1. Company Name

My hypothetical company name is Acme Widgets.

2. Introduction

Acme Widgets is a manufacturer of widgets, which are small, versatile devices that can be used for a variety of purposes. We produce a wide range of widgets, from simple to complex, and we sell them to businesses and consumers all over the world.

Vision Statement:

To be the world’s leading manufacturer of high-quality, innovative widgets.

Mission Statement:

To provide our customers with the best possible widgets and services, at a competitive price.

Objectives:

• To increase our market share by 10% in the next five years.
• To launch two new widget products each year.
• To reduce our production costs by 5% in the next year.

Business Model:

Acme Widgets is a B2B and B2C company. We sell our widgets to businesses that use them in their products or services, and we also sell them directly to consumers. Our main business activity is the manufacturing and sale of widgets.

Target Market:

Our target market is businesses and consumers who need or want widgets. Our widgets are used in a variety of industries, including manufacturing, construction, and retail. We also sell widgets to consumers for personal use.

Reasons for Selecting Such Kind of a Market:

We selected the widget market because it is a large and growing market. Widgets are used in a variety of industries and applications, and the demand for widgets is expected to continue to grow in the coming years.

Management Hierarchy:

The management hierarchy at Acme Widgets is as follows:

• CEO
• COO
• CFO
• VP of Sales
• VP of Marketing
• VP of Operations
• Director of Manufacturing
• Director of Engineering
• Plant Managers
• Production Supervisors
• Line Workers

3. Production Process

The production process for a single widget at Acme Widgets is as follows:

1. Raw materials are received and inspected.
2. The raw materials are cut to size and shaped.
3. The widgets are assembled.
4. The widgets are tested and inspected.
5. The widgets are packaged and shipped.

Inputs

The inputs for the widget production process include:

• Fixed inputs: Factory building, machinery, equipment, and land.
• Variable inputs: Raw materials, labor, and energy.

Cost Structure

The cost structure for the widget production process includes:

• Fixed costs: Costs that do not change with the level of production, such as factory rent and depreciation on machinery and equipment.
• Variable costs: Costs that change with the level of production, such as the cost of raw materials and labor.

Reasons for Incurring Such Kind of a Cost

Fixed costs are incurred because they are necessary to operate the business, regardless of the level of production. Variable costs are incurred because they are necessary to produce each widget.

Short-Run Production

In the short run, Acme Widgets can only change its variable inputs. Fixed inputs are constant in the short run. This means that Acme Widgets can only increase or decrease its production of widgets by changing the amount of raw materials and labor it uses.

4. Production Levels and Costs

The following table shows several production levels and the associated fixed and variable costs: