2 evaluate costs factors influencing the companys

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2. Evaluate costs factors influencing the company's decision. The concept regarding opportunity costs which make the best utilization of inhibited assets generally implies leaders must choose from two or more choices. With these types of choices, an open door cost trade-off is an affecting element. According to Thompson “To control overheads, including the costs of holding materials, parts, and finished goods inventories, many organizations have adopted techniques like lean manufacturing and just-in-time delivery of parts and materials.” In the case of Broulim’s this can be difficult as the need to have the products available and delivered timely and when ordered is crucial, while also staying within a strict budget. When this is not possible other options must be available or looked at within the department heads to ensure that they are making the best cost decision so as to not lose profits or market share. Thompson also said “They are also necessary to force the operating manager to seek authorization to make changes in spending plans and, therefore, to reveal hidden preferences, capabilities, and trade-off possibilities.” In using this idea the manager is able to control what is specifically needed and can prepare the needed or desired choices to be made to keep costs at a desirable level, while also being able to be prepared for the unexpected. For example, if a business is
Economics Chapter 17 Problems on a tight spending plan, a choice to redesign or replace the company’s computer system may build system effectiveness that may have been previously lacking. However, this could also be affecting other intentions like replacing the old system with a completely new computer workstation instead that may have better capabilities and afford the company to be more effective. 3. Determine strategies that would provide value to the outcome your company is seeking relating to this decision. Very simply, better planning. The company should utilize better planning of how resources should be used with efficiency without being wasted. Using better strategies to increase the customer base, employee happiness and retention. Doing this while marketing to the needs of the consumers in the targeted population with an aggressive yet cost-effective plan. Minimizing the need to re-strategize later and have a sound well thought out plan can be the best way to ensure that the company is able to move forward while making a profit and meeting its goals. Also an area that has been a struggle for the owners is using the strategy of being up to date on technology and more specifically for customers, product prices. Having competition in the area that can be difficult to overcome for consumers by paying a higher price even for better quality product, when they can go to other businesses and be able to get comparable products at lower prices is a point of failure, and possibly future demise of the company in the location it is in.

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