chapter 1 m.e
TRANSCRIPT
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Operations Research
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Optimisation = Efficiency + Savings
A uniquely powerful approach to
decision making
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Decision Support
Decision Support Tool
Interface
Information Systems
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A Team Effort
Interface
Information Systems
Users
Comp SciOps Res Decision Support Tool
Info SysBiz Analyst
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Operational research, also knownas operations research, is an
interdisciplinary mathematical
science that focuses on the
effective use of technology by
organizations.
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By using techniques such as
mathematical modeling to analyzecomplex situations, operations
research gives executives the power tomake more effective decisions and
build more productive systems based
on:
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More complete data
Consideration of all available optionsCareful predictions of outcomes and
estimates of riskThe latest decision tools and
techniques
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The role of managerial economist
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The role of managerial economistHe studies theeconomic patterns at macro-level and analysis its
significance to the specific firm he is working in.
He has to consistently examine the probabilities of transforming
an ever-changing economicenvironment into profitable
business avenues.
He assists the business planning process of a firm.
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The role of managerial economist
He also carries cost-benefit analysis
In addition, a managerial economist has to
analyzechanges in macro- economic indicators such as
national income, population, business cycles, and their
possibleeffect on the firms functioning.
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The role of managerial economist
He is also involved in advising the management on public
relations, foreign exchange, and trade. He guides the firm on the
likely impact ofchanges in monetary and fiscal policy on thefirms functioning.
He also makes an economic analysis of the firms in
competition. He has to collect economic data and examine all
crucial information about theenvironment in which the firm
operates.
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The role of managerial
economist
The most significant function of a
managerial economist is to conduct a
detailed research on industrial market.
In order to perform all theseroles, a
managerial economist has to conduct an
elaborate statistical analysis.
He must bevigilant and must have ability to
cope up with the pressures.
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The role of managerial economist
He also provides management with economic
information such as taxrates, competitors price
and product, etc. They give theirvaluable advice togovernment authorities as well.
At times, a managerial economist has to prepare
speec
hes fo
rtop manag
ement
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Objectives of the firm Objectives are targets or goals that a
business sets itself
The theory of the firm is based on theassumption that all businesses will operateto make a profit
Businesses face upward sloping total costand revenue curves as more is producedcosts increase and as more is sold revenueincreases
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Additional Objectives There are additional objectives that a
business could pursue including:
Growth
Sales revenue maximisation
Limit pricing to gain monopoly power
Customer satisfaction
The satisficing principal sets a minimum
acceptable level of achievement
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Managerial theories of the firm
Managerial theories of the firm place
emphasis on various incentive mechanisms
in explaining the behaviourof managers
and the implications of this conduct for their
companies and the widereconomy.
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owners, but by its managers, and therefore
does not aim to maximise profits. Although
profit plays an important role in these
theories as well, it is no longerseen as the
sole ordominating goal of the firm. The
otherpossible aims might be sales revenuemaximisation orgrowth
Managerial theories of the firm
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THANK YOU
THANK YOU
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