Operations Decision - Essay Example

The business has of late been working under pressure due to the warning given by the state concerning the fictitious businesses operating in the country that they will all be shut down. However, the main worry of this business is how to maximize profits at the lowest cost possible (Gee, 2006). Environmental scanning means possession and usage of data about events, blueprints, trends, and associations inside an institution’s internal and outside environment. It assists the mangers make conclusions on the prospect path of the company.

Scanning should establish the risks and opportunities prevalent in the environment. In strategy invention, an institution should take advantage of the opportunities and reduce the risks. A risk of an institution can be an opportunity for the other. Internal breakdown of the environment is the initial step of environmental scanning. Institutions must observe the internal institutional environment, which constitutes worker association with different workers, worker association with management, manager association with different managers, and management association with shareholders, availability of natural resources, brand sensitivity, institutional culture, major personnel, operational capacity, among many more.

In addition, debates, interviews, and explorations can be applied to evaluate the internal environment. Breakdown of internal environment assists in establishing powers and weaknesses of an institution (Cross & Miller, 2009). An enterprise becomes further competitive, and there exist sudden reforms in the external environment, data from the outside environment brings vital factors to the efficiency of long-term arrangements. Since the environment is changing, it becomes important to establish the competitor’s steps and deeds.

Institutions have as well to update the key competencies and interior environment as per outside environment. Environmental factors are infinite, thus institution must be lively and vigilant to admit and regulate to the environmental reforms. The external factors will very much influence the decision-making and the plant operations than the internal operations. This is because they mainly contribute to the existence and progression of the organization. If the competition in the market is stiff for the business, then there will be no other option other than to close.

The level of advancement in the business, market tastes and preferences, competition; the external environment, and so forth determines the viability of an enterprise. They lead the managers in making decisions. Low technology level in a computer business will mean production of outdated items thus the business might close; if the products produced lack customer tastes and preferences, they will get damaged and depreciate in the store (Agtarap-San, 2007). The company consisting of 100 workers and producing 6,000 computers per month, this means each worker per day produces: 6000/20= 300 computers are produced per day Each worker= 300/100= 3 computers per day.

The daily wage per worker is $70, thus the total salary for the employees= $70x100= $7,000 per day. The total salary per month is $7,000x20= $140,000 Total sales = 6,000x $32= $192,000 Total production cost= $140,000+ $2,000= $142, 000+ X (fixed cost) X (Fixed costs) = $192,000- $142,000= $50,000+y (to make the production cost exceed the revenue) The business at this point is making losses. Total marginal cost= $30x1= $30 In the above situation,