Production and Costs

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Course Description
This course provides a solid foundation of economic principles to support managerial decision making. Topics include cost-benefit analysis, demand estimation and forecasting, decision making under risk and uncertainty, production and cost analysis, and market structure analysis.
Case Background:
All businesses need to make decisions about how much to spend on equipment, how many people to hire, etc. as well as decide how much to produce. In making these decisions, managers must take into account some fundamental principles of economics. For example, when deciding whether or not to produce one more unit, it is not necessarily the total production cost that you need to consider. Instead, the concept of marginal analysis is employed. This entails looking at how much it costs to produce one more unit – or the marginal cost. Other important concepts of this module include fixed costs, variable costs, and the law of diminishing marginal returns.

 

 

Significance of the Course within the Program
This course will either implicitly or explicitly address the following program outcomes:
• Identify and apply appropriate quantitative and qualitative business models to evaluate business performance and solve complex organizational problems.
• Generate business plans at the corporate, business unit, and functional levels.
• Conduct business research by finding, collecting, analyzing, and evaluating business data.
• Evaluate information consisting of multiple perspectives, conflicting evidence, competing interests and priorities, and risk, to determine an optimal course of action.
• Generate oral/written presentations in various business formats (e.g., memos, reports, PowerPoint, spreadsheets, charts/graphs).
• Apply a system’s perspective to improve, integrate, and align business functions with organizational strategy.
• Demonstrate ethical and reasoned decision making and action in all facets of organizational management.
Course Overview
BUS530 is designed to expose students to the main issues in managerial economics. Managers in the business world need to make vital decisions, such as what price to charge, how much to produce, how many employees to hire, etc., that can make or break the company. Optimizing these decisions is complex, because this may depend not only on the internal nature of the firm, but also the nature of the market and competitors. We will learn specific decision-making tools such as marginal analysis and game theory, and also cover in detail the different types of industrial structures and their implications for firm strategy.
This course begins explaining the classical demand and supply model of price determination and the associated concept of price elasticity of demand, which plays an important role in the decision-making process of firms (Module 2: Production and Costs)
Modular Learning Outcomes
Case
• Understand and apply the distinction between fixed and variable costs.
• Understand and apply marginal analysis to production decisions.
• Graph economic data using Microsoft Excel.
Required Material

Sample Solution

Quantitative research is all about numbers. It uses mathematical analysis and data to shed light on important statistics about your business and market. This type of data, found via tactics such as multiple-choice questionnaires, can help you gauge interest in your company and its offerings.Most importantly, because quantitative research is mathematically based, it’s statistically valid. This means you can use its findings to make predictions about where your business is headed.Qualitative research isn’t so much about numbers as it is about people – and their opinions about your business.

If managers want to grow employees and to do something, they can follow the power tactics. Power is related with expert and motivational. Power can inspire in an organization both positively and negatively. In TCC the managers apply power to develop flexible working plan so that employees get motivated and work according to their ease. The management has the power to run the organization according to the company’s objectives. To create a good connection with the employees, managers can positively activity their power. It supports to return the company’s output and revenue. In an organization, different types of power present such as: legitimate power, reward power, expert power, coercive power, and referent power (Markoulli, 2017). All of these powers can be used for an organization not only for favor but also for bad will. Task 2: P2. An evaluation of how content and process theories of motivation and motivational techniques enable effective achievement of goals in an organizational context. An organization achieve their specific target by proper motivation. In business sector 3 types’ motivation present such as content theory, process theory and reinforcement theory (Gladwell, 2017). Content Theories: Content theory describes the positive issues of motivation. It is important on what motivates the individuals. It explains the clarifications of impulses of human needs as well as time and many psychologists strived to describe these needs. There are some theories include in content theory such as Maslow’s hierarchy of needs, McGregor’s Theory X and Y, ERG theory, Herzberg’s Motivational theory, and McClelland’s theory of needs. The main advantages of content theory that it can make employees be positive. Here motivator motivates each employee individually that’s why employee do their work very easily and correctly. For this theory, employees are fulfilled their basic needs (Hall, 2017).

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