Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
" (Kee, 2001, p. 139)
To further this discussion of short- and long-term production and cost one must at least briefly understand the just-in-time model. This model was developed by the Toyota Motor Corporation to mirror the ability of certain suppliers to provide just the amount of a product that a market demanded at the time it was demanded. To apply this model to manufacturing one must have a careful set up for short- and long-term goals of production, and potentially this model can effect short run production and be ignored by cost cutting that attempts to buy raw materials in bulk to meet the demand of a bottleneck in the early life of a product. (Ohno, 1988, pp.26-33) Just-in-time has become a goal of many in manufacturing, as they seek to carefully organize short-term and long-term production and cost issues. In the short-term, procurement is lower and waste is less, and in the long-term the firm is not left with surplus with regards to either raw materials or unwanted or slow selling finished products.
Short-term goals of production and cost often revolve around the idea that the most important job of the manufacturing team revolves around how to procure the most raw materials at the lowest price and how to effectively cut costs of production of a product while retaining or even raising its market price. Long-term goals on the other hand have to do with assessing the quality of a product and attempting to prevent product failure in the future, so as to reduce long-term loss from attrition and/or in the worst case scenario recalls. ("Value, in Economics," 2004) Both sort and long-term decisions and plans must be...
(Hegji, 2001, p. 17)
Short-term production and cost goals, revolve around the attempt to most immediately recuperate the cost of research and development as well as the cost of bringing a product to full production. These costs include both fixed and variable costs, where variable costs are sought at lower rates and fixed costs are fixed. Short-term production and cost may be influenced heavily by attempting to bottleneck the market while long-term production and cost models attempt to sustain the longevity of demand through the application of investment in resources that best meet quality assurance to reduce attrition and returns. In long-term production cost scenarios the firm is attempting to re-contract and lower fixed as well as variable costs and may also pay much more attention to preventative application and reduction of labor costs through automation and speed of set up and production.
References
Dorf R. C and Kusiak, a. (1994) Handbook of Design, Manufacturing and Automation. New York: Wiley-IEEE.
Value, in Economics. (2004). In the Columbia Encyclopedia (6th ed.). New York: Columbia University Press.
Hegji, C.E. (2001). Fixed Cost, Marginal Cost and Market Structure. Quarterly Journal of Business and Economics, 40(1), 17.
Kee, R.C. (2001). Evaluating the Economics of Short- and Long-Run Production-Related Decisions [*]. Journal of Managerial Issues, 13(2), 139.
Economics The production possibilities curve represents the maximum level at which a country can produce. Freer trade, such as what the EU has promoted since its inception, allows countries to do two things. The first is that it allows them to produce at their production possibilities curve. This occurs because the country under free trade conditions is going to produce those goods in which it has a comparative advantage. This improves
Economics Discussions Production Costs Postal Service (USPS) operates at a loss but its closest competitors -- UPS and FedEx -- both operate at a profit. Suggest how fixed costs have contributed to the situation of the USPS. Provide support for your response. I would suspect that the fixed costs of contributing to employee's retirement funds (Risk Analysis Research Center, 2009, p. 4) and also their restriction from closing local offices (Slentz and McCann,
economic costs are different from accounting costs and why a firm might still operate even when there is a loss. The best way to describe the differnce between economic costs and accounting costs is to break down the economic costs into explicit and implicit costs. 'Explicit costs" are all of those circumstances that require specific outlay of money such as paying employees, paying rent and utility bills. "Implicit costs" on the
Agricultural Assessment Economics of Production and Resource Management: Assessment of the Environmental Impact Associated with Human Waste Fertilizer in Agricultural Production The objective of this study is to conduct an assessment of the environmental impact associated with human waste fertilizer in agricultural production. National Geographic News reporter Tasha Eichenseher reported that 200 million farmers in developing countries are making use of raw sewage due to water shortages and rising costs of fertilizer
Microeconomics Economic costs are both the direct costs and the opportunity costs of a decision. There are a number of types of costs that are discussed in economics disciplines. These can be direct and indirect costs, but more common costs are things like marginal costs. These are the added cost associated with an increase in output. Microeconomics often focuses on things like marginal cost, and uses the economic cost concept to
Health Care Economics In economics, cost-benefit analysis assists in evaluating the costs of an approach in terms of resources spent while cost-effective analysis evaluates the costs as achieving some sort of benefit which is not evaluated in monetary terms. Moreover, cost-benefit study examines several aspects including net-present value, present value of benefit, and present value of costs; in line with this, if a project indicates that the monetary outcome is greater