Microeconomics
The most common way of deciding between these two options is through capital budgeting. If the two decisions are mutually exclusive, a net present value analysis will determine which of these options is better for the store in the long run. This type of analysis involves calculating the incremental cash flows that derive from the decision, and then discounting them back to the present day. The up front cash flows should also be included in the calculation. Between two mutually exclusive options, the one with the higher NPV -- as long as it is positive -- is the option that should be selected.
However, in the course of conducting such a calculation, it will become apparent that these two tactics solve different problems. The confusion probably lies in the fact that the root issue is the same. If increasing capacity is the solution (and both of these options increase capacity), then the store needs to determine which of the issues (the workers or the equipment) is the source of the backlog. This speaks to fundamental principles of production -- one can increase capacity by reducing workflow backlogs, but increasing capacity in other areas that are not subject to backlog is unlikely to achieve any real measure of success, because the backlog will still be a constraint on capacity.
Thus, if the machine is the problem, hiring too much labor without the capital upgrade will not result in a significant increase in capacity. The store will not be able to turn out fries and burgers any faster with double the staff working on the same equipment, and this must be taken into consideration when calculating the incremental cash flows. The additional capital will increase the capacity of the store's equipment, and once that occurs it be found that the current staff size is insufficient to use this equipment to its maximum capacity. At this point, the company can hire new staff, knowing that this will result...
Microeconomics The class Principles Microeconomics. text book Principles Microeconomics N. Gregory Mankiw. paper answer questions. Final Project Following a description final project ECO-112. The project parts, answered complete project. Principles of microeconomics: Products used in daily life Product 1: A Starbucks latte Product description and usage The Starbucks latte is a coffee beverage made with espresso and steamed milk. On the company website it is described as "the original coffeehouse classic. And like most classics,
Microeconomics The ServiceMaster Company is concerned with the provision of a wide range of services to not only residential but commercial customers as well. Mainly, its services include but are not limited to facility management services, commercial cleaning as well as restoration services. In this text, I describe the type of market ServiceMaster operates in as well as the competition the company faces; if any. I also make submissions on how
Microeconomics Service Master Pro-is a Company that concerns itself with the provision of a wide variety of services to both firms and residences. The company's flagship brands include but are not limited to TruGreen, AmeriSpec as well as Terminix. International operations Currently, Service Master has operations in 14 countries through its vast network of more than 4000 locations. Through its convenient franchise arrangements, the company has continued to expand throughout the world within
Microeconomics Internet service providers in the country are faced with some serious challenges when it comes to microeconomic distribution of resources. They have to consistently provide value-added services in order to be able to gain more customers and retain the existing ones. There are some trade-offs involved when it comes to how big an area the service should cover, who the service should be given to and how to expand or
Microeconomics: Differentiating Between Market Structures in an Organization Microeconomics Electronics Industry The electronics industry has become one of the largest and fastest growing industries which generate billions of dollars every year. The major products of this industry include personal computers, laptops, mobile phones, televisions, digital cameras, music players, telephones, speakers, recording media, and all types of accessories for these products. The operations, performance, and profitability of the participants of electronics industry is affected
Microeconomics Final Project: Product Analysis This text will largely concern itself with two products most of us use in our daily lives. Amongst other things, the text will in addition to describing the products also highlight the various factors that influence the demand and supply of the said products. Further, the products' available substitutes as well as complements will be identified. Later on, the long-term prospects of both products will be
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