Inventory Turnover Ratio: A high inventory turnover ratio can suggest either strong sales or ineffective buying. A company could buy too often in small quantities. This could cause the purchase price to be higher. A high inventory turnover ratio can indicate better liquidity, but it can also indicate a shortage or insufficient inventory levels, which may lead to a loss in business. A low inventory turnover ratio suggests either excess inventory on hand or poor sales.
Cost Push Inflation If there is an increase in the costs of firms, then firms will pass this on to consumers. There will be a shift to the left in the aggregate supply. Cost push inflation can be caused by many factors: 2.2.1. Rising wages If trades unions can present a common front then they can bargain for higher wages. Rising wages are a key cause of cost push inflation because wages are the most significant cost for many firms.
Overview The Bullwhip Effect is a phenomenon in the distribution channel which forecasts the actual yield inefficiencies in a supply chain. It refers to the increasing fluctuations in the inventory as per response to shifts in consumer demand on moving further up in the supply chain. The bullwhip effect was named actually for the way the scale of a whip increases down its full length. The further we move away from the originating signal, the greater the distortion of the resulting wave pattern. Thus in a similar manner, we can conclude that forecast accuracy decreases as move further upstream along the supply chain.
This might occur if one was trying to replace capital equipment for labour. If producers of capital equipment were operating their plants near capacity, taking on new orders would cause them substantial increases in costs as they would have to work their employee’s overtime. They would only accept new orders if they could charge a higher price for their equipment. A price increase like that would change some businesses minds about the capital and limit the substitution of capital for
Division of labour is limited mainly due to the small size of the market.That is, if there is more demand for a good,it will produce more and has a large scope for the application of the division of labour in order to increase the production rate. By the division of labour increases the production i.e. Output from the applied labour, increases the skills and the efficiency of workers, saving in time so that production rate will increase. By the introduction of machinary there was greater risk of unemployment.According to Adam smith there are two kind of Value: 1)Value in use 2)Value in
On the other hand, if the firm’s research shows that income of the Buyer is rising than they will also try to raise the price their product accordingly. Broadening the range of their products: On the basis of elasticity of Buyer’s income a firm can offer wide range of their products to share the risk of income change of Buyer. Suppose if a firm offers only one product to the and the income of that particular Buyer falls than firm have no other option but to reduce the price of their product, but the if firm have offer wide range of products than the risk for income change of one Buyer can be shared by wide range of products and the might be able to reduce the risk of price change with the Buyer income. Elasticity of Buyer’s income and business
CHAPTER ONE: INTRODUCTION 1.1 Background of the Study Financial distress is the situation when a company is not in a position to or face difficulty to pay off its financial obligations to the creditors. When fixed costs are high there is chance of causing financial distress to increases, assets are illiquid, or revenues that are too sensitive to economic recessions. A company which is in financial distress experiences several costs linked to the situation namely; exclusive financing, opportunity costs of projects and less dynamic employees. The cost of borrowing additional capital of the firm will generally increase, increasing the much desired funds to make it extra challenging and costly. To fulfill short-term obligations, management might
Expansive firms as Orascom Construction face expense structure as a noteworthy issue. It drives them to higher the expenses which can make buyers go look for less costs at less effective firms. These shortcoming focuses may prompt a high risk of substitutes on the off chance that they don't keep the colossal track of development and development not surprisingly. Further, swinging to the open doors, we find that Orascom Construction is concentrating on growing its Infrastructure Investments Portfolio. The firm advantages from an appealing structure whereby it is the developer, proprietor and administrator of a base resource.
A minimum wage set reasonably over the market wage can still cause establishment-level employment to upsurge, despite the decline in establishment-level labour supply. That is because if all firms offer higher wages, the labour participation rate must increase too. So, even in the case of multiple employers, a minimum wage set reasonably higher that the market wage can increase employment through bigger labour market participation
This lead to many problems such as the problem of co-ordination. It will slow down and cumbersome the process of making decision. This will leads to a lower output and higher cost. Other than that, the problem is administrative problem that how the way worker works and inability to monitor works effectively in large firms. For examples, companies such as Digi or Celcom would have communication difficulties when the management level intends to communicate with the lower level workers.