- •Череповецкий государственный университет
- •Кафедра экономики
- •Современный бизнес
- •Contents
- •Введение
- •Unit 1. The effects of demand and supply on business
- •1.1. Markets
- •Test Questions
- •Case study ‘Understanding the Market’
- •1.2. The Operation of Markets
- •If social costs exceed social benefits, the decision to produce a good or service makes society worse off even if the producers make a profit.
- •If social costs are less than social benefits, the decision to produce a good or service will make society better off. Test Questions
- •Case study ‘Record Industry’
- •1.3. The Effects of Government Policy on Markets
- •Indirect taxes
- •Test Questions
- •Unit 2. The competitiveness of a firm
- •2.1. The Performance of an Industry
- •International Trade
- •International comparisons
- •2.2. Government Action to Improve Competitiveness
- •2.3. Government Action and International Trade
- •2.4. Business Competitive Strategies
- •Test questions
- •Case Study
- •Unit 3. Business Organisations
- •3.1. Types of Business Organization
- •3.2. Organizational Structures
- •3.3. Factors Influencing the Organisational Structure
- •Internal factors
- •Test Questions
- •Case Study ‘Business Organisation & Structure’
- •Unit 4. Administrative systems
- •4.1. The Purpose of Administrative System
- •4.2. Administration Functions in Business
- •4.3. Evaluating Administrative Systems
- •4.4. Information Technology in Administration
- •Test Questions
- •Case Study ‘Satellite Supplies’
- •Unit 5. Communications Systems
- •5.1. Why Do Businesses Need Communications System?
- •5.2. The Objectives of Communication
- •5.3. Verbal Communication
- •Internal communications
- •5.5. Evaluating Communication Systems in Business
- •Test Questions
- •Case Study ‘Can You Communicate?’
- •Unit 6. Information Processing
- •6.1. The Purposes of Information Processing
- •6.2. Types of Information Processing Systems
- •Information Technology: positive and negative effects
- •6.3. Evaluating Information Processing Systems
- •Test Questions
- •Case Study “Information Technologies in Business”
- •Unit 7. The principles and functions of marketing
- •7.1. What is Marketing?
- •7.2. The Objectives of Marketing
- •7.3. Implementing the Marketing Mix
- •Test Questions
- •Unit 8. Market Research
- •8.1. What is Market Research?
- •8.2. Sources of Marketing Information
- •Information requirements
- •Internal sources
- •8.3. Primary Research
- •8.4. Market Changes
- •Information on sales
- •Test Questions
- •Case Study ‘Sun Rush’
- •4M Brits shrug off gloom in sun rush
- •Unit 9. Marketing Communications
- •9.1. Targeting an Audience
- •9.2. How to Reach a Target Audience
- •9.3. Product Performance
- •9.4. Guidelines and Controls on Marketing Communications
- •Test Questions
- •Case Study ‘Marketing Communication’
- •Unit 10. Customer Service and Sales Methods
- •10.1. ‘The Customer Is Always Right’
- •10.2. Placing the Product – Distribution
- •Indirect distribution via intermediaries
- •10.3. Closing the Sale
- •Test Questions
- •Case Study ‘Company Handbook’
- •Unit 11. Production
- •11.1. What is Production?
- •11.2. Just in Time Production and Total Quality Management
- •11.3. Improving the Productivity of Labour
- •11.4. Health and Safety at Work
- •11.5. Reducing Pollution from Production
- •In the working environment
- •In the natural environment
- •Test Questions
- •Case Study ‘Production and Productivity Consulting’
- •11.6. The Costs of Production
- •Identifying business costs
- •Indirect costs
- •Insurance
- •Variable costs
- •Test Questions
- •Case study ‘Waterhouse Waffles’
- •Unit 12. Pricing decisions and strategies
- •12.1. The Pricing Decision
- •12.2. Cost-Based Pricing
- •12.3. Market-Based Pricing
- •12.4. Competition-Based Pricing
- •12.5. Problems with Demand- and Competition-Based Pricing
- •Test Questions
- •Case Study ‘What Price Promotion?’
- •Unit 13. Monitoring business performance
- •13.1. Accounting for Business Control
- •13.2. Budgetary Control
- •Variance analysis
- •13.3. Ratio analysis
- •Test Questions
- •Case Study ‘Business Performance’
- •Unit 14. Preparing a business plan
- •14.1. What Is a Business Plan?
- •14.2. The Purposes of a Business Plan
- •14.3. Legal and Insurance Implications
- •Insurance
- •14.4. Business Resources
- •14.5. Potential Support for a Business Plan
- •Some review questions
- •Unit 15. Producing a Business Plan
- •15.1. Business Objectives and Timescales
- •15.2. The Marketing Plan
- •15.3. The Production Plan
- •15.4. The Financial Plan
- •15.5. Conclusion
- •Some Review Questions
- •Case Study ‘Business Plan’
Case Study ‘Production and Productivity Consulting’
Tasks:
Imagine you are a management consultant and have just been contracted by two organisations to investigate production and productivity in the workplace. Based on your findings from site visits, staff interviews, annual reports, and other information sources, produce a report for each organisation on the following:
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How and why each organisation adds value
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How production has been affected by market conditions, resource cost and availability, technological change, labour flexibility, and legislation
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How levels of labour and capital employment have changed over time
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How changes in production have affected and been affected by investment in research and development and new technology
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Productivity and how it has changed over time (consider output levels, input-to-output ratios, and unit costs)
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Why each organisation wishes to improve productivity
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A critical evaluation of the success or failure of any measures undertaken in the past to improve production
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Discussion of how these measures may have altered relationships with suppliers and customers
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The scope for further improvements in production. Make recommendations for possible strategies. What are the potential costs and benefits of these strategies to the firms and their workers?
Discuss the draft report with the owners or managers of each organisation and make changes to the text of your report if necessary.
Make a presentation (10-15 minutes) of your report findings to the owners or directors. Use overhead projector slides summarising the main findings and a selection of tables or graphs to illustrate the main points raised.
11.6. The Costs of Production
Key words: direct costs, depreciation, indirect costs, overheads, fixed costs, variable costs, cost unit, marginal cost, under-recovery, average cost.
Identifying business costs
In most cases, running a business is all about making decisions on how best to use scarce resources in order to make a profit, where:
Profit = Sales Revenues – Costs
Every business decision, whether to launch a new product, change advertising methods, or to expand production, has cost implications. Because the primary purpose of most private-sector firms is to make a profit, it is essential that businesses are able to keep a tight control on their costs. Cost control is equally important to public-sector organisations and charities who do not seek to make a profit, but will nonetheless want to minimise the cost of their operations.
In order to control costs, it is first necessary to be able to identify business costs, calculate how much these costs are, and then to set targets for future cost levels.
Classifying costs
There are two main ways in which costs can be classified and calculated in order to assist managers in planning and controlling the operation of their business:
Direct and indirect costs are definitions used for accounting purposes to calculate the level of profit before tax for a particular good or service
Fixed and variable costs are classified according to how they vary as the level of output of a good or service is varied.
Direct costs
Costs which can be directly identified with a particular product or activity are known as direct costs or prime costs. These will include:
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Direct materials: the raw, or semi-finished materials used to make a product
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Direct labour: the wages of employees directly involved in making or assembling a product
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Direct design costs: costs incurred at the product planning stage
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Other direct costs: including the costs of power used in production, hire charges for machinery specifically employed in the production process, and the costs of any work subcontracted to other businesses
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Depreciation: an allowance made to cover a fall in the value of fixed assets, such as machinery, vehicles, computers, etc., due to wear and tear.
Each year a business must work out how much depreciation to allow for each fixed asset. That is, it must put aside a certain amount of money each year so that, when the asset wears out, it will have saved up enough to buy a replacement.
There are two main methods used by businesses to work out depreciation. These are:
The straight line method: this divides the cost of the asset by the number of years it is expected to remain in service. For example, if a machine costs 1,000 pounds and is expected to last 5 years, then the value of that machine will depreciate by 200 pounds each year.
The reducing balance method: this assumes that the depreciation charge in the earlier stage of the expected life of an asset will be greater than in later years. The value of the asset is therefore depreciated by a constant percentage each year. For example, if the value of the 1,000-pound machine is depreciated over 5 years at 25% each year, then the depreciation charge in the first year will be 250 pounds, in the second year 187.50 (i.e. 25% of 750), in the third 140.60 – and so on, until all that remains after 5 years is the expected scrap value of the asset.