As aggregate demand affects the supply (production, employment and inflation) they saw it as the government's role to build it back up using monetary and fiscal policies. Similar to Classical economists, Keynesian believe the economy comprises the same part: consumer spending, government spending, and business investments. However the major difference is that Keynesians believed government spending could help account for the lack of consumer spending and investment. The Keynesian theory also was based on the idea that wages and prices were sticky and that is would give aggregate supply a horizontal line in the short run. Overall, the main idea of the Keynesian Economist was to save and create jobs and
Disadvantages of marginal costing compared to absorption costing • Not acceptable under IFRS/IAS or US GAAP • Absorption costing (or ABC) can also help to understand costs in greater detail as marginal costing technique does not analyze fixed costs at all • In practice, it may be difficult to distinguish between variable and fixed costs or the result of doing so may be misleading • Is less appropriate for longer-term planning as fixed costs per unit may vary over the longer time 9.3. Activity based costing (ABC) Activity based costing (ABC) is costing technique, under which all costs are allocated to company activities according to what are the drivers of the activities. Costs are then allocated to products based on product´s consumption of these activities. ABC was developed to overcome the disadvantages of absorption costing, is very appropriate for pricing and product prioritization considerations. But unless this method is adjusted, it is not acceptable under IFRS and US GAAP (mainly because it allocates also selling and administrative overheads).
The reason being that both theories are concerned with the efficient managing of contractual relations. Following the RDT, which assumes that no organisation is capable of generating all of the resources that it needs to operate (Pfeffer & Salanik, 1978). Therefore managers in business engage in structured contracted transactions when exchanging goods and services. These include joint ventures mergers and hierarchical contracts that I have discussed earlier in the essay. RDT is yet again similar to TCE, because it encourages firms to safeguard against the future by becoming more independent of market and environment forces.
Market segmentation came into existence with the thought that one size doesn’t fit all. A heterogeneous market is divided and viewed as several homogeneous markets. It is an essential aspect of marketing in industrialised countries. Goods are no longer produced or sold without considering customer needs and the heterogeneity of those needs. a) Nature and Purpose of Market Segmentation Purpose of Market Segmentation The main purpose of market segmentation is to allow a market or the marketing program to focus on the prospects that are most likely to purchase the product or service.
The Real Business Cycle Theory. The most important idea of the Real Business Cycle Theory is that business cylces occur due to productivity shocks or changes in the rate of technological process. Business cycles can be characterised by comovements of a large number of economic variables and also periods of expansion associated with high levels or economic activity and periods of contration associated with periods of low economic activity. The RBC deals exclusively the real varibles and not nominal variables. As a result of this RBC theory cannot be used to estimate inflation or to study the relationship between output and inflation.
Indeed, ratio analysis is often criticized on the grounds of subjectivity that is the analyst must pick and choose ratios in order to assess the overall performance of a firm. In this paper we demonstrate that Data Envelopment Analysis (DEA) can augment the traditional analysis. DEA can provide a consistent and reliable measure of managerial or operational efficiency of a firm. We test the null hypothesis that there is no relationship between DEA and traditional accounting ratios as measures of performance of a firm. Out results reject the null hypothesis indicating that DEA can provided by traditional ratio analysis.
The exogenous variables in the Buckley and Casson model can be characterised as either firm-specific, industry-specific, or location-specific. Firm-specific variables are exemplified by the costs of R&D, which reflect the skills of the firm's R&D team; industry-specific factors by the costs of licensing, which reflect the nature of the knowledge used in the industry; and location-specific factors by production costs in different regions. This theory as a summary, MNEs invest aboard as they want reduce search and negotiating, costs of violated contracts and ensuing litigation. To avoid government intervention (e.g., quotas, tariffs, price controls).To control supplies and conditions of sale of inputs (including technology) and market outlets. To better apply cross-subsidization, predatory pricing, and transfer
The main issue is that would it say it is a decent thing decreasing the customization characteristics? The test confronted when actualizing customization into ERP is that on the grounds that the current undertaking asset arranging had have a fix interface for the client in this manner there's a restriction to customization. Customization was expected to enhance the capacities of an ERP framework by permitting it to help each sort and size of business however by and by, cutting edge ERP arrangements incorporate pertinent peculiarities and apparatuses that give organizations the straightforwardness in overseeing key information, for example, content, date and number records. Through a led examination, they gave the cutting edge ERP framework eventually to figure out if it can stay aware of the current performance of their business, and they decide to tweak in the long run at whatever point it is important to do so. Truth be told, it was uncommon for entrepreneurs to depend on their ERP software as it is without performing any personalization errand that is expected to match the framework with their industry or business profile.
The initial researchers on the cost of quality sought to disabuse managers of this notion. The conceptualization of quality cost extended the reach of quality beyond the manufacturing sector and made it the responsibility of everyone in a manufacturing company. Crosby (1979) introduced a new concept that quality is free. His argument was that while quality was not a gift, it was free. According to him, the only cost of quality is the cost of doing things wrong.
It was first developed in large part to understand how alternative exchange-rate regimes work and how the choice of exchange-rate regime impinges on monetary and fiscal policy (Floden, 2010). It is described as the dominant policy paradigm for studying open-economy monetary and fiscal policy (Obstfeld and Rogoff, 1996). The model is a close relative of the IS-LM, extending beyond it to the case of an open economy. Like the IS-LM model, the Mundell-Fleming model assumes a fixed price level and then shows the causes of short-run fluctuations in aggregate income (or, equivalently, shifts in the aggregate demand curve). The differing area is that the Mundell-Fleming model assumes an open economy whereas the IS-LM assumes a closed economy.