Operations Decision Essay

1163 WordsAug 5, 20125 Pages
Quantum Technologies is a company located in Northern Virgina. The company is a producer of IT networking products that are sold to retail stores across America. One of the several products they manufacture, it’s the G wireless router Model QT5485X. The company has a facility located in Sterling, VA with 100 workers working 20 days/month. The factory produces 6000 units per month and the price of the output is $ 32. • CURRENT FINANCIAL PERFORMANCE OF THE PLANT: Cost of variable inputs = $ 2000/day. Daily wage per worker is $ 70. Variable Cost (VC) = 100 workers x 20 days/month x $ 70 = $ 140,000 Cost of Variable Inputs: $ 2000 x 20/days = $ 40,000 Total Variable Cost = $ 180,000 Total Revenue (TR) = 6000 units x $ 32 = $ 192,0000/month – $180,000 = $ 12,000 • CURRENT ENVIRONMENTAL SCAN FACTORS: Assuming we are in a perfect competition market, the following conditions are satisfied: “Firms produce identical commodities sold to consumers who are identical from the point of view of producers. Both producers and consumers are numerous and sales or purchases are small relative to total volume of sales or purchases consumers and producers possess perfect knowledge; and, entry and exit is free for consumers and producers in the long-run. For the producer, perfect competition means, in the short-run, that price is equal to marginal cost and equal to marginal revenue. In the long-run, price is also equal to average cost. The industry, i.e. all producers taken together, faces a negatively sloped demand curve but the individual producer faces a horizontal demand curve, i.e. the firm is a strict ‘price-taker’. It can sell as much as it likes at the market price. “ (Perfect and Imperfect Competition. (2008, November 01). In ProQuest Editorial Website G. Retrieved from http://elibrary.bigchalk.com) • HOW THE COMPANY CAN IMPROVE

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