Guillermo’s Furniture Store refers to the situation as an unused opportunity as an opportunity cost, which includes using different business tactics to increase business profit (Emery, etc., 2007). An opportunity cost is the difference between the value of one action and the value of the best alternative, which provides an indication of the relative importance of Guillermo’s Furniture Store decision on the coating. Especially, when the opportunity cost is small for Guillermo and may lead to the cost of an incorrect or correct choice to be small (Emery, etc., 2007). On the contrary, when the opportunity cost is large for Guillermo’s Furniture Store, such as adding the flame retardant, the cost of not making the best choice is large (Emery, etc., 2007). Guillermo needs to analyze thoroughly that there are at least two sides to every transaction, and the parties on the other side can be just as bright, hardworking, and creative as the ideas for Guillermo’s Furniture Store (Emery, etc., 2007).
Table of Contents Executive Summary 3 Introduction 4 Analysis of Alternatives 5 Alternative 1: Introduce a new product 5 Alternative 2: Increase promotion 6 Alternative 3: Raise prices and cut costs 7 Recommendations 7 Appendix: Budgeted Income Statements & the Rate of Growth in Profits 9 Executive Summary Shepard Poles is a manufacturing company that has been providing specialized poles in the market for over ten years. Shepard Poles has about three different product lines: hiking poles, downhill ski poles, and cross-country ski poles. According to the calculation on current operating data, the company has incurred a operating loss of $ 165,000 this year. If any new strategic initiatives are not implemented next year, the unit sales and all costs are expected to rise about 7 percent and 2 percent respectively. However, this situation would make the company incur more loss next year, which is about negative $ 293,586.
Professor P. Savor Intermediate Corporate Finance 3504 Section 002 Case Analysis#1 Alliance Concrete Alliance Concrete is a ready-mix concrete producer who has had tremendous success and revenue growth in its previous years of operation. Potential economic slowdown, overdue capital improvements, and debt repayment obligations pose serious threats to the financial health of this firm. Despite Alliance Concrete’s success and growth the economy in which Alliance Concrete operates may undergo an economic slowdown, which will decrease demand for its services and products. Alliance’s industry costs for materials are steadily increasing by 2.3% and are projected in 2006 to increase on average by 9%. In 2004, delays and stoppages to the firm’s production due to the collapse of equipment cost Alliance $2.6 million in repairs and a two-week shutdown.
How are your suggestion linked to improve customer satisfaction? In business literature, Delta had a primary capability on human relations by paying competitive wages, treating personnel equitably as it grew, and adopting a “no-layoff policy”. Things changed in the 1990’s for Delta though. Key business trends altered the competitive advantage, and the human resource strategy had to change too. After two straight years of financial losses in 1994, CEO Ron Allen rolled out a new strategy called “Leadership 7.5.” Allen targeted to reduce Delta’s cost per each available seat mile from more than 10 cents to 7.5 cents, which would match that of major competitor Southwest Airlines (Bryant, 1997).
This will be useful for Guillermo Furniture because it can help them to determine the possible outcome of the two different decisions they have to make in order to increase their capital and become more of a competitor in the marketplace. One choices that Guillermo Navallez has it to convert his current production model to a high tech solution. Utilizing a computer controlled laser late in order to make precise cuts (Guillermo Furniture, 2012). This will make it so that they can move pieces through assembly quicker. This will be an expensive investment, by utilizing a sensitivity analysis Senor Navallez can determine if it will be a good return on his initial
Stimulation Review Cost cutting measures are the first portion of the simulation. These measures are implemented by a company to improve profitability and reduce expenses. Cost cutting measures may include reducing employee pay, lay off of employees, downsizing to a smaller building, changing hours of service, or changing to a less expensive health insurance employee plan ("Investopedia", 2015). Gilbert Sanchez set a target for cost saving in the amount of 900,000 in the first year. The EHC will receive $2,300,000 from managed care companies and Medicare in three months, but the shortfall at the business must be resolved first.
From October 2000 to June 2002, the industry lost more than 240,000 jobs; plants in border-states accounted for about 76% of these losses. Along with these job losses, Mexican maquilas are being challenged by the rising global competition. The advantages of operating plants in Mexico, such as low wages and tax incentives, are now offered by a great number of developing countries. At the same time, location has become less important as innovations in transportation
Sadly, this company had a lot of factors working against them when the quarter came to an end. The reason that companies budget is to help ensure that money is being spent properly and to help track where future profits and losses may occur. The unexpected decrease in revenue can be factored into many different areas. One main factor of loss is due to the internet being down for 7 days causing the company to potentially have lost 7.7 percent of it’s customers and an estimated $10,00 in profit for this quarter. Factor number two is the company offering free shipping to orders over $100.
California Workers Compensation: Reducing Fraud by Eliminating Existing Moral Hazards (Research Design - Final) By Randall Parker November 18, 2003 PPA501 – Analytical Methods California Workers Compensation: Reducing Fraud by Eliminating Existing Moral Hazards By Randall Parker One of the most contentious expenses faced by businesses in California is increasing Workers’ Compensation premiums. In 1997, national direct and indirect health care expenditures under the system exceeded $1.25 trillion (Melhorn, 2000). New features added to the program in California by Gray Davis will add $10 billion over the next three years to the cost of the system, which employers will have to pick up in added premiums (Can-Do, 2003). While politicians
There are several parallels that lead us to believe that history may be repeating itself. Today’s U.S. economy is producing 2.2% more goods output then before the economic recession started in the late 2000’s, but with 3.8% fewer workers. This can be attributed to our modern day recession stimulating huge productivity and efficiency gains as business let mediocre employees go to save on labor costs. They have learned to do more with less. Unemployment rates were steadily on the rise just a few months ago and corporate profits are at all time highs.