Managerial Economics & Environmental Performances-Free-Samples

Questions: 1.Given the estimated profits and probability values for the three projects are accurate, describe the approach you would use to determine the priority order of the three projects. How does the initial capital cost influence your recommendation about the priority order of the projects? 2.Are there other factors beyond those in the case that you believe would be useful to know prior to making a decision on which projects would be better in the long run? 3.Given the estimated profit levels and associated probabilities in the three projects described in the data set, determine the expected profit for each. Continue the analysis for determining the prioritization of the projects using the approach you described earlier. 4.Provide an appropriate narrative of your results, including an explanation of why you believe which one or more of the projects is likely to support the long term viability of ECCO A/S and its future in the market. Answers: 1.The initial cost of the project is around 50 million. It provides the outline of the project and guidelines of the market price of the initial cost associated with the capital. The profit of the three sectors of the production plan, marketing program and distribution program all are based on the initial capital cost (Achim Borlea, 2014). The profits are also determinate on the base of the capital cost. It works as the benchmark on evaluating the projects (Masiukiewicz Dec, 2013). The guideline which has been provided in the excel format are the profits on the following years, the probability of the returns. The first step is to calculate the actual return based on the profitability of the given years on every program or project. Then we can etermine the actual return on that year. Then we can implement the application of the Net present value method to determine the actual return on the capital (Joller, 2015). We also ought to analysis which year the returns are the best on that certain series. Then we need to compare all the three projects or the program and find out which are the best combination of all times. Then we can suggest the management based on those calculations (Petty, 2015). At last we have to analysis the demand of the product in the market, the current market share of the product and the cost associate with every unit of production. The provided data is useful to determine the micro analysis part of the investment. There are also many more factors to determine the analysis of he investment. Those are micro analysis of the investment such as the technology which they are going to implement, the tax structure of the particular area that they are going to operate, current market scenario of the product and many more (Darpizio, 2015). Another fact is also that the market is based on the projected sales of a certain period of the time. If there is an increase or decrease of the certain product or industry then how they are going to effect in the sales. In the marketing strategy there it is not mentioned that which tools that they are going to implement and finally what are the distribution tools that they are going to project as per the supply chain management (Subacchi et al., 2015) . 3.For New Production Plan - New Production Plan Profits in Millions Probability Probable Profit -40 0.05 -2 45 0.15 6.75 65 0.3 19.5 90 0.25 22.5 102 0.25 25.5 Well from the above statement it shows that the highest probability of the profit 0.25 which lies between 90 and 102. Therefore it can be stated that the profit lies between 90 and 102. The average of the profit is 96, which lies closely to 90. Therefore assuming the circumstances of the organisation if the statement has taken the 90, then the profit lies in the 25.5 %. We can easily state that the organisation is going to have a profit at least 22.5 millions on the average of the respective years. The investment which is 50 million dollars, then the return on capital would be around 2 years on the life span of the investment. New Marketing Profits in Millions Probability Probable Profit 10 0.1 1 33 0.1 3.3 55 0.15 8.25 80 0.3 24 95 0.35 33.25 Well form the above statement shows that highest profits lies between 80 and 95 profits in millions. The probabilities of these profits are 0.3 and 0.35 which are the highest in that segment (Khalili-Damghani Sadi-Nezhad, 2013). It is determined that the profit would be between 80 and 95 millions. Based on the average of both are around 88, which is close to 95. Then we state that the return on the profit would be around 30 million dollars. The investment which is 35 million pounds would be payback within 1.5 years easily. New Distribution Programme Profits in Millions Probability Probable Profit -20 0.075 -1.5 25 0.15 3.75 55 0.2 11 75 0.225 16.875 55 0.35 19.25 The investment in the distribution program is around 22 million pounds. The probability of 75 million profit which lies 0.225, states that the probable profit is around 16.875 and in the 55 million profits which is having a probability of 0.35 is the probable profit of 19.25 million dollars. Therefore we can state that 18.0575 is the profit on the average. As the investment suggested the return on capital would be 1.21 years approximately. On the conclusion we can state that the probability of the including on the overall aspect of the production plan would be around (90- 102). In the case of marketing scenario it lies in (80 95) and finally the distribution program it lies in (55-75). On the overall we can state that the organisation if going to invest in the three aspects the return on capital would be around 1.5 to 2 years respectively. 4.Well in the long run the scenario may differ from the current one. It may include on the overall basis of the probability. The occurrence may happen on the basis of the long term effect. In the production, marketing and distribution we have to look after all the above all average on the profits and probability (Chong Tuckett, 2014). In that scenario we have to take the management overall average of both the probability and profits. In the first production plant analysis we can state that the total profit is around 262 million and probable profit is around 72.25 million dollars. Therefore the average is 14.45. If we take the average then the return on the investment would be 3.46 years on the investment which would be lower compare to the current one. In the case of new marketing the return on the capital would be around 3.91 years which is again a long term from the current one. Therefore if we take probability of the overall investment in the case of the distribution program then the return on capital would be again 3.85 years. So, if we look the investment from the long term point of view we could state that the return on capital would be around on the average of 4 years. Therefore it is certain that the return on the overall 107 million dollars investment would take approx 4 years in the long run. Reference List Achim, M. V., Borlea, S. N. (2014). Environmental performancesway to boost up financial performances of companies. Environmental engineering and management journal, 13(4), 991-1005. Chong, K., Tuckett, D. (2014). Constructing conviction through action and narrative: how money managers manage uncertainty and the consequence for financial market functioning. Socio-Economic Review, 13(2), 309-330. Darpizio, C., Levato, F., Zito, D., de Montgolfier, J. (2015). Luxury goods worldwide market study. Bain Company. Joller, M. (2015). Ecco Sko A/S. Khalili-Damghani, K., Sadi-Nezhad, S. (2013). A hybrid fuzzy multiple criteria group decision making approach for sustainable project selection. Applied Soft Computing, 13(1), 339-352. Masiukiewicz, P., Dec, P. (2013). Dysfunctions and risks of big financial institutions. Business Systems Economics, 3(2), 196-207. Petty, J. W., Titman, S., Keown, A. J., Martin, P., Martin, J. D., Burrow, M. (2015). Financial management: Principles and applications. Pearson Higher Education AU. Subacchi, P., Pickford, S., House, C. Options for restoring growth in Europe.