Managerial Economics and Globalization Essay

AbstractThis cover allow describe the details of a delusive business and exit quantify the current environmental skim factors sequence determining the factors that result baffle the superior impact on arrange trading trading movements and anxietys decision to sustain or dis put out trading operations. Thirdly, this paper will evaluate the financial performance of the political party use the information provided in the scenario deal all let on drivers of performance, such as guild profit or blemish for two the short term and persistent term. Also, a recommendation as to how the friendship rear endister make better its positivity and bob up a brief devise to go through the recommendations. Lastly, this paper will assess the spate in which the society should discontinue operations while providing a set of fair(a) rules.1. Briefly describe the details of the fictitious business that you piddled for this assignment.The fictitious business in this ass ignment is named TopShop, which is an American multinational retail merchant with its main(prenominal) headquarters in wise York. It is a last end mode brand that specializes in fashion clothing, shoes, give and accessories. Currently, TopShop has 150 workers for its factory in sweet Jersey, and has hired a consultant to poke out some advice that could facilitate it make a decision as to whether it should shut rout completely or continue operations. In addition, TopShop has deoxycytidine monophosphate workers that produce 6,000 building blocks of proceeds per month (working 20 days / month). The daily profits (per worker) is $70, and the hurt of the secures output is $32. The greet of other variable inputs is $2,000 per day. The firms fixed cost is high replete so that the firms integral cost master its hit r howeverue. The marginal cost of the last building block is $30.2. Assess the current environmental look factors. Determine the factors that will have t he great impact on plant operations and managements decision to continue or discontinue operations.The environmental scan factor refers to the macro environment and is the activity of acquiring information about events and relationships in a companys immaterial environment, the knowledge of which would assist top management in its task charting the companys future course of action. (Aguilar,1967). Comparably, finance, merchandising, and operations will have the greater impact on plant operations and managements decisions in determining if the operation continues its business.First, finance is amenable for acquiring financial resources at favorable prices and allocating those resources throughout the business, as charterably as budgeting, analyzing, investment proposals, and providing funds for operations. Secondly, marketing aims to analyze and touch on consumer demands in the future, wherefore marketing and promoting its products and work. Thirdly, operations be prudent for production of goods and customer services in business. In addition, the production of goods or services supply could modify inputs into outputs (Michaels, 2011). Inputs such as capital, labor, and information are used to create goods or a service. That is why companies sign measurements at various points in the interlingual rendition process and then compares them with previously formal standards to determine whether corrective action is needed.In other words, the three factors finance, marketing and operation can work in the muse and interpretation of the political, economic, social and technological (PEST outline) events and trends which shape a business, an industry or even a total market. In summary, they have the grea demonstrate impact on plant operation and managements decision.3. rate the financial performance of the company using the information provided in the scenario. Consider all the key drivers of performance, such as company profit or acquittance for bo th the short term and long term. Be sure to show the calculations that helped you reach your conclusions.Topshops financial performance is in trouble. A decision was made to hire Mr. Blake lively as a managing consultant to wisecrack suggestions to improve Topshops financial performance. establish on the data given, Blake considered the following key drivers of performance and the financial analysis. The details are following100 employees produce 6,000 units in a month.The price is $32The total revenue per day = 6,000*$32 = $192,000 insouciant salary per employee = $70Total wage in one month = 20days * 100 employees * $70 = $140,000Total variable cost = variable inputs + total wage in one month= $2,000*20days+ $140,000 = $180,000 per month.AVC=TVC/Q=$180,000/6,000=$30 per unitNet income=Total Revenue-TVC=192,000-180,000=$12,000Based on the analysis of data, Topshop could continue its operations in short term because the $32 price is more than AVC $30, and the revenue received per month is $12,000.However, in the long term, Topshop should seriously consider the option of shutting down completely. The main reason being that the firms fixed cost is high enough so that its total costs exceed its total revenue, and the price essential be less than AVC. Under this situation, the firm has no other recourse but to soused its operation.4. Recommend how the company can improve its profitability. Then, develop a brief plan to implement the recommendations.E very(prenominal) business can improve its profitability by aiming to cast up profitability, reduce costs, consider the price, and expand the market. vitiate more effectivelyOne of the close obvious routes to increasing the profitability is to corrupt more effectively. It makes sense to review a supplier base regularly and to determine if a firm can steal the same bare-ass materials more cheaply or efficiently. However, it must be ensured that the cheaper raw materials will not reduce fiber of product and se rvice (He, et al., 2007).Manage your costsClose management of the costs can drive firms profitability. approximately businesses are capable of fining some forms of barbaric to reduce, however it is important to be aware and not cut costs at the expense of the quality of products and services.Pricing considerationsIt is a good idea to regularly check the pricing. Changes in the marketplace may help increase the price without risking sales. However, it is essential to test any price increases before they are made permanent.Expand your market despicable into new market areas can transform a business and if handled correctly, can importantly increase the profitability. However, bear in caput that developing new products and services and selling in new markets can be risky and mistakes can prove very costly.5. Assess the circumstances in which the company should discontinue operations. Provide a rationale with your response.To qualify for presentation as a discontinued operation, a ll of the following conditions must be met1. The operations and cash flows of the percentage have been or will be eliminated from the ongoing operations of the entity as a result of the disposal action and2. The entity will not have any satisfying continuing involvement in the operations of the component after the disposal transaction3. A description of the facts and circumstances leading(p) to the expected disposal, the expected manner and time of the disposal and the carrying gists of the major classes of assets and liabilities included as part of the disposal group (if not reflected separately on the face of the statement).4. The collect or loss recognized and, if not separately presented on the income statement, the caption in that statement in which the gain is included.5. If applicable, the amount of revenue and pretax profit or loss reported in discontinued operations.6. If applicable, the department in which the long-lived asset or disposal group is reported.Referenc esAguilar, F. J. (1967). Scanning the tune Environment. New York, NY McMillan.Michaels, R. J. (2011). Transactions and Strategies. 1st Edition. Mason, OH Cengage Learning.He, Y. Q., Chan, L. K. & group A Wu, M. L. (2007). 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