ECO 550 Assignmrent 2: Operations Decision

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Using the regression results and the other computations from Assignment 1, determine the market structure in which the low-calorie frozen, microwavable food company operates.

Use the Internet to research two (2) of the leading competitors in the low-calorie frozen, microwavable food industry, and take note of their pricing strategies, profitability, and their relationships within the industry (worldwide).

Write a six to eight (6-8) page paper in which you:

  1. Outline a plan that will assess the effectiveness of the market structure for the company’s operations. Note: In Assignment 1, the assumption was that the market structure [or selling environment] was perfectly competitive and that the equilibrium price was to be determined by setting QD equal to QS. You are now aware of recent changes in the selling environment that suggest an imperfectly competitive market where your firm now has substantial market power in setting its own “optimal” price.
  2. Given that business operations have changed from the market structure specified in the original scenario in Assignment 1, determine two (2) likely factors that might have caused the change. Predict the primary manner in which this change would likely impact business operations in the new market environment.
  3. Analyze the major short run and long cost functions for the low-calorie, frozen microwaveable food company given the cost functions below. Suggest substantive ways in which the low-calorie food company may use this information in order to make decisions in both the short-run and the long-run.

TC = 160,000,000 + 100Q + 0.0063212Q2
VC = 100Q + 0.0063212Q2
MC= 100 + 0.0126424Q

  1. Determine the possible circumstances under which the company should discontinue operations. Suggest key actions that management should take in order to confront these circumstances. Provide a rationale for your response. (Hint: Your firm’s price must cover average variable costs in the short run and average total costs in the long run to continue operations.)
  2. Suggest one (1) pricing policy that will enable your low-calorie, frozen microwavable food company to maximize profits. Provide a rationale for your suggestion.

(Hints:

  • In Assignment 1, you determined your firm’s market demand equation. Now you need to find the inverse demand equation. Having found that, find the Total Revenue function for your firm (TR is P x Q). From your firm’s Total Revenue function, then find your Marginal Revenue (MR) function.
  • Use the profit maximization rule MR = MC to determine your optimal price and optimal output level now that you have market power. Compare these values with the values you generated in Assignment 1. Determine whether your price higher is or lower.)
  1. Outline a plan, based on the information provided in the scenario, which the company could use in order to evaluate its financial performance. Consider all the key drivers of performance, such as company profit or loss for both the short term and long term, and the fundamental manner in which each factor influences managerial decisions.

(Hints:

  • Calculate profit in the short run by using the price and output levels you generated in part 5. Optional: You may want to compare this to what profit would have been in Assignment 1 using the cost function provided here.
  • Calculate profit in the long run by using the output level you generated in part 5 and cost data in part 3 and assuming that the selling environment will likely be very competitive. Determine why this would be a valid assumption.)
  1. Recommend two (2) actions that the company could take in order to improve its profitability and deliver more value to its stakeholders. Outline, in brief, a plan to implement your recommendations.
  2. Use at least five (5) quality academic resources in this assignment. Note: Wikipedia does not qualify as an academic resource.

Your assignment must follow these formatting requirements:

  • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. 

 

Assignment 2: Operations Decision

Criteria

Unacceptable
Below 70% F

Fair
70-79% C

Proficient
80-89% B

Exemplary
90-100% A

1. Outline a plan that will assess the effectiveness of the market structure for the company’s operations.
Weight: 10%

Did not submit or incompletely outlined a plan that will assess the effectiveness of the market structure for the company’s operations.

Partially outlined a plan that will assess the effectiveness of the market structure for the company’s operations.

Satisfactorily outlined a plan that will assess the effectiveness of the market structure for the company’s operations.

Thoroughly outlined a plan that will assess the effectiveness of the market structure for the company’s operations.

2. Given that business operations have changed from the market structure specified in the original scenario in Assignment 1, determine two (2) likely factors that might have caused the change. Predict the primary manner in which this change would likely impact business operations in the new market environment.
Weight: 10%

Did not submit or incompletely determined two (2) likely factors that might have caused the change,  given that business operations have changed from the market structure specified in the original scenario in Assignment 1. Did not submit or incompletely predicted the primary manner in which this change would likely impact business operations in the new market environment.

Partially determined two (2) likely factors that might have caused the change, given that business operations have changed from the market structure specified in the original scenario in Assignment 1.  Partially predicted the primary manner in which this change would likely impact business operations in the new market environment.

Satisfactorily determined two (2) likely factors that might have caused the change, given that business operations have changed from the market structure specified in the original scenario in Assignment 1. Satisfactorily predicted the primary manner in which this change would likely impact business operations in the new market environment.

Thoroughly determined two (2) likely factors that might have caused the change, given that business operations have changed from the market structure specified in the original scenario in Assignment 1. Thoroughly predicted the primary manner in which this change would likely impact business operations in the new market environment.

3. Analyze the major short run and long cost functions for the low-calorie, frozen microwaveable food company given the cost functions below. Suggest substantive ways in which the low-calorie food company may use this information in order to make decisions in both the short-run and the long-run.
Weight: 10%

Did not submit or incompletely analyzed the major short run and long cost functions for the low-calorie, frozen microwaveable food company given the provided cost functions. Did not submit or incompletely suggested substantive ways in which the low-calorie food company may use this information in order to make decisions in both the short-run and the long-run.

Partially analyzed the major short run and long cost functions for the low-calorie, frozen microwaveable food company given the provided cost functions. Partially suggested substantive ways in which the low-calorie food company may use this information in order to make decisions in both the short-run and the long-run.

Satisfactorily analyzed the major short run and long cost functions for the low-calorie, frozen microwaveable food company given the provided cost functions. Satisfactorily suggested substantive ways in which the low-calorie food company may use this information in order to make decisions in both the short-run and the long-run.

Thoroughly analyzed the major short run and long cost functions for the low-calorie, frozen microwaveable food company given the provided cost functions. Thoroughly suggested substantive ways in which the low-calorie food company may use this information in order to make decisions in both the short-run and the long-run.

4. Determine the possible circumstances under which the company should discontinue operations. Suggest key actions that management should take in order to confront these circumstances. Provide a rationale for your response.
Weight: 15%

Did not submit or incompletely determined the possible circumstances under which the company should discontinue operations. Did not submit or incompletely suggested key actions that management should take in order to confront these circumstances. Did not submit or incompletely provided a rationale for your response.

Partially determined the possible circumstances under which the company should discontinue operations. Partially suggested key actions that management should take in order to confront these circumstances. Partially provided a rationale for your response.

Satisfactorily determined the possible circumstances under which the company should discontinue operations. Satisfactorily suggested key actions that management should take in order to confront these circumstances. Satisfactorily provided a rationale for your response.

Thoroughly determined the possible circumstances under which the company should discontinue operations. Thoroughly suggested key actions that management should take in order to confront these circumstances. Thoroughly provided a rationale for your response.

5. Suggest one (1) pricing policy that will enable your low-calorie, frozen microwavable food company to maximize profits. Provide a rationale for your suggestion.
Weight: 10%

Did not submit or incompletely suggested one (1) pricing policy that will enable your low-calorie, frozen microwavable food company to maximize profits. Did not submit or incompletely provided a rationale for your suggestion.

Partially suggested one (1) pricing policy that will enable your low-calorie, frozen microwavable food company to maximize profits. Partially provided a rationale for your suggestion.

Satisfactorily suggested one (1) pricing policy that will enable your low-calorie, frozen microwavable food company to maximize profits. Satisfactorily provided a rationale for your suggestion.

Thoroughly suggested one (1) pricing policy that will enable your low-calorie, frozen microwavable food company to maximize profits. Thoroughly provided a rationale for your suggestion.

6. Outline a plan, based on the information provided in the scenario, that the company could use in order to evaluate its financial performance. Consider all the key drivers of performance, such as company profit or loss for both the short term and long term, and the fundamental manner in which each factor influences managerial decisions.
Weight: 10%

Did not submit or incompletely outlined a plan, based on the information provided in the scenario, which the company could use in order to evaluate its financial performance. Did not submit or incompletely considered all the key drivers of performance, such as company profit or loss for both the short term and long term, and the fundamental manner in which each factor influences managerial decisions.

Partially outlined a plan, based on the information provided in the scenario, which the company could use in order to evaluate its financial performance.  Partially considered all the key drivers of performance, such as company profit or loss for both the short term and long term, and the fundamental manner in which each factor influences managerial decisions.

Satisfactorily outlined a plan, based on the information provided in the scenario, which the company could use in order to evaluate its financial performance. Satisfactorily considered all the key drivers of performance, such as company profit or loss for both the short term and long term, and the fundamental manner in which each factor influences managerial decisions.

Thoroughly outlined a plan, based on the information provided in the scenario, which the company could use in order to evaluate its financial performance. Thoroughly considered all the key drivers of performance, such as company profit or loss for both the short term and long term, and the fundamental manner in which each factor influences managerial decisions.

7. Recommend two (2) actions that the company could take in order to improve its profitability and deliver more value to its stakeholders. Outline, in brief, a plan to implement your recommendations.
Weight: 10%

Did not submit or incompletely recommended two (2) actions that the company could take in order to improve its profitability and deliver more value to its stakeholders. Did not submit or incompletely outlined, in brief, a plan to implement your recommendations.

Partially recommended two (2) actions that the company could take in order to improve its profitability and deliver more value to its stakeholders. Partially outlined, in brief, a plan to implement your recommendations.

Satisfactorily recommended two (2) actions that the company could take in order to improve its profitability and deliver more value to its stakeholders. Satisfactorily outlined, in brief, a plan to implement your recommendations.

Thoroughly recommended two (2) actions that the company could take in order to improve its profitability and deliver more value to its stakeholders. Thoroughly outlined, in brief, a plan to implement your recommendations.

8. 5 references
Weight: 5%

No references provided

Does not meet the required number of references; some or all references poor quality choices.

Meets number of required references; all references high quality choices.

Exceeds number of required references; all references high quality choices.

9. Writing Mechanics, Grammar, and Formatting
Weight: 5%

Serious and persistent errors in grammar, spelling, punctuation, or formatting.

Partially free of errors in grammar, spelling, punctuation, or formatting.

Mostly free of errors in grammar, spelling, punctuation, or formatting.

Error free or almost error free grammar, spelling, punctuation, or formatting.

10. Appropriate use of APA in-text citations and  reference section
Weight: 5%

Lack of in-text citations and / or lack of reference section.

In-text citations and references are provided, but they are only partially formatted correctly in APA style.

 

In-text citations and references are error free or almost error free and consistently formatted correctly in APA style.

11. Information Literacy / Integration of Sources
Weight: 5%

Serious errors in the integration of sources, such as intentional or accidental plagiarism, or failure to use in-text citations.

 

Sources are mostly integrated using effective techniques of quoting, paraphrasing, and summarizing.

Sources are consistently integrated using effective techniques of quoting, paraphrasing, and summarizing.

12. Clarity and Coherence of Writing
Weight: 5%

Information is confusing to the reader and fails to include reasons and evidence that logically support ideas.

Information is partially clear with minimal reasons and evidence that logically support ideas.

 

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