Archive for October, 2016

October 28, 2016

 

 

 

 

 

 

 

 

International Business

 

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Introduction

Increasing internationalization and globalization has become of great significance recently.  The number of organizations operating internationally is increasing constantly and more and more organizations are focusing on overseas to grow their businesses, as the globe becomes more and more unified.  According to Keillor, (2013), the world continues to open up for foreign companies, and new business destinations are increasing.  The global economy has created business environments, which require organizations to look beyond the traditional view of the home-market, and instead, begin looking at businesses from a global perspective.  Due to high competition, organizations operating abroad face a much bigger task than before.  When going global, the challenges an organization must handle are unfamiliar and new.

Culture is among these obstacles, which affect the operation of a business in a global context. Cultural changes occur very slowly, and their effects endure for many years.  Even with the technological advancement in communication and travel, cultural behaviors within societies have remained practically unchanged. The fixed nature of culture is usually a mechanism in which a society can protect its principles, and guard against external influences.  Thus, international businesses have to deal with diverse cultures in different nations; and companies operating in many countries, must understand, learn and use these cultural divergences in their strategic action planning (Neelankavil, 2015, p. 39).  As such organizations act commercially in different countries, they should be obligated to adapt to the laws, habits, policies, and the preferences of these nations, as a way to become more successful in a different context.  Amongst the biggest obstacles faced by organizations, which operate in the global market is the cultural divergence.  The aim of this research paper is to examine the cultural environment facing international businesses.

Discussion

In a multicultural society, such as the United States, businesses succeed by finding general grounds across ethnic and cultural groups.  However, in homogeneous cultures such as Asian or European countries, businesses have continued to maintain their local value systems.  The Americans constantly change things – their homes, images, services, products and how they do things.  To them, change is significant; change is improvement. However, the Asian and European cultures do not easily discard their proud and long histories.  They believe that an established manner of doing things is a virtue, not a weakness.  In the field of international business, we have been seeing the emergence of multicultural deals that could correctly be called global.  This shows that countries are more closed to one another, and they are needed to create a synergistic strategy to incorporate the needs of the nations.

Cross-cultural management researchers have recognized that cultural differences across nations can have significant implications for managers. There are various models that study the role of culture within international organizations.  Of these models, the most common model is Hofstede’s (1980) who continues to enjoy the most popularity in the cross-cultural management sphere.  This is because the model was the very first to concentrate on management and provide statistical indicators for different countries, facilitating its application in empirical study of cultural influences on management behaviors.  For instance, some authors have focused on the cultural variations among countries and recognize that the level of difference is expected to have a great impact on an international business.  Other scholars who reviewed 180 studies suggested that cultural values are associated with conflict managements, change management, leadership, Human Resource Management, work-related attitudes, reward allocation, personality, and individual behavior (Feldman, Santangelo, & European International Business Association, 2008, p. 44).

Cross-cultural management is clearly significant and has a high influence on the success of global business operations.  It has been reported that global business management is indivisible from the field of patterned cultural behaviors since culture is characterized in terms of the shared and pervasive beliefs, values, norms and symbols, which guide the daily lives of diverse groups of people.  The traditional strategies applied by management to control culturally diverse workers have proved inadequate and might be unable to solve the challenge of cross-cultural diversity through the era of globalization.

The demographic movements, technological innovations, economic and political forces have revolutionized over time, and continue to transform human behavior.  In conducting business globally, cultural barriers tend to increase and present new opportunities, and challenges as well.  In today’s increasingly demanding and competitive global free market economy, managers cannot succeed exclusively on their domestic cultural skills only.  The cultural environments of international businesses focus on how cultural diversities across regions and nations can influence the manner in which international and national business are transacted.  For instance, what it is about a certain culture that either inhibits or facilitates trade, entrepreneurship, and success in international markets; or how culture influences the way in which businesses are organized, manage their workforce, and approach strategic decisions.

Defining Culture

Culture has been defined as the beliefs, knowledge, morals, customs, art and other capabilities of a particular group distinguishing it from others.  This means that culture is the means of a society’s life.  From a practical viewpoint, cultural elements comprises of symbols, behaviors, skills, knowledge, language, motives, traditional ideas, and achievements, which are perpetuated and learned through a society’s establishments to improve its survival opportunities Neelankavil, 2015, p. 39).  It has also been defined as the acquired awareness that individuals use to generate social behavior and interpret experiences.  Since culture entails so many elements, businesses find it very challenging to wholly understand its effects on a society.  Learning new culture means more than mastering some hidden languages of the host country.   It also signifies learning to bridge any differences between cultures in order to create successful relationships.

While culture works on the unconscious level, its effects are subtle.  For instance, one has to be conscious when dealing with German managers that they are cautious about titles and are quite formal in their business talks.   The French are always proud of their language and culture, and for that reason, they are sensitive to matters affecting the cultural environment, particularly in business transactions.  In fact, as cultures appear to be more collective in nature, international organizations sometimes have to manage more than one culture within a single nation.  For instance, various parts of China comprises of multiple cultures that have contrasting cultural differences.  Therefore, diverse layers of culture tend to exist at the regional, national, gender, societal and social class levels.  At the regional level, it has been indicated that cultural settings create limitations and opportunities for people differ from country to country in the same region.  At the country level, studies have shown that cultural principles have important effects on a nation’s economic development, levels of corruption and regulatory policies.  Similarly, at the level of corporate, research findings reveal that culture not only affects the strategic level, but also the management area and its market orientation.

Culture shock – when one enters another culture, he or she will most likely experience culture shock.  This is a normal reaction toward all the differences of a different culture.  A person who experiences culture shock will have a series of reactions starting with excitement, followed by aggravation, then adjustment, and eventually, acceptance.  Thus, it is crucial to do a proper homework in order to understand the culture of an alien country before deciding to do business in that country.

Culture and International Business

The significance of culture to global business cannot be overemphasized.  Whether dealing with matters pertaining to managing, marketing or negotiating business transactions, the achievement or failure of an organization abroad widely depends on how efficiently its workforce can exercise their abilities and skills in a new setting.  That ability depends on their job-related skills, as well as the employee’s responsiveness and sensitivity to the new cultural background.  One of the most known factors that contribute to failure in international businesses is the wrong assumption that if one is successful in home business, then he or she would be equally successful in employing technical knowledge in a diverse culture.  Studies have established that failures in international business environment mostly results from a lack of ability to adapt and understand foreign ways of acting and thinking, rather than from professional or technical incompetence (Ferraro, 2002, p. 17).

Cultural differences are key ingredients in the ‘liability of foreignness,’ a set of challenges that tends to interfere with businesses’ success abroad.  The effects of culture at the company level range from formulation of strategy, to organizational designs.  Culture does not only influence how strategic moves can be presented, but it can impact the decisions themselves, as well.  Organizational behavior processes such as motivation, perception, leadership, human resource management, and communication, are all impacted by culture, as are decision making processes, negotiations and management styles.  Culture plays a vital role in international mergers and alliances, though it has also been found to correlate with entrepreneurial behavior and corruption.

As observed by Huntington, the role of culture cannot be reduced in the international era.  He explains that in this new world, the most important, pervasive and dangerous conflicts are not between the rich and poor, social classes, or other economically-defined groups (Shenkar, Luo, & Chi, 2014, p. 190).  Instead they are between people who belong to diverse cultural entities.  Huntington further observes that culture is both a unifying, as well as, a divisive force.  It is a force that unifies members, though it is also a source of friction among members.  Culture can be a source of inner friction, where stringent adherents tend to struggle with others perceived as straying from or betraying the cultural heritage.

Elements of culture that apply to international business

Some of the vital elements, which help in understanding culture, are norms, values, language, education and religion.

Values

These are ideas that people believe and cherish to be essential.  They are the primary convictions that individuals and groups hold on to concerning what is good or bad, wrong or right.  Values are regarded as the basis of any culture, because it is on these values that the structures of customs, norms, education, and others, are justified and developed.  They tend to differ from culture to culture, usually creating major differences amongst cultures.  In Japanese culture, significance is given to values like honesty and loyalty, and also, to group membership.  For businesses operating in this country, observing these results in greater cooperation employees, highly industrious, and deeply devoted employees.  Some of the fundamental values include leadership, technology, religion, time, and individualism versus collectivism.

Individualism and collectivism

Individualism is the faith in the individual and in his or her ability to function rather independently.  Independence, self-reliance, as well as freedom are closely connected to individualism in the U.S.  However, in many other cultures, individualism is viewed as undesirable.  Most people do not support the negative aspects of selfishness and self-centeredness.  Rather, they prefer collectivism, which is the belief that a group is more vital than the individual.  The Japanese, for example, has a powerful collective orientation.  They rarely make decisions without group agreement or getting consensus (Shenkar, Luo & Chi, 2014).  To them, group harmony is more significant than individual gain.  In contrast, American business-persons tend to operate individually, and often make decisions without having to consult fellow staff.  Individual gain is more significant to them than group harmony.

For international organizations, the individualism-collectivism aspect is a very crucial concern in the management of international operations.  Businesses entering individualistic societies must be aware that individual initiatives should be encouraged, and that individual decision-making is the norm in such countries.  Employees in such countries have a preference for individual rather than group-based reward practices.  Those getting into collectivistic societies should understand that groups are given more value in such countries, and hence, they should be ready to abide by such values.  These entail decision making processes, which should be group-based.  In addition, group performance should be given priority and the organizational structures should reflect a ‘family orientation’.

Leadership and power

Different cultures have diverse values relating to power, leadership and authority.  These are shared amongst a number of different institutions and people in democratic societies.  For instance, in the U.S., the power to rule is divided amongst the executive, judicial and legislative branches of the government.  This means that no group or individual has too much authority. In authoritarian societies, power, authority and leadership are granted to some few people.  In China, for example, the leadership authority and power are given to a few leaders, who govern without queries.

Religion

Religion is an essential element of culture because it influences the beliefs, lifestyles, attitudes, and values of the people. The knowledge of religion is quite significant for a company involved in international business; since it can help the companies understand what type of services or products the locals like. According to Cherunilam, (2010), religious beliefs regulate the conducts of members of different cultural groups, which include business organizations. Such beliefs affect how businesses and people perceive the world.  Some countries and societies are dominated by a distinct religion.  For instance, in the case of Iran, Islam strongly influences the nation.  Every person and business there is subjected to Islamic practices.  Some other countries like in Africa have several major religions, and business people in such countries are expected to respect the values of the various religious practices.  In India, many business decisions are based on astrological advice, which include the decision about the timings of a business launch, name of the firm, location of the company, and brand name.  In other states, such as the UK, religion is not a key social force. According to Dlabay & Scott, (2010), the connection between business and religion is controversial.  They have observed that various religions both discourage and encourage business activities within a country.

Language

There is a strong agreement that among the key elements of culture, language is possibly the most significant key to generally understand culture, and the specific beliefs, values, opinions and attitudes of a certain individual or group.  All cultures and subcultures must use language to communicate to one another and with other societies.  Language helps in international business transactions; thus, without it, conducting business would be complex (Misra, 2010).  Though many languages can be used for business purposes, English is widely regarded as the language of global business. It is widely accepted as being the language of business, with many international businesses adopting it as their formal language.

As a language of doing business, English has several advantages over other languages; and contains many words, which are drawn from different languages.  In addition, English can be precise and concise, and ideas can be communicated in different ways.  Language instills essential socialization themes, and establishes how norms and values are communicated and expressed. For many companies, such as Toyota, IBM Japan and NEC, the ability to speak English is a condition for promotion. However, it cannot be assumed that speaking similar language can remove cultural differences – it just hides them.  Furthermore, relying on English can weaken people’s ability to adapt to other cultures.  From the viewpoint of global business, it is crucial to have some understanding of the local language.  This helps in understanding one another better, and developing direct rapport with the local population.  The lack of understanding the local language can cost a company dearly. Just as culture is known to be both a dividing and unifying force, so is language.

Norms

These are the societal guidelines and rules that prescribe the suitable behavior for different situations.  Certain norms, called mores are considered to be very important for the smooth functioning and existence of the society.  Violating such norms is regarded as a serious offence and could invite trouble for violators. For instance, in the U.S., business people can hold business discussion with their stakeholders, on a bash where alcohol could be freely served.  However, in a country like Saudi Arabia, doing this could result in punishment for violating a vital norm of the country’s society, which forbids consumption of alcohol.  In many Arab nations, it is regarded as being against the norms to try to shake hands with an individual of a higher authority, unless he or she makes the first gesture.  Foreign nations who violate this are considered to be haughty or rude, and many times, this has caused negative consequences on an organization’s operations involved international business.

Communication

The chances of individuals facing difficulties in understanding one another are quite high especially, when dealing with people from different cultural backgrounds.  In some cultures, for instance, in China, Japan and Saudi Arabia, great emphasis is given to interpersonal relations.  Great care need to be taken, concerning communication, since any sort of misunderstanding can result in end of a negotiation.

Summary and Conclusion

The world economy is experiencing globalization.  For the past few decades, countries have been opening their doors and welcoming alien corporate and multinational organizations from developed countries, as well as emerging economies.  Besides management techniques and skills, these organizations should be culturally sensitive towards the countries they are getting into, in order for them to gain acceptance and build their brands in such countries.  Culture influences just about each aspect of a business, which includes the goals and values of the company, its products, and the ways its workforce communicate with one another. It encompasses all elements of communications, religion, norms, languages, behaviors and values.

Culture symbolizes the manner in which people lead their lives.  For businesses in the international arena, engaging with and understanding consumers, and business partners in diverse cultures is becoming central to business success.  In order to become successful in an international business, individuals and businesses should learn to adjust to cultural differences.  This means that they must become accustomed to different cultural values.  An individual or a business must be willing to adjust to and accommodate other cultures because this is key to succeeding in the international economy. These changes will assist in minimizing the variations that separate cultural groups.

Besides particular organizational cultures, national cultural differences are of concern in the international business.  Different countries have different perception of values, such as, teamwork, different attitudes to procedures and regulations, and perception of time dimensions.  Considering these differences enables people to elucidate the basis of communication, collaboration or management problems, and to decide on the next course of action.  Cultural differences can be aggravating for businesses or organizations.  Non-observance or ignorance of other country’s culture may cause unintentional offence to foreign customers, or social blunders.  Thus, profound understanding of practices and customs, functional in international business is highly important.  Having knowledge for different cultures tends to equip companies to design and fashion their services and products according to the consumers’ needs.

 

 

 

References

Cherunilam, F. (2010). International business: Text and cases. New Delhi: PHI Learning Private Limited.

Dlabay, L. & Scott, J.C. (2010). International Business. CengageBrain

Ferraro, G.P. (2002).  The cultural dimension of international business. The University of North Carolina. Available from: http://www.petronet.ir/documents/10180/2323250/the_cultural_dimension_of_international_business

Feldman, M. P., Santangelo, G. D., & European International Business Association. (2008). New perspectives in international business research. Bingley, UK: JAI Press.

Keillor, B. D. (2013). Understanding the global market: Navigating the international business environment. Santa Barbara, Calif: Praeger.

Morrison, J.  (2008). International Business: Challenges in a Changing World. Palgrave Macmillan

Misra, S. (2010). International business: Text and cases. S.l.: Prentice-Hall Of India.

Neelankavil (2015). Basics of International Business. M.E. Sharpe

Shenkar, O. Luo, Y. & Chi, T.  (2014). International Business. Routledge

 

 

 

 

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October 28, 2016

 

 

Supply and Demand

 

 

 

 

 

 

 

By

 

 

 

 

 

 

 

 

 

 

 

 

Instructor

Course

Code

Institution

Date of Submission


Introduction and Over View of the Study

In economics, demand refers to the consumer’s desire, their ability and their willingness to incur a price in order to have a product or a service(Azar, 2014). On the hand, supply refer to the amount of product or service units that a firm is able to produce and offer to a particular market for consumption(Kotler, Burton, Deans, Brown, & Armstrong, 2015).  A market is where the exchange of the goods and services take place between consumers and the suppliers(Gwartney, Stroup, Sobel, & Macpherson, 2015). The two are some of the greatest forces that influence the situations in a market.

This study therefore seek to evaluate several market scenarios and use graphs to illustrate the expected situations in relation to all factors that are important basing model of supply and demand. Each scenario is discussed separately from others and the normal assumptions of the laws of supply and demand in a market are used together with their determinants. In this study, the scenarios are made basing on 240- Foot Industrial Wind Turbines.


 

Part One

Using model of supply and demand to analyse various market scenarios

Scenario 1

“A technological advance reduces the cost of production for industrial wind turbines”

Through technological advances, the cost of producing industrial wind turbines reduces hence the producer firms are able to increase the number of units they can supply in to the market. The law of supply and demand suggests that, when the supply increase, prices drop and when prices drop, the demand increase(Baumol & Blinder, 2015). Therefore, the expected curve for demand and supply with prices dropping is as illustrated below;

 

 

 

 

 

 

 

 

Scenario 2

“The number of consumers of industrial wind turbines increases, because more firms in private industry are buying wind turbines to generate power for themselves; in addition, a larger number of public utility companies are buying wind turbines as a greener source of electrical power.”

Increase in number of consumers illustrates and increase in demand for the wind turbines. According to the laws of supply and demand, when demand increase in a normal market, the prices increase. This can be illustrated by a graph as below;

 

 

 

 

 

Scenario 3

“Suppose natural gas is a form of energy as a consumer substitute for industrial wind turbines as a source of power (as compared to industrial wind turbines). What change is predicted in industrial wind turbines if the price of natural gas energy decreases?”

In a situation where the consumers have an alternative substitute product, like in this case where natural gas can be used to substitute wind turbines, a decrease in the cost or supply prices of an alternative product causes a drop in the demand for the other product. In this case, the drop in natural gas energy prices will result into a drop in the demand for wind turbines.

 

Price

 

                                 Scenario 4

“Suppose a government subsidy that had been available to the producers of wind turbines is completely eliminated, and the cost of producing wind turbines rises, as the government subsidy is taken away. Predict the change in the wind turbine market caused by the removal of the subsidy.”

The subsidy causes the cost of production of the wind turbines to drop. Eliminating the subsidy causes the cost of production of the wind turbines to increase. Increase in the price of production increases the price of selling the products in the market.In a normal market situation, increase in prices of commodities causes a decrease in its demand.

 

 

Price

 

                                

                                

                                 Scenario 5

“Assume steel is a resource used in the production of industrial wind turbines. If global steel prices decrease dramatically, predict the impact. Does the supply or the demand for industrial wind turbines change? Why? What is the direction of change? Why?

A decrease in steel prices will directly reduce the cost of producing wind turbines. This will increase the ability of the wind turbines producers to supply more units of the products to the market. According to the laws of supply and demand, an increase in supply causes a decrease in prices which in return increases the demand for the products in the market. The curve of demand and supply will be illustrated as below;

 

Price

 

 

                                 Scenario 6

“Suppose the entrepreneurs who make and sell industrial wind turbines have the technological capacity to readily changeover their production operations to produce smaller residential wind turbines. If the price and profitabilityof producing residential wind turbines increase, what is the impact on industrial wind turbines?”

The ability of the entrepreneurs to produce residential wind turbines increases their demand for the products. However, according to the laws of supply and demand, in a normal market, an increase in the prices of the wind turbines will cause a decrease in the demand for the products in the market. This can be illustrated as below;

 

 

 

Price

 

 

 

 

Units

Part Two

Using the model of Supply and Demand to make predictions on changes in the equilibrium price and the equilibrium quantity of corn

                                 Scenario 1

“Suppose above-normal growing conditions (near-perfect weather, ideal soil moisture, no pest infestations, etc.) create a bumper crop of corn. Use supply-and-demand to predict the impact of the bumper crop on the equilibrium price and equilibrium quantity of corn.”

A bumper crop is a crop that yields very high levels of harvest than the expected volumes. Such a case causes a high supply which in return causes prices to drop. According to laws of supply and demand, the drop in prices causes the demand for the products to increase as consumers can afford to buy products.

Price

 

(EP)

                                

                                               (EQ)    Units Sold

In the case above, more suppliers enter the market due to high demand. The intersection between the demand and the supply curves is the equilibrium. The actual change between the normal and above normal growing conditions involves increased supply which in return increases the demand for the corn due to lowered prices. The predicted model results are similar to that of other commodities. This is the case because the corn operates in a market environment that is affected by other factors such as competition, ability of customers to buy and the willingness to buy products.

Scenario 2

“Suppose corn is a viewed as a normal good from the consumer household income perspective. If a worldwide recession reduces household consumer incomes on global scale, use supply-and-demand to predict the impact of decreased consumer income on the equilibrium price and equilibrium quantity of corn.”

A worldwide recession that reduces the household consumer’s incomes reduce the ability of consumers to pay for the corn. This therefore reduces the demand for the products in the market. A decrease in demand leads to a decrease in supply. This will cause the equilibrium price and the equilibrium quantity of the corn to decrease.

Price

 

(EP)

Units Sold(EQ)

Supposing the corn market is impacted by multiple force and the supply and demand analysis is required, this would cause the equilibrium to shift from the current prices and qualities. Depending on the forces, the equilibrium may shift to cause a price rise and a fall in demand or a price drop and an increase in the demand.

Scenario 3

“In this scenario, suppose that an increased number of corn consumers enter the corn market because they are purchasing corn to meet a growing demand for corn-based ethanol.”

In this case, an increase in consumers means and increased demand. When the demand goes high, the prices for corn will also go high. This will therefore see an increase in the supply for the product as more suppliers seek benefit from the market situation.  Here, the equilibrium will shit to have a high optimal price and a high optimal quantity.

Price

(E P)

 

 

 

Units                  (E Q)

 

 

                                 Scenario 4

“Simultaneously, the US Department of Agriculture increases subsidies for corn production, in an effort to support/stabilize farm income.”

Subsidies from the government will enable the producers to increase the volume of supplies which in return will lower the prices of the commodities. Lower prices will increase the demand for the products. This will lower the optimal price at equilibrium and increase the optimal quantity at equilibrium.

 

 

 

Price

 

(EP)

Units(E Q)

 

                                 Scenario 5

“Suppose corn producers can readily change-over their operations to produce soybeans instead. Assume it is simple for a producer to grow corn or soybeans on a piece of land the producer simply decides to change the crop in the next growing season.”

If the cord producers chose to change the crop to soybeans in the next growing season, that indicates a direct decrease in the supply for cord in the consumer market. According to the laws of supply and demand, a decrease in supply will cause an increase in prices which in return will decrease the demand for the corn. The expected impact is a rise in the equilibrium price and a decrease in the equilibrium quality.

In addition to this, assuming that there is notable increase in price in the production of soybean,the supply prices at the consumer markets to increase. An increases in price for the products will cause the decrease in demand for the products. This will therefore mean an increase in the equilibrium price and a decrease in the equilibrium quality. The producer’s reaction to produce soybeans instead of corn will cause a shortage if corn supply which will in return increase the price of corn. This will reduce it consumptiondemand and lead to the increased equilibrium price and decreased equilibrium quantity.

 

 

Price

 

 

 

 

(EP)

 

Units                          (EQ)

 

 


 

References

Azar, O. H. (2014). Optimal strategy of multi-product retailers with relative thinking and reference prices. International Journal of Industrial Organization, 130-140.

Baumol, W. J., & Blinder, A. S. (2015). Microeconomics: Principles and Policy. Boston MA: Cengage Learning.

Gwartney, J. D., Stroup, R., Sobel, R. S., & Macpherson, D. A. (2015). Macroeconomics : private and public choice. Stamford, CT : Cengage Learning.

Kotler, P., Burton, S., Deans, K., Brown, L., & Armstrong, G. (2015). Marketing. North West Shelf: Pearson Higher Education AU.

 

 

October 28, 2016

 

 

Supply and Demand

 

 

 

 

 

 

 

By

 

 

 

 

 

 

 

 

 

 

 

 

Instructor

Course

Code

Institution

Date of Submission


Introduction and Over View of the Study

In economics, demand refers to the consumer’s desire, their ability and their willingness to incur a price in order to have a product or a service(Azar, 2014). On the hand, supply refer to the amount of product or service units that a firm is able to produce and offer to a particular market for consumption(Kotler, Burton, Deans, Brown, & Armstrong, 2015).  A market is where the exchange of the goods and services take place between consumers and the suppliers(Gwartney, Stroup, Sobel, & Macpherson, 2015). The two are some of the greatest forces that influence the situations in a market.

This study therefore seek to evaluate several market scenarios and use graphs to illustrate the expected situations in relation to all factors that are important basing model of supply and demand. Each scenario is discussed separately from others and the normal assumptions of the laws of supply and demand in a market are used together with their determinants. In this study, the scenarios are made basing on 240- Foot Industrial Wind Turbines.


 

Part One

Using model of supply and demand to analyse various market scenarios

Scenario 1

“A technological advance reduces the cost of production for industrial wind turbines”

Through technological advances, the cost of producing industrial wind turbines reduces hence the producer firms are able to increase the number of units they can supply in to the market. The law of supply and demand suggests that, when the supply increase, prices drop and when prices drop, the demand increase(Baumol & Blinder, 2015). Therefore, the expected curve for demand and supply with prices dropping is as illustrated below;

 

 

 

 

 

 

 

 

Scenario 2

“The number of consumers of industrial wind turbines increases, because more firms in private industry are buying wind turbines to generate power for themselves; in addition, a larger number of public utility companies are buying wind turbines as a greener source of electrical power.”

Increase in number of consumers illustrates and increase in demand for the wind turbines. According to the laws of supply and demand, when demand increase in a normal market, the prices increase. This can be illustrated by a graph as below;

 

 

 

 

 

Scenario 3

“Suppose natural gas is a form of energy as a consumer substitute for industrial wind turbines as a source of power (as compared to industrial wind turbines). What change is predicted in industrial wind turbines if the price of natural gas energy decreases?”

In a situation where the consumers have an alternative substitute product, like in this case where natural gas can be used to substitute wind turbines, a decrease in the cost or supply prices of an alternative product causes a drop in the demand for the other product. In this case, the drop in natural gas energy prices will result into a drop in the demand for wind turbines.

 

Price

 

                                 Scenario 4

“Suppose a government subsidy that had been available to the producers of wind turbines is completely eliminated, and the cost of producing wind turbines rises, as the government subsidy is taken away. Predict the change in the wind turbine market caused by the removal of the subsidy.”

The subsidy causes the cost of production of the wind turbines to drop. Eliminating the subsidy causes the cost of production of the wind turbines to increase. Increase in the price of production increases the price of selling the products in the market.In a normal market situation, increase in prices of commodities causes a decrease in its demand.

 

 

Price

 

                                

                                

                                 Scenario 5

“Assume steel is a resource used in the production of industrial wind turbines. If global steel prices decrease dramatically, predict the impact. Does the supply or the demand for industrial wind turbines change? Why? What is the direction of change? Why?

A decrease in steel prices will directly reduce the cost of producing wind turbines. This will increase the ability of the wind turbines producers to supply more units of the products to the market. According to the laws of supply and demand, an increase in supply causes a decrease in prices which in return increases the demand for the products in the market. The curve of demand and supply will be illustrated as below;

 

Price

 

 

                                 Scenario 6

“Suppose the entrepreneurs who make and sell industrial wind turbines have the technological capacity to readily changeover their production operations to produce smaller residential wind turbines. If the price and profitabilityof producing residential wind turbines increase, what is the impact on industrial wind turbines?”

The ability of the entrepreneurs to produce residential wind turbines increases their demand for the products. However, according to the laws of supply and demand, in a normal market, an increase in the prices of the wind turbines will cause a decrease in the demand for the products in the market. This can be illustrated as below;

 

 

 

Price

 

 

 

 

Units

Part Two

Using the model of Supply and Demand to make predictions on changes in the equilibrium price and the equilibrium quantity of corn

                                 Scenario 1

“Suppose above-normal growing conditions (near-perfect weather, ideal soil moisture, no pest infestations, etc.) create a bumper crop of corn. Use supply-and-demand to predict the impact of the bumper crop on the equilibrium price and equilibrium quantity of corn.”

A bumper crop is a crop that yields very high levels of harvest than the expected volumes. Such a case causes a high supply which in return causes prices to drop. According to laws of supply and demand, the drop in prices causes the demand for the products to increase as consumers can afford to buy products.

Price

 

(EP)

                                

                                               (EQ)    Units Sold

In the case above, more suppliers enter the market due to high demand. The intersection between the demand and the supply curves is the equilibrium. The actual change between the normal and above normal growing conditions involves increased supply which in return increases the demand for the corn due to lowered prices. The predicted model results are similar to that of other commodities. This is the case because the corn operates in a market environment that is affected by other factors such as competition, ability of customers to buy and the willingness to buy products.

Scenario 2

“Suppose corn is a viewed as a normal good from the consumer household income perspective. If a worldwide recession reduces household consumer incomes on global scale, use supply-and-demand to predict the impact of decreased consumer income on the equilibrium price and equilibrium quantity of corn.”

A worldwide recession that reduces the household consumer’s incomes reduce the ability of consumers to pay for the corn. This therefore reduces the demand for the products in the market. A decrease in demand leads to a decrease in supply. This will cause the equilibrium price and the equilibrium quantity of the corn to decrease.

Price

 

(EP)

Units Sold(EQ)

Supposing the corn market is impacted by multiple force and the supply and demand analysis is required, this would cause the equilibrium to shift from the current prices and qualities. Depending on the forces, the equilibrium may shift to cause a price rise and a fall in demand or a price drop and an increase in the demand.

Scenario 3

“In this scenario, suppose that an increased number of corn consumers enter the corn market because they are purchasing corn to meet a growing demand for corn-based ethanol.”

In this case, an increase in consumers means and increased demand. When the demand goes high, the prices for corn will also go high. This will therefore see an increase in the supply for the product as more suppliers seek benefit from the market situation.  Here, the equilibrium will shit to have a high optimal price and a high optimal quantity.

Price

(E P)

 

 

 

Units                  (E Q)

 

 

                                 Scenario 4

“Simultaneously, the US Department of Agriculture increases subsidies for corn production, in an effort to support/stabilize farm income.”

Subsidies from the government will enable the producers to increase the volume of supplies which in return will lower the prices of the commodities. Lower prices will increase the demand for the products. This will lower the optimal price at equilibrium and increase the optimal quantity at equilibrium.

 

 

 

Price

 

(EP)

Units(E Q)

 

                                 Scenario 5

“Suppose corn producers can readily change-over their operations to produce soybeans instead. Assume it is simple for a producer to grow corn or soybeans on a piece of land the producer simply decides to change the crop in the next growing season.”

If the cord producers chose to change the crop to soybeans in the next growing season, that indicates a direct decrease in the supply for cord in the consumer market. According to the laws of supply and demand, a decrease in supply will cause an increase in prices which in return will decrease the demand for the corn. The expected impact is a rise in the equilibrium price and a decrease in the equilibrium quality.

In addition to this, assuming that there is notable increase in price in the production of soybean,the supply prices at the consumer markets to increase. An increases in price for the products will cause the decrease in demand for the products. This will therefore mean an increase in the equilibrium price and a decrease in the equilibrium quality. The producer’s reaction to produce soybeans instead of corn will cause a shortage if corn supply which will in return increase the price of corn. This will reduce it consumptiondemand and lead to the increased equilibrium price and decreased equilibrium quantity.

 

 

Price

 

 

 

 

(EP)

 

Units                          (EQ)

 

 


 

References

Azar, O. H. (2014). Optimal strategy of multi-product retailers with relative thinking and reference prices. International Journal of Industrial Organization, 130-140.

Baumol, W. J., & Blinder, A. S. (2015). Microeconomics: Principles and Policy. Boston MA: Cengage Learning.

Gwartney, J. D., Stroup, R., Sobel, R. S., & Macpherson, D. A. (2015). Macroeconomics : private and public choice. Stamford, CT : Cengage Learning.

Kotler, P., Burton, S., Deans, K., Brown, L., & Armstrong, G. (2015). Marketing. North West Shelf: Pearson Higher Education AU.

 

 

October 28, 2016

 

 

 

 

 

 

 

 

Operation Management

Name

Institution

 

 

 

 

 

Operation Management

Operation management is the administration of practices in various fields to enhance the level of efficiency within an organization (Jones & Robinson, 2012). The operation managers are obligated with utilizing the pre-set resources, staff, technology, and schedules to ensure that results are delivered within the specific period. Operation management may be embraced in different operations in external and internal environments of organizations; hence, the practice of can be used to prepare for natural disasters in different aspects (Mahadevan, 2010).

Notably, natural disasters are sudden and extreme events resulting from natural processes (Vitoriano, Montero, & Ruan, 2013). Due to their naturally occurring processes, they are hard to prevent compared to artificial disasters. However, preparations and may be adopted to reduce the damage by embracing practices such as operation managements.

Operation management can be used to prepare for natural disasters regarding impromptu decision-making that is a major setback when the calamities are experiences. Precisely, the operations management practice will be employed in making rational decisions based on detailed information on disaster management. In the short-run, operations management reduces duplication of roles and confusion that is contributed to by protocol from different emergency responders (Vitoriano, Montero, & Ruan, 2013). Consequently, have an operations management department will portray specific roles; therefore, reducing time wasted in making decisions during natural disasters.

Secondly, operation management can be used in providing competent management plans and policies that decrease cases of human mortality and lost revenue (Mahadevan, 2010). In most cases, the lack of operations management leads to lost revenue due to the lack of preparedness of the dispatch of operations to the wrong regions. Consequently, operation management embarks on research that provides previous data on natural disasters. In-depth analysis of the data shows the convenient ways to dispatch the emergency management crew and reduce wastage of the public resources. Operation managers are obligated with the role of financial management; hence, incorporation of operation management in disaster preparedness ensures that the funds have been used efficiently (Mahadevan, 2010).

In addition, operation management can also be adopted to enhance communication that is vital for natural disasters. According to research, previous cases of natural disasters have had large casualties since there is not communication during the lead-time. For instance, operations management will gather data on a natural disaster such as a hurricane and use research to comprehend it causes and occurrences. Subsequently, the practice will provide the individuals with a lead-time to prepare for the disaster; therefore, reducing damage.

Operation management at the business level is vital for providing workers with a detailed plan on ways to react in the case of a natural disaster (Mahadevan, 2010). Some organizations are located in prone areas where natural disasters occur frequently. As a result, the operations management team is required to provide safety lessons to other employees on ways to overcome the aftermath of the disasters at their workplaces where in most cases are exposed to heavy machinery.

Regarding research on various aspects of operations management, it can be used to prepare for natural disasters using the right equipment and materials. For example, material that is tolerant to extreme weather conditions or natural calamities may be dispatched to locations that suffer most and reduce fatalities (Vitoriano, Montero, & Ruan, 2013).

Finally, operations management may be used as a control base during a natural disaster; hence, assisting in its preparedness. In some cases, the operation management departments may regulate all operations during natural disasters whereby the police, emergency personnel and the firefighters are under one control. This approach ensures preparedness and coordination of the lifesaving activities and reducing fatalities. In conclusion, the paper has provided substantial knowledge on the relation between operations management and ways it can be used to prepare for natural disasters in future.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Jones, P. & Robinson, P. (2012). Operations management. Oxford: Oxford University Press.

Mahadevan, B. (2010). Operations Management: Theory and Practice. Upper Saddle River: Pearson.

Vitoriano, B., Montero, J., & Ruan, D. (2013). Decision aid models for disaster management and emergencies. Amsterdam: Atlantis Press.

 

 

October 28, 2016

 

 

 

 

 

 

 

Demand and Supply

Student Name

Name of University

 

 

 

 

Question Four

Mayonnaise exhibits a relatively inelastic relative price elasticity. A change in price does not trigger a significant shift in quantity demanded. The inelasticity can be explained by the fact that mayonnaise is a necessity, consumed regularly, and accounts for a small portion of the total budget of a family or an individual. A specific brand of Mayonnaise, on the other hand, has a relatively elastic demand. A slight change in price result into a larger change in quantity demanded as consumers opt to buy other cheaper brands (Chauhan, 2009).

In the case of Chevrolet automobiles, the price elasticity of demand is relatively elastic since there are numerous substitutes in the market. Also, automobiles are capital items that account for a significant portion of the total budget for an individual. (Chauhan, 2009).

Jaguar automobile is a Veblen good whose relative price elasticity is relatively elastic and positive. The behavior of Veblen goods defies the law of demand such that demand increases as price increase (Dwivedi, 2003). Jaguar not only meets the underlying fundamental need but also for snob appeal. Brand loyalty reduces the number of substitutes in the market limiting shifting to other brands. Therefore, substitution is dependent on whether the consumer considers other brands as substitutes or not (Chauhan, 2009).

Washing machines is a durable good with low relative price elasticity. The more durable a washing machine is, the lower the price elasticity of demand. The item constitutes a significant portion of a person’s budget, and consumers will opt to prolong the machine’s useful life, through repair and replacement of key components and parts, in place of purchasing a new one when prices escalate (Chauhan, 2009).

The relative price elasticity for air travel for air is relatively elastic. Pricing of the service is dependent on season and purpose. Many airlines reduce flight ticket prices significantly during off-peak to spur sales and raise ticket prices during peak seasons. Travel for leisure may be affected by price increase while business trips may not. Travelers may choose other means like train and road trips for domestic travel or plan for vacations during off-peak seasons to avoid higher prices. (Khanna, 2009-10).

Beer is a habit forming commodity with relatively inelastic relative price elasticity. Consumers of beer seem insensitive to price changes stabilizing demand even when prices increase. On the other hand, diamond rings have relatively elastic relative price elasticity due to a large number of substitutes in the market the fact that diamond rings account for a significant portion of the total budget for a person (Chauhan, 2009)

 

Question six

Cross-elasticity coefficient for personal computers and software is negative. The two items are complementary goods. The decrease in demand for one product results in a reduction in the other product’s demand. In the case of electricity and natural gas, the coefficient is positive, since a substitute relationship exists between both products.

Apples and oranges are substitutes with a positive Cross-elasticity coefficient. To consume more of either, a consumer will choose to give up more of one to gain extra units of the other.

Bread and DVRs are unrelated products with zero Cross-elasticity coefficients. Increase or decrease in the price of one product does not impact the other product’s demand directly. However, if they are competing for dollars in a budget, the products may be regarded as substitutes (Khanna, 2009-10).

 

Question Eleven

Cigarettes and alcohol are habit-forming goods. The demand curves for both are usually relatively inelastic to changes in prices. Any increase in price as a result of additional taxes would have a relatively little effect on the quantity demanded. Therefore, governments will collect higher taxes in the case of cigarettes and alcohol as opposed to a situation where the government would impose taxes on products with an elastic demand resulting in a great decline in the quantity demanded (Khanna, 2009-10).

Question Thirteen

The firm operates in a perfectly competitive market characterized by intense competition In such a market; there are many close substitutes. A slight increase in price by the firm results in loss of a considerable amount of business to competitors who are offering the same product or a close substitute at a lower price. A horizontal demand curve depicts the fact that quantity demanded is highly sensitive to slight changes in price (Chauhan, 2009).

Question eleven

I would expect cross-price elasticity to be negative for Television sets and DVRs since both products are compliments. On the other hand, Rye bread and whole wheat are substitutes with positive cross-price elasticity. The cross-price elasticity is negative for the construction of new residential housing and furniture since both are complimentary goods. No correlation exists between breakfast cereal and men’s shirts as both are unrelated products, thus zero cross-price elasticity except if they are competing for dollars in a budget when they would be regarded as substitutes (Khanna, 2009-10)

 

 

 

Question twelve

  1. Arc price elasticity (pizza)

Percentage Quantity change in pizza demanded ÷ percentage change in price of pizza

= ((130-70)/ ((130+70)/2)) ÷ (($2.50 – $3.50)/ (($2.50+$3.50)/2))

= 60% ÷ -33.33%

= -1.80

  1. Arc cross-price elasticity (soft drinks and pizza) = %change in soft drinks quantity demanded                                                         ÷ % change in price of pizza

= ((90-40)/((90+40)/2)) ÷ (($2.50 –                                                                                                      $3.50)/(($2.50+$3.50)/2))

= 76.92% ÷ -33.33%

= -2.31

 

 

 

 

 

 

 

 

 

 

References

Chauhan, S. P. (2009). Microeconomics: An Advanced Treatise. Delhi: PHI Learning Private     Ltd.

Dwivedi, D. N. (2003). Microeconomics Theory and Application. Delhi: Dorling Kindersley      (India) Pvt. Ltd..

Khanna, T. R. (2009-10). Business Economics (First ed.). Delhi: KK Publications Education      Publishers.

 

 

 

October 28, 2016

 

 

 

 

 

 

 

 

 

 

Statement of purpose on Organizational Behavior

 

Name

Institution

 

 

 

 

 

 

 

 

 

 

I am inspired to pursue a course in organization behavior because it will equip me with knowledge and ability to make proper decision within a company. Organization Behavior involves the study of the impact that groups, individuals, and structures have on behaviors of human beings within an organization setting. Organization behavior is well linked with other disciplines of study such as psychology, management, communication and sociology to provide students with a holistic knowledge of all the components affecting the company. My goal for choosing to pursue organization behavior course is to gain a comprehensive understanding of the employee’s attitude, personality, and motivation. My second goal is to understand different organization structure, culture and how organization teams operate. I am academically prepared to pursue organization behavior course because it is a field of study that I am greatly interested in. During my undergraduate, I studied a unit on organization behavior which provided me with a lot of knowledge and interest in understanding the personality, attitude, and factors affecting employee’s motivation in the workplace. I also learned that organization behavior is divided into three main categories namely employees within an organization, working groups and how the organization behaves at the macro level.

I am determined to study organization behavior so that I can expounding my knowledge on organization culture and structure. During my working periods, I have observed that individuals and organization cultures are different. I have discovered that significant discrepancies between employees’ behaviors and organization behavior tend to occur. The difference is caused by the nature of the organization. For example, the organization behavior on government parastatals and in the privately owned enterprise is different. Employees working in the privately owned business including short and medium enterprises tend to be more industrious as compared to those working in government parastatals. The difference may be attributed to organization culture and personality of the employees. Also, the location of the organization is important in determine originations behaviors. For example, in most Chinese corporations if an employee makes a decision without direct instructions from the supervisor it may be considered as lack of respect to your supervisor. The instructions must come from the top management and flow down to the lower levels of organization structure.

My admission to undertake a course on organization behavior will help me to cope with different problems and make an informed decision in my place of work. For example, organization behavior will provide me with skills that will assist my fellow managers working in the human resource manager to assign employees roles based on their qualifications and personality. For example, during my international working experience, the knowledge of Organization behavior helped me to know that an introvert can work well in an office as an IT expert or as an accountant. On the contrary, an extrovert can work well outside the office for example in direct marketing, product promotion and in strengthening business relationships.

My goal after completing my doctorate studies is to become a well-vested scholar on organization behavior research. My preferred countries for research is the United Kingdom, and in the U.S.  The research on organization behavior will be imperative due to globalization and restructuring of world trade organization.  A lot of the investigation will be needed, and hence I will be there ready to conduct such research because the skills and knowledge that I will acquire after completion of my Ph.D. degree will be of great help in doing research. I have chosen to pursue my Doctorate in the field of organization behavior in the United Kingdom because U.K organizations are more developed and have complex structures which will provide me with reach background information to make my research become a success. By studying in the United Kingdom, I will have the skills and knowledge necessary to solve not only organizational problems but also other economic problems that are facing most companies across the globe.  During my past Master of Business Administration program one of the requirements was to write plans and make presentations on the on business and marketing research which I did successfully. I worked hard and managed to meet all the university requirements for the conferment of an MBA degree.

Conclusively, I am planning to put even more effort towards successful execution of the Ph.D. coursework on organization behavior so that at the end of the study I will be conferred with my doctorate and use the knowledge gathered in solving individual and organizational problems through the creation of new knowledge. The knowledge acquired will provide me with a fundamental basis in coming up with a most update and efficient solution and disseminate the knowledge through electronic and print media so that it can change the behavior of most organizations across the world. Also, the knowledge of organization behavior will provide me with proper skills as a manager for making a sound decision in an organization where I work. Also, studying organization behavior will help me to solve most of the contemporary problems facing my organization where I work.

 

 

 

 

 

 

October 28, 2016

Name

University

Course

Instructor

Date

Statement of Purpose: PhD Program in Finance

I have a nice job with incredible advancement opportunities. I do enjoy productive work experiences. In my current job, the employer recognizes and lauds my finance and economics skills. In addition to that, I receive token of appreciations from my supervising managers, I enjoy intellectual relationships with my PhD associates and have many good friends. But I feel I have not yet reached my destination where I want to be. Indeed, my colleagues and friends are surprised by my choice to leave my well-paying job for further studies, but I have to pursue and achieve my high school career dream:  research and teaching. The present career falls short of my long term goal of teaching, and carrying out research. Money and excellent career are not the only things that give me a sense of satisfaction, I am also driven to contribute to the community and my specialization and I would be able to achieve this after earning a PhD.  I want to use my position as a lecturer to hone talents, and nurture new crop of scientists. Besides transferring curriculum knowledge, I like to inspire others.

I gained solid background in finance and economics in my undergraduate studies and got exposed to theories and concepts of finance. I learned about the application of concepts of economics in finance and the essential of math in finance. The interest in finance motivated me to learn more. I have realized how much I stand to benefit from advancing my studies. While I have heard many say that it is not worth it to sacrifice assured career advancement for unessential training, I am fully convinced this is the right decision I have ever made. I know and understand myself better that I gain greater fulfillment by pursuing a PhD program in Finance than by advancing and earning a huge salary in my current career.

The thirst for learning provides me with a sense of fulfillment and satisfaction. My desire to learn more is driven by the search for knowledge to learn more and motivated by the challenge presented in learning. A PhD program in Finance will offer me the opportunity to continue in my search for knowledge.

My decision to attend a PhD program emerges from the realization that both my undergraduate and graduate studies were only starting points and stepping stone respectively in learning important financial and economics skills. Though my finance and economic education, has laid the foundation in the quest for knowledge and enabled me to understand technical elements of finance, still I lack the analytical and critical skills in the application of finance theories. I want to be able to use my finance knowledge to comprehend corporate finance, portfolio management, asset pricing, the behavior and structure of financial markets, financial decision making and international finance. The PhD program in Finance gives me a strong foundation in the empirical and theoretical tools of finance.

I chose finance because I want to use it to understand how human behavior is reflected in financial markets. It is easy to explain the notion of minimizing risks and maximizing returns but also amazing to explain asset pricing and evaluation. There is no denying that modern innovations and research in theories of saving and portfolio choice have incredibly influenced the methods of asset pricing used by policy makers and researchers. I believe the PhD program would enable me to analysis markets and financial institutions, which are core to understanding the tradeoffs between modern economic systems and their ramifications for financial crisis and fragility. I would like to learn about various economic variables like interest rates, inflation and currency returns.

My goal in attending a PhD program is to acquire applicable research capabilities and theoretical knowledge at a higher rank. One line of finance I would like to pursue is international finance. The inclination towards the global economy and promotion of free trade has opened up enormous opportunities to innovate newer methodologies, instruments and tools in the finance management. For this reason, I want to gain in-depth knowledge so that I could develop analytical approaches and methods to finance management.

In research, the area I would like to focus on is the financial market development, especially of emerging markets of developing countries. I hope to learn how finance theories apply to the market behavior of the least developed countries and also to explore alternative theoretical frameworks to account for such behavior.

With my strong background and training in mathematics, statistics and economics, these quantitative disciplines give me a perfect background to pursue PhD in Finance. I strongly hope that the PhD program would give me the knowledge I long for to understand finance theories and concepts, which I would incorporate in my research and teaching career. Through determination and commitment, I believe I would succeed in the program.

October 28, 2016

Name:

Institution:

Date:

Statement of purpose

My interest in economics can be traced back to my high school years. When I was introduced to the subject, I was fascinated by the various theories and models that were used to explain issues such as demand and supply of goods and services. Even though I enrolled for a Bachelors Degree in Industrial Engineering and International Trade and Management, I always enjoyed economics as a subject. I was fascinated by the principles, rules, and axioms that govern various facets in economics which are often utilized in the analysis and interpretation of economic issues in the real world. I was also privileged to enroll for a Masters Program in the same field. The program exposed me to the various methodologies and tools employed in economic analysis and research. My desire to be part of your institution’s PhD Program in economics is driven by my passion for carrying out independent research that will be used in solving real life problems in the society.

Although almost all areas of economics interest me, I am particularly focused on the area of international economics. I believe that the current debates on “protectionism versus free trade” offer a prolific ground for research. I understand that with globalization, organizations and nations have been able to improve their economic performance. However, a lot needs to be done to improve our understanding on partial protection of domestic industries. I believe that through research, I will be able to contribute to the knowledge base in this area of study and enable organizations and nations to achieve optimum economic performance. Additionally, I am interested in the PhD program in your institution because I would like to advance my understanding on game theoretic models because they are the cornerstones of economic analysis and policy making. I believe that I can utilize such knowledge to come up with solutions to issues such as the quest to reduce tariffs, form and preserve customs unions, and do away with cartels in internationally traded goods.

I believe that I will be able to achieve this dream of becoming an outstanding researcher in the field of economics by improving my research knowledge and capabilities which I gained through my Masters program. My main aim is to have an exceptional grasp over econometrics so that I can be able to tackle stochastic statistical data in relation to the right economic theories and carry out complete empirical verification, as it has always been positioned in an incomplete equilibrium framework in the past. In future, I would like to use my knowledge in model building to research econometric methodology for purposes of improving approaches to analysis and interpretation of economic issues.

I am a hardworking and dedicated person, and ready to overcome the various challenges that are common to scholars in their pursuit to become the best in their careers. I will therefore strive to ensure that I utilize every opportunity and resource to acquire quality knowledge in the very competitive atmosphere which I hope to apply in my future career and become a reliable economist who is able to provide solutions to societal challenges.

I believe that my educational background as well as my academic abilities makes me an ideal candidate for this program. I have a strong background in mathematics and management of industrial based organization. Additionally, I was exposed to the field of research in economics in my Masters studies and therefore I have a good grasp of basic economic modeling concepts. I would like to expand my knowledge in data manipulation and abstract modeling so as to become a good researcher in the field. Additionally, I am an outgoing person who is able to share and learn from others. Because of this, I believe that I am going to utilize my time in your institution by forming lifelong relationships with staff and students that will contribute in collaborative work in the area of research.

I want to study in your institution because it emphasizes on academic rigor especially on analytical tools which are the basis for good research. I believe that your institution will fully develop my outstanding mathematical and analytical skills which I have always wanted to exploit to the greatest extent. Additionally, the distinguished faculty staff in your institution has been another reason why I am interested in your program. I believe that I will have the right guidance and help from the highly qualified staff to learn all the requirements of research work. Apart from my aspiration to use my knowledge in policy development after completing the program, one of my long-term goals is to teach students at the undergraduate and graduate levels. I understand that a good teacher should apply a lot of effort so as to bring out the highest potential out of their students. I therefore believe that this program will also equip me with leadership and teaching skills. I am looking forward to this precious opportunity to be part of your PhD program.

 

 

October 28, 2016

 

 

 

 

 

 

 

 

 

Statement of Purpose

Student’s Name

Institution

 

 

Statement of Purpose

My desire to proceed with education to the postgraduate level has been sparked off by the competitive nature of the job market today. Also, I consider it a necessary experience to grow my skills to advanced levels and achieve higher knowledge in my area of passion. I believe that pursuing a post-graduate course in operation and supply chain management will facilitate further professional growth and, therefore, enable me to make good use of the business knowledge I have acquired in my previous education levels. As a business professional, the need to specialize further in operation and supply chain management at post-graduate level promises a clear path towards accomplishing my career goals. I believe that I will be in a position to nurture my skills and competence in various business operations and logistics. My motivation, therefore, lies significantly like the job market today and the need to have advanced, competent know-how on business transactions and supply chain management.

The current global economy is increasingly becoming competitive and interconnected at the same time. Consequently, it is necessary for companies to own a cutting-edge supply chain management which will be essential in staying up-to-date with continued global changes regarding capacities of production. Correspondingly, owning a supply chain management assists businesses in adjusting accordingly to the global variations in the market. My desire to pursue a post-graduate course in supply and operations management will provide a platform through which I will work in well-established companies. I will, therefore, assist in the maintenance of innovative developments and the implementation of strategies that relate to effective supply chain management by businesses. I will have the right competency levels that will be essential in assisting businesses to stay profitable and competitive in the international platform.

Being offered an opportunity to study in your University means the world to me as I will equip myself with the skills relating to links in the supply chain. Moreover, I will learn more about the processes of making strategic changes that are fundamental in guaranteeing continued competitiveness. A post graduate degree in supply chain management offers extensive resources that apart from the theory work in classes, also provides industrial links and practical experiences through internships. I will, therefore, graduate with a highly practical understanding of the skills required in the management of the dynamics in the contemporary world business’ complex supply chain.

Since childhood, I have been fascinated by the way businesses work besides the operational perspective of everything. My teachers and parents over the years provided the right support that rendered taking a bachelor’s degree in Industrial Engineering and International trade and management as the dream career choice. For that reason, during my undergraduate career, theory and practice were essential elements for building up my professional competency levels. By studying a variety of subjects that revolved around management and engineering, my learning became enhanced as it was reflected in my excellent academic grades. However, I have always aspired to undertake a career in business, particularly in logistics. A business career offers an opportunity in which one can explore different borders and cultures. I have always studied various aspects of business in search of the particular area that would prove to be suitable for my areas or expertise, skills, and interest. Having specialized in industrial engineering and International trade and management, I have gained knowledge in various aspects of management.

My bachelor’s degree has given me the fundamentals that are essential in business administration. Furthermore, with the academic and work experiences that I have so far gained, I believe that I am adequately prepared and confident enough to register for the postgraduate program in your institution. Additionally, the internship positions and work experience that I have had through the years have provided enough skills that are essential for learning this course. I have held a variety of positions in different organizations throughout my career growth and development. My education experience has equipped me with skills of knowing the importance of effective communication in logistics and operations, especially when it comes to multinational corporations. On the same note, so far I have enhanced knowledge relating to different cultures, economies and potential markets where businesses operate. I have also been equipped with essential knowledge on historical backgrounds, political influences, and policies that exist in the sales environment in different countries. My work experience also gave an opportunity in which I discovered my growing thirst for learning. As a result, I saw the need to expand my knowledge through engaging in challenging tasks with strict deadlines to achieve concrete results. My professional competency is evident from the awards that I have received in the different organizations that I have worked for in the past. Therefore, with the growing need for the highly qualified professionals in the field of supply chain management besides the continued advancements in the education sector, I find this course relevant in my current career level. I, in this light, believe that after the pursuit of the degree; I will emerge as a professional with remarkable skills in the field.

 

October 28, 2016

 

 

 

 

 

 

 

Economics

Student’s Name

Institutional Affiliation

 

 

Question 3

In microeconomics, the production function is a representative of the relationship between the quantity of factor inputs and the yields that result from the production process. There are three measures of productivity namely total product; aggregate output, average product; output per unit of labor and marginal product; change in output as a result of a change in a unit of factor input (Hubbard & O’Brien, 2008). In defining the production function, it can be either short run or long run.

In the short run function, the assumption is that at least one-factor input is in fixed supply. Thus, only the quantity of one-factor input can be varied (Hubbard & O’Brien, 2008). In the short run production function, the three stages of production are defined by the interrelationship between marginal, average and total costs. Presented graphically, the first stage has a positive slope of average product curve up to the point where the marginal costs curve intersects with the average cost curve. The second stage of the production function continues up to the peak of the total product curve which corresponds with a marginal product curve with a slope equal to zero. The third stage is defined by a negatively sloped total product curve.

The law of diminishing marginal returns argues that as more units of a variable production factor input are combined with the fixed unit, it reaches a point where the marginal returns start to diminish (López, 2013). In the first stage of increasing marginal returns, the fixed factor is underutilized thus marginal productivity is increasing. In the second stage, marginal productivity is rising but at a decreasing rate meaning that additional units of the variable factor produce lower returns progressively. In the third stage, the cost of adding an extra unit of variable input outweighs the yields and thus generates negative marginal returns.

 

 

Question 2

As seen from the above excel worksheet, marginal return increase up to the point where the number of fishermen is equal to three but then begin to diminish after that. Thus, the point of diminishing marginal return is where number of employees is equal to 4.

As show in the above excel worksheet, stage one of the short run production function characterized by increasing average product is between one unit of labor and three units of labor. The second stage continues up to the point where marginal product is positive beyond which the production function enters into the third stage.

 

At a market price of $3.5 and wage rate of $100 per unit of labor, the company should hire 7 fishermen since the yield the highest profits of $1995.

If the price for tune were to fall to $2.75 or rise to $5, the company would not change the number of fishermen employed because 7 fishermen would still yield the maximum profitability. It is important to note that so long as the company breaks even at the prevailing market price for tune, it will continue production so long as marginal product of an additional fisherman is positive.

In the above analysis, a crew size of above seven, irrespective of the market demand yields negative marginal productivity. Consequently, even in the case where the demand calls for a boat to catch at least 1000 pounds of fish, the company would still operate optimally with a crew of 7 fishermen.

 

 

 

Chapter 7

Question 2

The economic concept of diminishing marginal returns is a critical part of the theory of the firm, consequently, it is important to have an understanding of the concept for effective decision making. Identifying the defining characteristics of the three stages of the production function is relevant to business decisions for two reasons; First, managers with an understanding of the stages will be aware of how to change the units of labor to increase productivity and fully exploit the potential of a fixed factor of production(López, 2013). Second, understanding the three stages helps in determining the stages of production in an enterprise that is likely to yield the greatest profits. Moreover, managers can use the information to know when they must reduce the units of labor if the production process has become inefficient and wasteful.

The question on increasing the units of labor to meet market demand for a product is not relevant to business decisions because it is addressed once the optimal number of labor units is determined(Singh, 2013). Once a manager ascertains the optimal labor units, he is aware that increasing the units due to increased demand for a product will just add inefficiencies to the production process.

Question 11

A firm’s efficiency is affected by size provided that the expansion of the firm is in tandem with productive efficiency. Therefore, I disagree with the statement that operating a large plan inefficiently is better than operating a small firm efficiently. The primary measure of efficiency is the ability to keep the costs of production low and not necessarily the increase in the size of a firm(Singh, 2013). Consequently, it is possible to have a small firm operating at maximum efficiency being more profitable than a big firm operating at less than maximum efficiency.

While economies of scale accrue from a firm’s increase in size, inefficiency can lead to diseconomies of scale and erode the advantages that would come with size. An inefficient firm, despite its big size would be characterized by high long run average costs which would erode profitability. On the other hand, a small firm operating efficiently would be characterized by low long tern average costs which would accelerate profitability.

Question 13

I would agree with this statement for several reasons. First, it is true that as a company increases in size, fixed costs remain the same and do not vary with size. Therefore, increasing output would be accompanied solely by variable costs but would also derive lower average costs for the firm which has the potential to increase profitability(Singh, 2013). Second, economies of scale are synonymous with operational efficiency which means that additional units of output would be produced with greater efficiency which would gradually lower the average costs. Moreover, if a company has not fully exploited the potential of the fixed assets, retaining production at the current level would place a greater opportunity cost on the firm and prevent the firm from increasing its profitability.

 

 

References

Hubbard, R. & O’Brien, A. (2008). Economics. Upper Saddle River, N.J.: Pearson Prentice Hall.

López, A. (2013). Outsourcing and firm productivity: a production function approach. Empirical Economics, 47(3), 977-998. http://dx.doi.org/10.1007/s00181-013-0770-x

Singh, S. (2013). Micro economics. New Delhi: APH Pub. Corp.