Assume you have been hired as a managing consultant by a company to
offer some advice that will help it make a decision as to whether it
should shut down completely or continue its operations. It currently
uses 100 workers to produce 6,000 units of output per month (working 20
days / month). The daily wage (per worker) is $70, and the price of the
firm’s output is $32. The cost of other variable inputs is $2,000 per
day. You are told that the firm’s fixed cost is “high enough” so that
the firm’s total costs exceed its total revenue. The marginal cost of
the last unit is $30.
This assignment allows you to determine the specific details about
this fictitious company in order to conduct an environmental scan of
Write a three to four (3-4) page paper in which you:
- Briefly describe the details of the fictitious business that you created for this assignment.
- Assess the current environmental scan factors that are relevant to
the decision making process. Determine the factors that will have the
greatest impact on plant operations and management’s decision to
continue or discontinue operations. Provide a rationale for your
- Evaluate the financial performance of the company using the
information provided in the scenario. Consider all the key drivers of
performance, such as company profit or loss for both the short term and
long term and how each factor influences managerial decisions. Be sure
to show the calculations that helped you reach your conclusions.
- Recommend how the company can improve its profitability to deliver
more value to its stakeholders. Then, develop a brief plan to implement
- Assess the circumstances in which the company should discontinue
operations and how management should react when confronted with these
circumstances. Provide a rationale with your response.
- Use at least three (3) high-quality academic resources in this assignment.Note:Wikipedia and other Websites do not qualify as academic resources.