Posts

Showing posts from January, 2021

Maximizing Profits and Maximum Profits - Profit Maximization Theory

Image
  Profit maximization theory is generally regarded as one of the most important concepts in management theory. It is a theory that has been developed by numerous researchers over the decades. The concept focuses on analyzing the process by which value is created and determined and then realizing the resulting value. This theory also focuses on the nature of the process itself and how it impacts the organization's internal processes and framework. Profit maximization is essentially the main objective and the first principle of financial management. It implies that each decision related to company operation is analyzed in the light of anticipated future profits. All the relevant decisions with regards to making new investments, acquisition of productive assets, expansion of existing ones etc are all studied in relation to their potential effect on future profits and hence profitability. The focus of the theory is therefore not only on the dimension of profit but also on the dimension

Understanding the Interdependence of MRTs

Image
  Mrts are a great way to leverage existing resources in your portfolio without having to add them to your portfolio all at once. Instead, you can spread your risk by adding just the right mix of instruments and portfolio holdings. A well-diversified portfolio is a powerful hedge against risk because it reduces the potential for negative returns by spreading your risks over a larger geographic area or industry. In microeconomics theory, the marginal return of technological substitution, also known as technical progress in the economy, is the amount by which an additional unit of any input is needed to raise the output level of another unit. This theory is usually illustrated in the classroom through a case study involving Mrts . In your investment portfolio, if one investment is made based on the theory of marginal returns, then any additional units added to the portfolio must be offset against the initial investment. If you have several are of varying sizes, then adding them all to yo

Concept of Determine How Much of Household Investment Is Consumed

Image
The theory of diminishing marginal rate of substitution relates to the pricing of marginal goods. The concept is well illustrated in the following figure. In this figure, the blue curve depicts the theoretical price of a good, and the yellow curve depicts the real value of the good purchased by a customer. the diminishing marginal rate of substitution Let us take a closer look at the second factor that enhances the usefulness of the concept of diminishing marginal rate of substitution. This factor is called implicit differentiation. According to the implicit differentiation, when a buyer of a good decreases his demand for a good, he shifts the location of his equilibrium point to a lower good. The reason for this is that in order to attain his equilibrium point, a buyer substitutes a good with some other good, which costs more than the good he first selected. The location of the equilibrium point is hence shifted from A to B according to the demand of the buyer. According to the Cobb-D

Maximizing Value Creation Through Maximizing Return on Investment (ROI)

Image
  In economics, the marginal rate of substitution defines the rate at which consumers switching from one form of investment to another change their consumption from one form to another without changing their total income. The concept of marginal utility is well illustrated in simple terms by the following example. Assume that Bob wants to buy some milk. He saves $4.00 and visits the milk shop the next day to purchase some milk. Assuming that all purchases are made at the prevailing price level and that no other changes, such as Bob buying food or fuel, take place, then, based on the assumption that, after taking his new milk purchase, he will consume the amount he saved, and since he has changed from purchasing food to selling fuel, his income will rise. The marginal rate of substitution could also be called the substitution value of income, since it is equal to the lowest common divisor of the quantity of time that it would take to substitute one commodity for another. The present-da

Three Major Rules in mpls Formula

 MPL formula, also known as a microplasticity factor or physioplasticity is a biotechnological process in which a drug is formulated to improve the cell permeability and increase cell mobility. In this way, a certain cell type may be targeted specifically for some other. The major focus of this process is to facilitate the development of drugs that can specifically target the liver or any other organ. This means that the target organ will be much healthier than the rest. This is the basic idea behind the MPL formula . An example of the MPL formula is Glucophage, which was developed to fight leukaemia and enteric-coated polypeptides in order to kill the leukaemia cells. This was the first major achievement in the field of biomedical engineering. This well-formed molecule has no cross-reactivity with other molecules and is a unique class of molecule that can only be produced under very specific conditions. For this reason, it was very difficult to make and its manufacturing process was v

Flipkart and Myntra Merger Case Study

This is an interesting case study, Flipkart and Myntra merger case study. Just so we are clear, this case study is not about a specific product, but the concept of the case study. You will learn about this case study from the very beginning. What makes this case study intriguing is the integration of economics with business. You will find this to be a very interesting read. Let us start with the Introduction. The author has combined her three years of experience as an entrepreneur with her twenty-six years of studying business at the MBA University of Indiana. She has combined her knowledge with her passion for helping other entrepreneurs succeed. As a result, she has produced a case study on this concept. This case study is called, " Flipkart and Myntra Merger Case Study ." The reason for using this case study is that it is written for the first time, and she wanted to make it as comprehensive as possible. There were many things she had to write down, and she included a lot

How to Find Win-Win Solutions

  Win-win situations are often the best way to resolve conflicts and problems. And when you win, both of you win, rather than one wining and one loss, which would be more unfortunate. Unfortunately, we can't all easily win every time, but there is a way to make the game more even, and that is to use the "win-win" strategy. The more evenly matched your goals and plans are, the more likely they are to work out. Here are some of the best ways to do just that. One great win-win solution involves using assertiveness in your interactions with people. When you know how to communicate assertively and yet still have a positive attitude, it's very powerful to others. You may find that you are more persuasive and effective in your communications when you are assertive, but you also end up being more patient and understanding. If you find that this works well for you, look into assertiveness tactics report. Another win-win solution involves learning how to manage conflict. Often

Win-Win Negotiating Strategy For Sales

  In team building, it's important to have a win-win strategy. This is because the goal of most team building activities is to create a better work culture, increase productivity, and enhance employee relations. When it comes to conflicts, a win-win strategy is often the key to resolving them. As a matter of fact, this was recently mentioned by a group of Michigan State University students who were involved in a study on conflict resolution. In their paper, they suggest using the "endorsement strategy" as a means of conflict resolution. Basically, the win-win strategy involves two separate strategies: one is for the individual negotiators to make initial offers to their counterparts; the second is for the negotiators to make counteroffers to their counterparts on their initial offers. In order to make initial offers, the individual negotiators should consider how the proposals were received by the other party. Then, they should look at the counteroffers to see what needs

Benefits of hierarchical vs. Unpooled Pooled Ols Regression

  A hierarchical database management system is a relational data management model, where the data are arranged into a hierarchy. The data are stored in a tree-like structure, with each object being associated with a parent and children. A record is simply a collection of values, with each value being associated with a parent. There are some differences between the two models; for instance, in a hierarchical model, the order of the keys or values will be determined by the type of the key or value. Also, in the case of multiple databases, one would require the other. In most of the cases, the hierarchy will be determined from the primary entity, which could be a person, an organization or a company. In most of the cases, the hierarchy will be consistent throughout the database and will be completely dynamic. In a hierarchical model , there are several relationships that exist among the entities, such as one parent record could have many descendants or links to other parent records. This

Product Mix - Maximizing Company Profits

  In product development parlance, the product mix is providing several similar products for sale together. Unlike product bundling where several similar products are grouped into one collection, which is then sold as single units, product mixing involves selling the products as distinct units. This enables the customers to buy them in bulk without much difficulty. Thus, you can expect to get returns on your investments faster and there will be a definite increase in the product's profitability. It is important to understand how product mix decisions help the business. The best way to understand the importance of this aspect of product development is to look at it from the point of view of the customers. When customers can buy products from different shelves in different stores, there are greater chances that they will buy a product from your company than from another. Thus, the product mix decisions help the business to increase its customer base. To make things clear, here are s

Creating a Varying Product Mix Example Using 3 Depth and Width

  Product Mix is the assortment of products that a certain business or Product line contains. For instance: If you're talking about Classic Coke, then you're talking about one brand of product. However, if you're talking about a lunch-time snack, you'll be talking more about the various brands, flavours and sizes of popcorn that are available. The most important part of creating any consistent product mix example is product depth. Product depth is the idea that you will create and maintain an enjoyable experience for your customers. How does this differ from "uniqueness"? Well, uniqueness requires a higher level of consistent news because uniqueness demands that you create something different - and sometimes difficult to produce. Unique products require research and development. They take time to create and often result in a product mix example that is very boring and one-dimensional. On the other hand, consistent products are easier to create and maintain. T

Diversification Theory

  The Ansoff Matrix was created by Russian-American businessman, Igor Ansoff. It is basically a strategic planning application that provides a graphical framework to assist top managers, senior executives, and entrepreneurs formulate plans for the future growth of their company. The term Ansoff was derived from the word analysis. Mr Ansoff believed that if a company could be analyzed in a "mathematical" way, the company would not only be able to perform better on a national, but also an international level. The main idea of this product was that Ansoff believed that diversification was an absolute necessity in order for a company to survive and excel at the international stage. In other words, diversification was necessary in order for the company to sustain its existence in the markets that are most volatile and dangerous, like stocks in the emerging markets or the new markets, like foreign countries. Diversification also means spreading the risk. With diversification, it is

A Brief Look at the BCG Matrix

  The growth versus share matrix is a tool that was developed by Bruce D. Henderson for BCG, a manufacturing company, for the Boston Consulting Group. This tool can be used by any firm or organization that is interested in understanding their market and identifying areas of opportunities and those that require some analysis. Bruce D. Henderson had already developed the technical analysis method called back-testing. With this method, he could determine the effects of a change in one particular factor, such as inventory levels, on a firm's gross and net sales. Using this information, he could estimate how much of a change in the variables indicated by the back-test would affect the firm's sales and operating profits. To make a detailed analysis of a company's market growth, one must first identify the components that make up the matrix. The components are product, market, sector, company, geography, and fixed assets. Once these components have been identified, the next step i

Understanding Price Discrimination

 Price discrimination is a small-scale microeconomic pricing strategy in which the same or usually similar products or services are sold in various markets at different rates. For example, it is common practice in some parts of the world to sell similar shoes and clothes at the price of a third-rate brand in other regions. This  price differentiation  can be practised throughout the world, as many local businesses have a monopoly over certain goods. Examples of these are doctors, banks, restaurants and telecommunication companies. Price discrimination has its roots in the classical economic theory of supply and demand, where the difference in supply and demand of a good makes it more expensive in one location than in other locations. Microeconomics deals with the behaviour of individuals and their decisions. It uses a mathematical model to explain how people react to changes in demand for a good or service, and how they affect prices. The premise of microeconomics is that there is a d

Examples of Stability Strategy

 If you are new to the internet world and have limited knowledge about the dynamics of the internet and online business, then it would be good if you could take time to understand the significance of Examples of Stability Strategy. According to experts in the field, a stability strategy is one of the important key strategies of any organization. The basic idea behind stability strategy is that whatever is the status of an organization, regardless of whether it is growing or dying down, it must maintain its present level of business performance. This is why a lot of planning is not included in this type of strategy since there is no need for the organization to undergo any major changes. To start with, you must understand the basic concept of stability before even trying to implement it into your business. Since there is a lack of a specific definition for this term, it is better if you make use of the  examples of stability strategy . For instance, what do you think slide 10 in the abo