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Contrast qualitative, historical projection, and causal forecasting models. What are the strengths and weaknesses of each of these models Answer

Contrast qualitative, historical projection, and causal forecasting models. What are the strengths and weaknesses of each of these models?

Three demand forecasting models are qualitative, historical projection methods and causal methods. In the qualitative methods, experts use judgment, prior experiences, surveys, or comparative techniques to provide quantitative estimates about the future. A team of experts provide insights about the forecast or some predictive analysis of the demand forecast. This method is usually adopted when there is not much past data available for the demand. When historical data is available, and the trend and seasonable variations are stable and well defined, then we go for historical projection methods. The basic premise is that the future time pattern will be a replication of the past. The quantitative nature of the historical projection methods encourages the use of statistical models. These models work because of the inherent stability of the historical projection methods in the short run. Cause-and-effect is based on the principle that there are one or more factors are related to demand and that the relationship between cause and effect can be used to estimate future demand. Examples of cause-and-effect forecasting include simple and multiple regressions. In simple regression, demand is dependent on only one variable, whereas in multiple regressions, demand is dependent on two or more variables. Judgmental methods can be sometimes preferred over other techniques as it has an ability to incorporate unusual events, and if there is difficulty of obtaining the data necessary for quantitative techniques.

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Why should the government intervene in situations of market failure? Include your example enough economic analysis Answer

Why should the government intervene in situations of market failure? Include your example enough economic analysis and tools that the course content is reflected. This is an opportunity for you to “bridge” the material on regulation with aspects of market failure and with what we have been reading about corporate social responsibility. Please do not include “macroeconomic” based answers as this has not been part of the course content. Also please include an example. Again the expectation is that you will include thoughts about market failure, regulation, and corporate social responsibility within the context of an example you create and document.

Answer – According to Friedman, the important responsibility of a businessman is to earn as much profits as he can by conforming to their basic rules of the society, both those embodied in law and those embodies in ethical custom. For example, the manager of a corporation such as hospitals or schools may not earn much profits from their operations as their focus is on providing services to the society. In fact, the manager who owns the corporations have the clear criterion of performance where voluntary contractual arrangement exists. Over the centuries, it has been debated by many economists and politicians that whether the government should intervene in the workings of the private companies in the economy in order to regulate them with more efficiency. In real world market situations, it has been impossible for the private business to function smoothly. For example, it is mandatory to maintain sovereign in the economy to create a strong military in the country which can only be done by the state. Moreover, government also plays role in setting the minimum wages and price in the market on the basis of the supply and demand situations in the market. It has been done in order to avoid the market failure in the society and to make them function smooth. In April 2012, the “Rebuild America Act” was introduced by Sen, Tom Harkin as an extended help to the American manufacturers and also to help the young Americans to get more education. It basically provides financial help and the tools to rebuild more and more bridges, roads, schools and job training facilities and more such opportunities and protect many U.S companies from other predatory and monopolistic trade practices. Hence, we can understand the importance of government intervention here in the private economy in order to make them stronger by regulating and introducing more rules. The businessman has other corporate social responsibilities as well apart from just raising their profits. Otherwise, it would become difficult for him to survive in the society in the long run. Government always keeps an eye on the operations of the business and their socially optimum output and keeps on regulating the market by introducing several acts so that market does not fail. (Friedman, September 13, 1970 )

Government also provides health insurance benefits to the society which is necessary to create a healthy background of the people in the economy. In this way, government not only forces business enterprises to perform their social responsibility but it also performs and provide several services to the society. In case of market failure situations such as monopoly power, externalities, public goods, etc. the government interferes and make changes in the workings of the market so that the market does not fail. In order to avoid monopolistic situation government has created several regulatory bodies such as OFGEM, OFWAT and ORR. They regulate the workings of the gas and electricity markets, tap water and railways. Taxes such as Pigouvian Tax have been imposed in the case of negative externalities so that businesses concentrate more on the socially optimum output.(Assaf, 2011)

 

 

References

Assaf, D. (2011). GOVERNMENT INTERVENTIONIN INFORMATION INFRASTRUCTUREPROTECTION. CRITICAL INFRASTRUCTURE PROTECTION, 1-15.

Friedman, M. (September 13, 1970 ). The Social Responsibility of Business is to Increase its Profits. New York: The New York Times Magazine .

 

 

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You have been assigned to do a make-or-buy analysis. What factors will you likely include in your make-or-buy evaluation Answer

You have been assigned to do a make-or-buy analysis. What factors will you likely include in your make-or-buy evaluation? (Points : 20)

The make-or-buy decision requires consideration of many factors. Factors that influence the make-or-buy decision include both quantitative factors such as cost and time and qualitative factors such as the suppliers’ trustworthiness and the quality of their products. This includes all relevant factors that cannot be reduced to numbers, such as the experience of the business’ production department and the quality of its management. For example, it might be possible that the business has no experience in producing a particular product and its prior experience in producing other products cannot be applied. The decision to buy creates a project that will be implemented in cooperation with an outside organization that is not entirely within the buyer’s control. An element of uncertainty and risk gets introduced for the buyer if it wants to outsource the project.

The contract binds buyer and seller to one another but does not place one under the other’s managerial control. Sometimes the seller’s economic position may be so powerful, however, that the terms and conditions of the contract are ineffective in protecting the interests of the buyer.

The seller may find that the buyer has specified its needs inadequately or defectively; the seller’s marketing department has oversold its products, services, or capabilities or some faulty communication has transpired between the two parties during contract formation. In any of these cases, performance may be much more demanding than originally contemplated and may even be beyond the seller’s capabilities. Communication breakdowns, misunderstandings, conflicts, and disputes can occur between organizations. Although the contract is intended to provide a remedy to the injured party if the other fails to fulfill its contractual obligations, it is not a guarantee. Legal remedies may be uncertain and, even if attained, may not fully compensate the injured party for the other party’s failure.

The make-or-buy decision can be a critical one for any organization.

References: Garrett, G.A. (2010). World Class Contracting. 5th Edition. CCH Incorporated. pp 24

http://smallbusiness.chron.com/to-qualitative-measures-makeorbuy-decisions-35918.html

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Gather three of your favorite packaged foods; perhaps one from each: breakfast, lunch and dinner Answer

Are You Sure It’s Fat Free?” “The reason that a 97% fat free food is too good to be true is that the food industry bases its figure on the weight of the product and not the calories the product contains (Bluman, 2005)”. In this exercise we will discover if the foods we eat really are fat free. I will be using Oatmeal for breakfast, Spaghetti and Meatball for lunch and Chow Mein Noodles for dinner.

Problem: Gather three of your favorite packaged foods; perhaps one from each: breakfast, lunch and dinner. Use the model explained in the “Are You Sure It’s Fat Free?” to analyze, through the mathematical formula explained the fat content and protein content from your foods. To analyze the protein content use 4 calories per gram of protein, rather than the 9 calories for grams of fat.

In the text of “mathematics in our world” on page 236, it sparks the interest of readers because it challenges the question “is it really fat free?” It goes on to give an example of a can meat that states that is 97% fat free.   The text used the value of the total volume of the item, calories per serving, grams of fat per serving and a multiplier of 100%. The total volume was 10 ounces; the text then converted ounces to grams. 1 ounce is equal to 29 grams; making 10×29= 290 grams. Then the book divided 290 by the 9 grams of fat and then multiplied the answer by 100%

9/290 x 100% = 3.1%

Once the 3.1% is subtracted by 100% it shows that the content of the canned product is 97% fat free according to the manufactures’ mathematics. The text then goes on to state the real math behind it. Each gram of fat was converted into calorie, for one gram of fat it equals 9 calories. 9 grams of fat x 9 calories each equals 81 calories. 81 were then divided by the number of calories on the label 240. 81/240 was multiplied by 100%= 33.75%

81/240 x 100=33.75

This suggests that the 10oz can is 66.25% fat free as oppose to 97% as the label claims.

I found this to be misleading in an away. The manufactures’ are making claim in regards to actual grams of fat, not calories from fat so the above calculations are not proving anything but calories, calories where not in question; grams of fat are.

I followed up with a few items in my household to further examine the actual calories from fat per serving. In my family we do not purchase our groceries based on how “fat free” it is. So these are a few “non-reduced” items.

The first up was a can of Campbell’s soup.

200 calories per 8oz serving

10g of fat

So the first step is to convert ounces to grams 8 x 29=232grams. Next divide the grams of fat per serving by the grams per serving. 10/232 and multiply by 100%

10/232 x 100%= 4.3%; the can has no claim to be any percentage of fat free however 95.7% doesn’t seem too bad if you ask me.

Now to prove how many calories come from fat; the first step is to convert grams of fat into calories. As stated above each gram of fat equals 9 calories. So per serving of soup 10 x 9= 90 calories. 90 calories divided by calories per serving 90/ 200 x 100%=45%. Based on this math, almost half of the calories in a serving of soup are from fat! But again the soup company made no claim on how “fat free” their product really was.

And for protein

8 x 4= 32

32/232 x 100%= 13.8%;

The next product was egg nog, a beverage made for the holidays.

Each serving is 4oz or 116 grams.

Each serving has 8 grams of fat and 170 calories.

Manufactures’ math:

8/116 x 100%= 6.8%

Calories from fat math:

8 x 9=72

72/170 x 100%= 42.3%

Protein

8 x 4=32

32/170 x 100%= 18.8%

Lastly I came across a lean cuisine in my freezer.

Each serving is 8 oz. or 227 grams according to the packaging.

270 calories and

7 grams of fat

Manufactures’ math:

7/227 x 100%= 3.1%, not too bad.

Calories from fat math:

7 x 9= 28 fat calories

28/270 x 100%= 23.3%

Protein

7 x 4= 63 fat calories

63/270 x 100%= 10.4%

After doing a few of these examples I came across a couple of formulas to somewhat simplify how to deduce these values.

For the manufactures’ math, if;

x= calories

y= grams of fat

z= ounces of product.

z x 29= ounces to grams= Zg

Y/Zg x 100%= Factory %

For fat from calories math, if:

1gram of fat = 9 calories

x= calories

y= grams of fat

z= ounces of product.

y x 9= calories from fat= Ycal

Ycal/X x 100%= actual calories from fat

I personally do not believe too many things are fat free only because almost everything has some amount of fat in it. This assignment was helpful in a way where I am more apt to do the math for myself using above formulas to see if what I am reading on the labels are close to claim.

 

Reference

Bluman, A.G. (2005) Mathematics In Our World. 1st Ed. Ashford University Custom.

United States: McGraw Hill.

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Below is shown the weekly output of a fabrication process and data for labor and material inputs Answer

Below is shown the weekly output of a fabrication process and data for labor and material inputs. Note the following:   – Standard selling price is $125 per unit.  – Overhead is charged weekly at the rate of $1,500 plus .5 times direct labor cost.  – Hourly wage is $16 in a 40-hour week. – Material cost is $10 per foot.

Week Output # Workers Material (ft)
1 392 5 2790
2 408 6 2790

What is the average multifactor productivity?

Ans: Multifactor productivity Indicates the ratio of many or all resources (inputs) to the goods and services produced (outputs).

Multifactor productivity for week 1

Labor Cost = 16 * 40 *5 = $ 3200

Material Cost = 2790 * 10 = $ 27900

Overhead Cost = 1500 + 0.5 *3200 = 1500 + 1600 = $3100

=   392 / ( 3200 + 27900 + 3100) = 392/34200 = 0.01146 units output per dollar Cost

 

Multifactor productivity for week 12

Labor Cost = 16 * 40 *6 = $ 3840

Material Cost = 2790 * 10 = $ 27900

Overhead Cost = 1500 + 0.5 *3840 = 1500 + 1920 = $3420

=   408 / ( 3840 + 27900 + 3420) = 408 / 35160 = 0.01160 units output per dollar Cost

 

average multifactor productivity = (0.01146 + 0.01160)/ 2 = 0.01153 units output per dollar Cost

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What are some of the major provisions of the Telecommunications Act of 1996? What was the fundamental goal and purpose of the provisions in the Act Answer

What are some of the major provisions of the Telecommunications Act of 1996? What was the fundamental goal and purpose of the provisions in the Act? 

The major provision of the Telecommunications Act of 1996 was to open the market to allow competition to enter in. Also, mandate Interconnection of networks and to achieve “universal service” to offer local basic service to as many people as possible. They were trying to deregulate the industry in telephone service, telecommunications equipment manufacturing, cable television, radio and  television broadcasting. This was major restructuring of the industry. They were trying to update communication laws and stimulate competition.

The main provision of the telecommunication Act 1996 was competition, efficiency, and explicit mechanisms to further universal services. This was to be achieved through the removal of barriers that formerly restricted which lines of business competitors could enter and also it imposes statutory “obligations” and empowers the Federal communication commission to implement these provisions.

The act has failed to achieve its intended purpose reason being the implementation has been placed in the hands of regulators with the incentive to pursue the illusion of competition rather than reality of competition. Take for example currently we have only two giant phone companies that is AT&T and Verizon, which i think the act did less to improve the situation in the industry.