BE274 Managerial Economics Assignment Sample
1.0 Introduction
The initiative is taken by the University of Essex in which the elimination of the surplus use of the trays in the cafeteria will help to reduce the energy cost as well as fulfill the “sustainable sub category”. £40,000 is spent on purchasing the 20,000 trays. This process will help in the minimization of the surplus cost like the cost in cleaning, saving of water as well as the overall energy that consume throughout the procedure and the procedure is done in 2019. It included the failure in which the firm was created to accomplish the objective of the profit maximization and also the control on the social obligation.
2.0 Part 1
| “No of trays” | “Total cost savings” |
| 5,000 | 100,000 |
| 6,000 | 190,000 |
| 7,000 | 270,000 |
| 8,000 | 340, 000 |
| 9,000 | 400,000 |
| 10,000.00 | 450,000.00 |
| 11,000.00 | 490,000.00 |
| 12,000.00 | 520,000.00 |
| 13,000.00 | 540,000.00 |
| 14,000.00 | 550,000.00 |
Table 1: Data from the experiment.
(Source: MS Word)
- The monetary base mainly mentions the currency respect of total amounts. MB circulated the money which was created by consumers in banks. £40,000 is invested by the University for buying trays so the MB of the process is £40,000.
Total cost can be explained as the total cost that is made to achieve the desired goal by the university The TC cost of the process is £3,580,000
MC is known as the marginal cost which refers to the chargers in the cost which creates the total production.
- The “Sustainable sub strategy” is known as SSS which refers to the set of different strategies to obtain corporate actions.
According to the question, MB is not similar to MC. That clearly indicates that university cannot obtain the optimal level.
3.0 Part 2
Q1: Reason
Profit maximization can be known as the important goal of financial management. Earning a large profit is the main goal of every business. The profit maximization has certain limitations. The limitation are
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Eternal sustainable goals
Profit maximization is the necessary goal in financial management but this type of process cannot be implemented in the present practice for the profit in short terms. This has the large potential for the bringing of the extra profit for the long term as well as for the profit in short term which is minimized significantly (Gazijahani, and Salehi, 2018). If any minimization is done on the overall cost then the impact of the process will affect the reputation of the company which the company gain through the longtime of its investment as well as by making the customer satisfied with their products and also by their behavior. Furthermore it is very important to understand the different efforts which have to be created by the company for the profit maximization in the short term to achieve sustainable growth in the long term.
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Product quality
The second important point that is connected with the limitation of the profit maximization is the reduction of the quality of product that is manufactured by the company. For gaining of the higher profit the financial management compromise with the product quality which has the direct impact on the satisfaction of the customer as well as the fame of the company it minimize the customer potential which will be the barriers of the long time benefit of the company (Sathish, 2019). Forcing the worker to work harder without extra pay is also the limitation of the company to gain the sustainable profit maximization. Through the profit maximization is the dream desire of the company but for gaining the dream any kind of compromise is not acceptable from the company which has the impact on the potential of the customer.
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Appropriate training of workers
Unskilled employees or the laborers are also the limitation of the company to profit maximization. For financial management it is very important to recruit the skilled employee so that they can adopt the technology as well as the different terms of the economics. The financial management has to conduct the different skills program training to enhance the skills of the employee in the particular area of the company in which they work. For the best practice to gain the most profit or amplify the profit the company will make the new rules which will harm business ventures, staff as well as the clients.
Q2:
For the enhancement of the company and for the development of benefits of the economy causes the different conditions related to the finance which lead to the “social monetary obligation”. Many individuals thought about the hypothesis of the partners (Terrien, et al.2020). The relationship is maintained by the legislative organization firms, public specialists, the firms, non-legislative organizations as well as the business executives.
Milton Friedman is the American economist who got the “Nobel memorial prize” illustrated about the process of making profit without compromising the morals of business and the legal rules that serve the company to get the concept of social obligation. The economist state “business has only one social responsibility”. The objective that is stated by the economist are
Handling Social Responsibility
The social responsibility comes from that individual who runs the tasks in the organization every day. Demands of different stakeholders, requirements of employees, requirements of vendor regulation as well as the rules for the government, have to be handled by the manager. The company has to take care of their clients as well as the employees and the customers.
Reward for social responsibility
The large number of benefits are there by achieving social responsibility. The benefits are inverse loyalty, more attractive reputation of the company toward the investors, improve inmm retention rate, improved the value as well as the profitability of the company and also the enhancement of the business culture.
Cost
Many companies are using the CSR mechanisms to improve their profit and they are struggling to apply the CSR method. The companies which do not or seldom practice morality are often filling the market specialty.
“Corporate Social Responsibility (CSR)”
CSR is a business model which is self-regulating, significantly serving the company to become accountable to its stakeholders as well as for the general public. Through the practice of the method the company is always aware that the impact of practicing the method has the impact on the social, environmental as well as the economic purpose (Ogura, 2018). Profit maximization is known as a cycle which is created by a firm to obtain growth and they compromise with the various parameters to make a large amount of profit. Production cost, output level as well as the selling price has the direct impact on the financial condition of a company. Many reasons are present for the company to neglect the deserving goals. The parameters that are responsible for not achieving sustainable growth are product quality, training of the workers and sustainable growth for the long term.
4.0 Conclusion
This is the summarization part of the study. MB help-s to calculate the money supply as well as not containing the money which is non-currency. CSR explained the different corporate relation between the employer and employee. The different limitations of achieving profit maximization is also discussed in the study.
Reference
Gazijahani, F.S. and Salehi, J., 2018. Game theory based profit maximization model for microgrid aggregators with presence of EDRP using information gap decision theory. IEEE Systems Journal, 13(2), pp.1767-1775.
Kotlar, J., De Massis, A., Wright, M. and Frattini, F., 2018. Organizational goals: Antecedents, formation processes and implications for firm behavior and performance. International Journal of Management Reviews, 20, pp.S3-S18.
Leal, M., Garcia, A. and Lee, S.H., 2018. The timing of environmental tax policy with a consumer-friendly firm. Hitotsubashi Journal of Economics, pp.25-43.
Ogura, Y., 2018. The objective function of government-controlled banks in a financial crisis. Journal of Banking & Finance, 89, pp.78-93.
Sathish, T., 2019. Profit maximization in reverse logistics based on disassembly scheduling using hybrid bee colony and bat optimization. Transactions of the Canadian Society for Mechanical Engineering, 43(4), pp.551-559.
Terrien, M., Scelles, N., Morrow, S., Maltese, L. and Durand, C., 2017. The win/profit maximization debate: strategic adaptation as the answer?. Sport, Business and Management: An International Journal.
Wang, L., Cai, G., Tsay, A.A. and Vakharia, A.J., 2017. Design of the reverse channel for remanufacturing: must profit‐maximization harm the environment?. Production and Operations Management, 26(8), pp.1585-1603.
ZorBari-Nwitambu, M.B., 2017. Positive word of mouth and profitability: The experience of banks in Port Harcourt-Nigeria. International journal of managerial studies and research, 5(5), pp.42-48.
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