is also invalid because, for instance, a very capital intensive industry might gain a great deal of economy of
Pest Report for M&S
.0 Terms of Reference In this report I am going to carry out a PEST analysis on a UK based business. The business I have to carry out the analysis on is Marks and Spencer. This report is due 10th March 2008. I will submit both a paper and electronic copy of my work. I have also included recommendations at the back of the assignment that I think Marks and Spencer could incorporate in to there business. I have used different procedures to carry out this PEST report on Marks and Spencer. Firstly I have used my own inside knowledge. As an employee of Marks and Spencer I have carried out extensive training about the organisation and the way it works. So some of the knowledge I gained from doing this I have included in the report. I have also gained some of my research from the Marks and Spencer website. (www.marksandspencer.com) from this site there is internal links to different parts of the website that contains useful information. These are listed in the bibliography at the back of the report. In a way you could also say I have visited the organisation by working there. I have also received information from the managers of Marks and Spencer. To help make some problems clear, I rung my boss and asked her to explain what these problems actually meant. (Books) 2.0 Findings Within 3.0 there is four different parts, listed 3.1, 3.2, 3.3 and 3.4. They are shown below. 3.1
Explain what is meant by the term "consumer surplus" and show how changes to individuals' consumer surplus, as a result of price changes can be derived from indifference curve analysis.
Economics Essay Explain what is meant by the term "consumer surplus" and show how changes to individuals' consumer surplus, as a result of price changes can be derived from indifference curve analysis. Economics can explain the reason why the rational economic man will consume varying levels of different commodities by applying supply and demand theory. When a consumer purchases a good, then utility is gained. The rational consumer weighs up the costs and benefits for each additional unit of a specific good purchased. Utility is therefore the key element when a consumer buys any good or service. When a consumer buys an additional unit of any good, his total utility will increase. However the increase in utility per each additional unit is not as high as the previous purchase. The consumer shall therefore continue to buy the good until there is no additional utility gained. This can otherwise be explained as the principle of diminishing marginal utility and at this point, marginal utility is equal to the price paid, we are therefore at the equilibrium where (MU=P). We therefore understand that consumer demand is a measure of willingness to pay and that consumers are often willing to pay an amount higher than market price for a commodity rather than do without it. However, for each successive unit consumed, the amount the consumer is willing to pay decreases. Following on
Polaroid - case study.
BACKDROP Polaroid is manufacturer of photographic equipment, accessories and related items used in instant photography. The organization was divided into two main divisions - The Consumer Photography Division and the Technical and Industrial Division with each of these divisions contributing around 40% of Polaroid's revenues of $ 1.3 billion in 1984. The company produced two main types of films: . The peel apart film which required the user to physically pull the film out of the camera and, 2. The integral film, which came out of the camera automatically. The integral films were manufactured in the R2 building at the Waltham Massachusetts site. The operations at R2 included production of sheet metal springs, pods, plastic cartridges and plastic end caps and then assembled these into film cartridges. R2 ran three shifts, five days a week, employing approximately 900 workers out of which 700 were part time. QUALITY AND PROCESS CONTROL PROCEDURES AT R2 All films were vetted by the Quality Control Department before being released into the market. The QC procedure included sampling of 15 finished cartridges (each containing 10 frames) out of every lot of 5000 cartridges. If the sampled cartridges contained defects in excess of allowable limits, the lot was held and further testing was done. Additional testing usually led to reworking, or rejection of a portion or all of
Outline the main characteristics of assembly industries, and for a consumer industry of your choice, analyse the locational and production trends of recent years
a) Outline the main characteristics of assembly industries An assembly industry is one that uses a group of machine parts that fit together to form a self-contained unit. For example car manufacturing is primarily concerned with the assembly of manufactured items to produce finished goods. It can be thought of as a system with interlinked inputs, outputs and processes. Assembly industries tend to be located closer to the market, because the distribution costs are higher than the collection costs, because the final product will have gained in size, weight and value compared to the size and value of each assembly item. Assembly industries are characterised by the complexity of its linkages. Firms and plants have links with thousands of component manufacturers, and with marketing, advertising and retailing industries. There are also often inter-plant linkages, with, for example in the car industry, engines being produced at one plant and gearboxes at another, with subsequent exchanges during the manufacturing process. Increasingly there are also inter-firm linkages, with manufacturers collaborating to share common components such as finished products, for instance, the Rover 400 and 600 series share many common components with certain Honda cars, and the VW and Ford 'people carrier' vehicles have identical body shells. b) For a consumer industry of your choice, analyse the
Explain why consumer protection is vital to maintain and promote a single market.
Suzanne K. Menzies. Outcome 4. Tutor: Michelle Semple. Contents. Part 1 - ..................................................................................................... 3 - * Explain why consumer protection is vital to maintain and promote a single market. Part 2 - ..................................................................................................... * Accurately identify the different national standards of consumer protection and trade and highlight why these differing standards can act as a barrier to the free movement of goods. Part 3 -........................................................................................................ * Accurately explain the following Directives which govern and promote a Single Market: * Misleading Advertising * Consumer Credit * Price Indication Conclusion.................................................................................................. Appendix Bibliography.............................................................................. Introduction. Whilst the European Union stands almost economically and socially stable, this has been a lengthy, complex progression. Achieved through key developments: such as the single market. Subsequently, these fundamentals have contributed to the structure and functions of Europe. Through EU law enforcement, minimum, common standards have
Introduction to Tesco.
Introduction to Tesco Tesco is Britain's leading food retailer employing 160 000 people in the U K throughout its 702 stores. Over the past five years Tesco has expanded from a traditional U K based supermarket into new countries, products and services including a major non food business, personal finance and internet shopping. Tesco has progressed into a truly international retailer employing a further 140 000 people throughout 214 stores in nine markets worldwide. The increasing scale and internationalization of Tescos sales and purchasing operations contributes to a significant increase in efficiency and profitability. In this assignment I will be examining Tesco's position in the economy, explaining the role of economies of scale within Tesco and drawing up a detailed swot analysis of the organisation. I will also be examining the role of production within the firm. Tescos position in the economy Tesco is a public limited company (plc). Public limited companies are businesses with share price on the stock exchange. To become a public limited company, a business must have an issued share capital of at least £50 000. The company must have reissued at least 25% of the nominal value of the shares. Tesco can raise significant sums of capital by selling shares to the general public. Shares are bought and sold on the stock market. Management of Tesco is in the hands of
Automobile Production and Ford.
Automobile Production and Ford Most people think of Henry Ford as the man who invented the automobile, but his influence on the American society and economy was far greater and will last for all time. Ford changed the face of the nation and set the stage for the entrepreneurs of today. He helped develop the infrastructure for automobiles, including roads and gas stations. He set a minimum wage for his workers. He shortened the workday and, most importantly, he created a successful assembly line for automobile mass production, eliminating the primitive hand-built process. He helped to create this nation's middle class and acted to allow the workingman to realize some dreams. Although Ford was an autocrat, he believed firmly in the "little guy." The automotive industry is one of great historical importance worldwide. On a global scale the combustible engine serves a number of purposes. Generating power from a combination of fuel, air and fire, the engine can power just about anything from the most powerful trucks to modest lawnmowers. The concept of the combustible engine has changed very minimally throughout history. The innovations have come in the forms of new materials, technological advances and processes by which these engines could run more efficiently. In today's automobiles the technical aspects are countless, the crank start ignitions of yesterday were
The Health Reimbursement Arrangement Alternative to the Rising Health Care Cost of Employers.
The Health Reimbursement Arrangement Alternative to the Rising Health Care Cost of Employers Donald E. Maier, II MGT 331 2 April 2004 Health benefit costs have been rising faster than inflation for the past four years (Logan, 2003). Employers' costs for their workers health benefits rose more than 10 percent per employee nationally during 2003, according to a report by Mercer Human Resource Consulting, as cited in Bizjournal.com (Durr, 2003), a total increase of more than 41 % since 1998. In real numbers, a 10 percent increase on a $2,000 monthly premium will, over four years, raise that premium to nearly $3,000. If the rate of increase is 20 percent, the monthly premiums will more than double. Faced with these increased health fees and a slow economy, businesses are finding different ways to meet these challenges. According to Mills (2003), today's employee benefit marketplace has made it increasingly more difficult for employers to get more for their employee benefit dollars than in years past. Many factors have contributed to the rising cost of employee benefits, none more than group health coverage. As the population and work force ages, the demand for medical services has also increased. New treatments and technology do not come cheap, as both employers and employees want access to the very best health care available. Advertising has pushed the demand for