Managerial decisions Term Paper Example | Topics and Well Written Essays - 2250 words

Managerial decisions - Term Paper Example More revenue will be generated at a lower cost of production, which is an additional advantage to the company. Contract workers are paid less money than full time employees, and this will be a great advantage to the company as a whole. Introduction According to Kotler & Armstrong (2004), the elements of supply and demand in business are interrelated, and in some cases, they also affect the price of a certain market offering. However, in this case it is assumed that the price is constant and the aim is to establish how supply can be increased in order to meet the rising demand of certain goods without offsetting the prevailing market trends. Economically, if the demand for a certain product increases, then its supply also increases. This relationship will be illustrated using a supply curve later in the paper. Therefore, this paper seeks to explain in detail the relationship between supply and demand in detail and show how this can affect managerial decisions. In some cases, managers need to make decisions that do not affect the viability of the organization in the long run, trying to meet the rising demand for a certain product. ... products offered in the market remains the same, but this issue of the rising demand has to be addressed in order to cater for the needs of customers, who are valuable to the organization. It is also assumed that this increase in demand may not be permanent, and hence the need to put effective measures that do not impact negatively on the operations of the organization. Therefore, the main question to be answered in this case is: Should our company hire temporary or hire new workers to handle the increase in demand for our products? Essentially, there is a need to maintain production costs at a lower level while increasing the supply of the product offered by the company. This is meant to ensure that the company remains viable and that it is also able to operate profitably since the price is not going to change in this particular case. The only thing that will change is the supply of the products offered. An increase in supply entails that more sales are likely to be generated. This also means that more revenue will be realized from the operations of the organization. As such, a holistic approach has to be taken in order to make sure that the workers who are going to be hired will not greatly increase the operational costs, which may impact the viability of the organization. Factors or costs There are various costs that need to be taken into consideration when making managerial decisions that have economic implications on the operations of the organization. Hiring temporary workers impliedly means that the company will not incur a lot of labour costs because of the following reasons: The organization has the autonomy to determine the wage rate of the contract workers. The company does not have the burden of paying fixed salaries to these workers since this may increase