short-term decision making Flashcards
hwo does contribution aid short-term decision making?
looks at revenue and variable costs to help make short term decisions
which products should you make?
those that are making a postivie contribution (selling price > variable costs)
are fixed costs avoidable?
no, you must pay them whatevre you decide so they should be ireevlant to decisiosn about products
resource constraints
scarcity of resoruces (e.g finance, amterials, skilled labour, space, equiptment)
qualitative factors
may override costs
- customers
- emplpyees
- competitors
- legal constraints
- suppliers
customers
qualitative factors
- demand and loyalty
- inclsuion of exclusion of a product in range
employees
qualitative factors
- closure or relocation decisions requir sensitivity
- trade union responses
competitors
qualitative factors
will there be retaliation from competitors?
legal constraints
qualitative factors
heatlh and saftey issues
suppliers
qualitative factors
- quality/ promptess/ reliability of the supplier
- credit facilities
- after sales service
what decisions can short-term decison making be applied to?
- resrouces constraint decisions
- resrouce constrained decisions
- mutually exclusive decisions
