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Allocating resources and costs - Essay Example

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This essay "Allocating resources and costs" dwells on the concept of allocating resources and costs. It is stated that allocation of resources can simply be described as the analysis of how scarce factors of production can be easily made available to the producers…
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Allocating resources and costs
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Allocating resources and costs Defining allocation of resources is not that easy in terms of its un-detailed nature, but it also relevant to understand that the backbone of health economist, health services researchers and potential business starters. Allocation of resources can simply be described as the analysis on how scarce factors of production can be easily made available to the producers while abundant goods and services are apportioned among consumers. Being a central theme in the economic market, the analysis takes into consideration the essential accounting costs, economic cost and opportunity costs among other resources and goods and services related costing methods.
The aim of resource allocation is mainly on health cost and policy makers who have great interest on enhancing the flow and transfer of knowledge that relates to both health sector services and business related services (Briggs, 2014). Economically considering laws of demand and supply, there will be no day when there is satisfaction when it comes to availability of sufficient resources that will allow possible means of improving health to be provided to people whom might need to benefit from their services. Whenever there is information regarding improvement in health sector resulting from allocation of scarce resources, there is always critical decision making process to be made on how resources should be allocated.
The relationship between resource allocation and cost is always reflected on pricing signals. To allocate scarce resources, the market economy highly depends on price signals which can only be projected by different costing methods. The relationship is that scarce resources have the potential to command higher costs than abundant resources. It therefore, means that, correct price signals guide users in the following ways; they will use scarce resources to command high cost on highly valued commodity while and uses low costs on lower valued commodities (2014). Therefore, it indicates that when costs are minimally or incorrectly projected, resources users will waste them by using scarce resource for lower valued purposes and leaving abundant resources underutilized. Resource allocation is as much as important as determining the correct costing method to be used during allocation.
References
Briggs, A. (2014). Rational allocation of resources available for healthcare: understanding cost effectiveness analyst. Journal Of The International AIDS Society, 17(4(Suppl 3). doi:10.7448/ias.17.4.19492 Read More
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