Business enterprise

Analysis of Mrs. Acres Homemade Pies
As mentioned in the draft, Mrs. Acres business is running successfully and seems to be much more potential to increase its profitability. However Mrs. Acres is unable to meet the increasing and is therefore incurring substantial opportunity costs. Considering the three options Mrs. Acres has at her disposal

Option 1
For example assuming that Mrs. Acres raised the selling price of each pie to  6 and there is no projected increase in costs since both production and staff levels are maintained, then the net profit on each unit would be doubled to 3 per pie and for the existing production level of  8,000 per month to be 24,000.

Therefore under this option supply in the short term (i.e.30 days) would be 8,000 pies. As for the demand it can be assumed to be say 10,000 pies.

However in the long term (i.e.12 months), supply under this option would be 96,000 pies. When determining demand in the long-term it can be further assumed that the demand in the short term would see an increase of 5 each month and hence would be 159,170 pies which is almost twice the pies Mrs. Acres can supply and hence would incur substantial opportunity costs due to the unfulfilled demand.

Mrs. Acres can raise its prices by 25 in the short term which would correspond to a similar gap between the supply and demand.

If Mrs. Acres enjoys a monopolistic situation in the market in the long term, then she can raise prices by more than 50 and hence enjoy huge profits with no additional capital expenditure.
The reason behind the difference between the prices in the short-term and the long-term is due to the difference in the gap between supply and demand.

Option 2
Maintaining the demands as assumed in option 1, Mrs. Acres will aim to achieve the demand (i.e. supply) of 10,000 pies in the short term and will have to incur additional costs of 6,000 (3x2000 units).

Even in the long-term there would be no gap between supply and demand since Mrs. Acres will fulfill the demand through expansion of staff and production capacity. Although the equilibrium price would remain unaffected in the long-term due to zero gap between supplydemand but price will also not be affected because Mrs. Acres will not raise them. (Investopedia.com. n.d)
However additional costs in the long-term would 189,150 (3x63, 170 units).

Option 3
Under option 3 additional costs would be nominal since a national restaurant chain would be already quite well established and may already have the resources (i.e. staff and production capacity) to fulfill the demand for pies.

It can be further assumed that the national restaurant chain could increase demand from existing levels through its well established name (Henderson, 2004).

Therefore in the short term it can be comfortably assumed that supply and demand would be the same and equilibrium price would be unaffected as well. Whereas in the long-term it can be expected that there could be a difference between the supply and demand i.e. supply could be more than demand and hence prices would have to lowered or demand could be more than supply and then prices would be affected in a likewise manner. (Investopedia.com. n.d)

The reason behind the price remaining unaffected in the short-term and fluctuating in the long-term is the readily available staff and production capacity of the national restaurant chain which could easily fulfill demand in the short term, however a small gap could be expected in the long-term.

Laundry Detergent business
There could be various factors of production in a laundry detergent business which could be divided into the following
Natural resources

Raw materials
Many modern laundry detergents today use anti-redeposition agents, chemical for example sodium perborate, sodium sulfates etc. along with numerous other ingredients as raw materials.              

Laboratories and other chemical equipment
Although laboratories and related chemical equipment are not natural resources but they play a crucial role in presenting the laundry detergent in its saleable condition alongside many other procedures which are lab independent.

Raw materials in a laundry detergent business play a crucial role in its success since the selection of appropriate raw materials will shape into the final product via different procedures.

Human resources
In a laundry detergent business the following personnel could be required

Chemists
Direct labor in the production process
Production supervisors
Product managers

Appropriately qualified and skilled chemists can prove to be a key factor in the success of a business since they can determine solutions for producing detergents which cannot provide the company with the competitive edge.

Labor involved in the production process also needs to be efficiently utilized such that they add value to the production process. Production supervisors on the other hand have the job of monitoring the production process and ensuring that the resources needed by the production staff are provided on a timely basis.

Product managers in a laundry detergent business will be responsible for their respective detergent brands and will determine the strategic direction of their product, marketing and pricing.

Financial resources
Finance would be required to setup laboratories for testing different chemicals and their solutions. Similarly finance would also be required to setup a production plant where the final product would be produced in bulk quantities for sale to the general public.

Furthermore, finance would be required for the day to day operational activities and salaries of the organizations staff.

Like any other business it would also be recommended for a laundry detergent business to adopt an appropriate mix of debt and equity finance when looking to finance its operations.

Sufficient financial resources and their effective usage can significantly help such a business to establish and overcome initial hurdles with little issue.

Conclusion
Laundry detergent business is a manufacturing business and has similar requirements for instance appropriate manpower, raw materials and competitive pricing. Considering the fact that there are numerous companies which manufacture laundry detergents along with many other products it is essential that any newcomer to the laundry detergent business makes efficient use of the various factors of production along with the ones discussed above.

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