Economics †Puerto Rico Essay

In this paper will identify, draw in and production marchesss of the Company San Juan carrell telephone sets comp ars. In delve, the potential risks atomic number 18 identified in making management decisions. In addition, will crumple and assess what are the best ways to prevent negative consequences for the confederacy. The terminus constitute refers to the amount or representing a product or value according to investment in material, labor training and time that you desire to develop it. As you can see, the term is characteristic and central to economic science as it is the point at which any part of trade or economic relationship between two parties. The cost is to be paid by those who want to receive a product or serve up to dumbfound it in his possession or under his control. Today, the cost of a product or service is expressed in most situations in terms of money or capital (which may itself vary notes according to the region or area in which the exchange con curs place). However, in antiquity and abundant, humanity carried on their trade and economic exchanges through the speech of other items such as spices. The cost of the products is then leave behindd to the equivalent cost for a given quantity of spice. economic CostsAccording to McConnell & Brue (2008), Economic be include altogether payments that must be received by resource owners to ensure a continued supply of needed resources to a particular withdraw of production. Economic be include explicit costs, which tend to resources owned and supplied by others, and tacit costs, which are payments for the use of self-owned and self-employed resources. wiz implicit cost is a normal loot to the entrepreneur. Economic profit occurs when total revenue exceeds total cost (= explicit costs + implicit costs, including a normal profit).Differentiate between short-run costs and long run depending on use of whether variant or restore fecund factors. In Short-run costs have fixed an d variable inputs. Therefore, variable and fixed costs will be. Within the short-run costs are Total Cost is the grocery store value of tout ensemble inputs used to build up a product. It has 2 components fixed and variable costs (1) is determined and still value that is independent of production wad, are those costs always experience e.g. rent, electricity, etc. (2)A Variable cost is a cost that is incurred depending on the volume of production, human cost (work) and commodities. (3) The b dedicateline cost is the change undergo by the total cost when an additional building block increases production. Grows in distinguish to the marginal productivity sense, if it grows, the marginal cost decreases. In Long-run costs there are only variable costs. In the long run, firms have no fixed costs are all variables that the factors of production are thus the total cost, which is equal to the variable costs. The curves in the long-run costs, they theorize to each output, with the lowest cost that can be obtained, assuming all inputs vary.The curve means short-run costs will be burn to the long-run average costs. The total long-run cost is equal to all the variable costs of the dedicate. Some of the reasons why the average total cost curve to be increasing, stable or declining (1) the means and long-run marginal costs, like a u because it produces income production. (2) When yields are constant output grows proportionate / the increase factor, and average costs are constant. (3) When yields are rising, the long-term costs decrease. (4) When yields decrease long-term costs are rising. (5) Normally the association began taking increasing returns but as the situation is complicated diminishing appear. boilers suit yields are mixed.San Juan carrel Phone ScenarioThis scenario presented the actual dilemma of company San Juan Cell Phone in Puerto Rico. In this scenario the production manager need to lose it the potential risks, consequences positive or neg ative and possible closures of accepting the order of 100,000 units of cell phone of the company Big Box and accept or reject the external production of the cell by outsourcing, an external company called Original Equipment Manufacturer. In order to make a testimonial on what would be the best alternative for this scenario and to provide a solution that does not affect the company, analytic thinking and recommendations will be divided into phases. In the first phase will analyze the unit profitability overlay of San Juan Cell Phones, which is found in Table 1 in the statistical appendix of this document. This table shows that the company San Juan Cell Phones has a cost per unit for the Alpha model for $ 20, of which the variable costs per unit are $8, fixed overheads per unit are $ 9 and a profit per unit of $ 3.The company Big Box will not pay more than $ 15 per cell phone which implies a loss of $ 5 dollars per unit impairment for San Juan Cell Phone. If we analyze the loss f rom the perspective of the total cost of production, San Juan Cell Phones would have a total loss of production of $200,000, even without adding that there was no profit from this production. This loss would lead to other serious problems to company profitability, which will be difficult to replenish in the short term because the residuum price in the commercialize is $15. Therefore can government note an excess supply. San Juan Cell Phones must make a comprehensive analysis of their variable and fixed costs and trying to lower them to compete with the market price and maintain profitability.On the other hand, evaluating the offer that provides OEM to San Juan Cell Phones, where the price of production per unit is $14 we can see that San Juan Cell Phones could hit in the production requested by Big Box and in turn obtain a profit of $100,000. This in turn allowing you to San Juan Cell Phone keeps the market equilibrium price of $ 15. Where the company can lower the catamenia p rice per unit and maintain its excess demand in the market and maintain profitability. As part of this analysis shows that the grant to the outsourcing manufacturing, with the penalty would take to keep all their employees working and running the factory capacity. And therefore their bonus, which is establish on the overall profitability of the company, is affected.Recommendations of best alternative solutionIn the second phase of this analysis will make the recommendations to follow to match the expectations required by fuddle Box, without loss of profitability, and to meet the value set up by the company. Below the suggested recommendations (1) Is to secure the order of 100,000 phones required by Bib Box. (2) get to agreements with OEM outsourcing. In this agreement the Alpha prototype model and the grapheme of the prototype will be established, also limit the time of lecture and the amount of production issettled. In turn, the price of $ 14 per unit, which is not negotiable , is settled. (3) Establish a plan for reengineering the organization structure, technology and the human factor in the production line of Alpha models as initial phase of the process.At a later stage the reengineering organization to another production line would be extended. Observe the appendix A Guide for Strategic cookery and Organizational Reengineering. These recommendations are aimed to the San Juan Cell Phones company, can get the desired order to maintain profitability. In addition to be able to maintain its equilibrium price in the market, you can keep your excess demand, increase their volume of production and profits. In addition meet its corporate values to provide its customers with high quality and exceed the expectations of them.ConclusionIn the scenario presented the administrative proletariat being viewed uncertain and challenging, as a number without variables, change and interlingual rendition is affecting it. Its time for San Juan Cell Phones, perform an ana lysis of their strengths and limitations of your environs and make a formulation of strategic alternatives. This analysis will take the company to be more efficient and effective in clashing the needs of its consumers, taking into consideration an adaptability, a proactive character and tractableness to embrace change, in turn have a better interaction with new technologies and positive changes in the values of corporate society attitude. personaMcConnell, C. R. & Brue, S. L. (2008). Economics Principles, problems, and policies (17th ed.). Boston, MA McGraw pile/Irwin.Pugel, T. A. (2007). International economics (13th ed.). Boston, MA McGraw Hill/Irwin. University of Phoenix. (2014). Student Resources. Retrieve from https//newclassroom3.phoenix.edu/Classroom//contextid/OSIRIS46311129/context/co/view/ actDetails/activity/d547f818-bc95-4e40-b161-61f94462bdb7/expanded/False Statistical Appendix