Running head: OPERATIONS DECISION ASSIGNMENT 1OPERATIONS DECISION ASSIGNMENT 2Assignment 2D. A. WrightOperations DecisionProf. Basil N IbegbulamStrayer UniversityMarch 12, 20141. Outline a plan that will assess the effectiveness of the market structure for the company's operations.In most cases, organizations engage with the primary aim of achieving better andimproved results from operations on a daily basis in many activities. The market is one place in which the organization can realize either success or failure depending on how it carries its activities (Slack & Lewis, 2003). The previously discussed regression identifies that the low-calorie microwavable food firm operates i ...view middle of the document...
Two vital factors that can lead to such a change include; withdrawal of a competitor and increase or decrease in price of products (Slack & Lewis, 2003). The above change will influence business operations in various ways. For instance, there will be increased output since the market share increases. The firm will then increase its cost of operations, with notable increases affecting elements such as labor and advertisement costs. The equation below shows variables constituting quantity demanded; QD = -5200 - (42×5) + (20×6) + (5.2×5500) + (0.20×10000) + (0.25×5000) = 2656.3. Analyze the major short-run and long-run production and cost functions for the low-calorie microwaveable food company. Suggest substantive ways in which the low-calorie food company may use this information in order to make decisions in both the short-run and the long-run.The above mentioned change may require the organization to upgrade its operations and embrace the use of modern technology in operations (Bragg, 2012). The change in modes of operation may then require lying off some workers in the process. The production function, in this case, will involve an analysis of main inputs in production against a number f outputs. With an increase in the market share, the firm focuses attention on increasing production inputs so that the outputs can be in required amount. Similarly, cost per unit of production is bound to increase with an increase in market served. The organization in turn maintains higher inventory hence increasing operation cost. The above situation, however, is offset by higher profit margins (Wheeler, 2009).Furthermore, the previous regression analysis identifies that the company cannot increase prices beyond certain levels as shown in the equation below:Own Price elasticity (ep) = - 42× = - 0.008 (approx.), and = 20, Px = 6, Q = 26560 Therefore, cross price elasticity (exy) = 20 × = 0.005.4. Determine the possible circumstances under which the company should discontinue operations. Suggest key actions that management should take in order to confront these circumstances. Provide a rationale for your response.This equations listed above, show that price increases will reduce demand and the company will eventually incur losses. The success and continued operation of the company depend upon whether the company makes profits or losses, with the latter leading to closure (Slack & Lewis, 2003). When competitors raise prices, the company has to keep track of such changes and adjust its prices in equal measures. However, this lowers demand for products, also reducing profits. On the other hand, competitors can also reduce prices to a level that the company ends up making losses in its sales since cost of production will exceed revenues realized. Management can play an active role in dealing with such situations. For instance, the management can put in place efficient market research personnel and always be in...
