What is the relationship between marginal product and average product?
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You can't produce something without capital unless you have an inventory of the ingredients you need to produce it. For instance, if you wanted to make a recipe for chocolate …chip cookies, you couldn't make them unless you had the ingredients on hand if you didn't have any money to buy them, unless someone gave them to you. (MORE)
the production dept will prepare store requisition and send it to the store dept. the store keeper will issue the goods accordingly, posting of the goods in the system to tra…ck records. check the article history. if finished in the store. then need to raise Purchase request and send to purchasing department to raise Purchase Order, (MORE)
The marginal product curve is 'n' shaped because of the law of diminishing returns. As you add more units of a variable factor, at first, the marginal product rises, (this is …because the fixed factor is under-utilised, so adding more units of the variable factor will increase the output from each additional unit). But after a certain point, the marginal product begins to fall, as the fixed factor input becomes diluted amongst workers and so you get less from each additional unit of the variable factor. For an example, re-read the above paragraph and replace the word variable factor with labour and fixed factor with capital. The marginal cost curve is the inverse of the marginal product curve - hence it is shaped like a 'u' or a 'Nike tick'. This is because if your marginal product is high - then your marginal costs are low. For example, if a firm must pay electricity for the time it takes to produce a unit, if the firm can produce the unit quicker (i.e. has a high marginal product) then the cost of electricity will be lower. Hence the inverse relationship between marginal cost and marginal product. (MORE)
This article explains how to calculate and interpret profit margin.… (MORE)
Gross margin measures how profitably a company sells its products. This article explains how to calculate and interpret Gross margin.… (MORE)
The margin of error is an interesting notion to follow in mathematics. Basically, it represents how accurate a certain data value is, by analyzing all of the data values that …were used in order to generate this one data value, assuming that it was an average value. This notion is used commonly in a variety of practical sciences such as engineering and production. It is also used in more theoretical sciences such as statistics and algebra. This article explores some tips that you can follow in order to correctly calculate the margin of error.The most important thing to know when calculating the margin of error for a certain data set is to know the range of this data set. In many cases, the two are one in the same. In small sets, one can take the range of a certain data set to be the margin of error. This is especially true if you are absolutely sure that there are no outliers, which is to say, no values that are not too large or small to be considered within the normal scope of the data set.Outliers are values can drastically mess up your calculations if they are not taken into account when calculating the margin of error. Usually, any process or measurement has a sporadic error that cannot be measured. When the sporadic error occurs for any reason, be it human inaccuracy, or a certain one-off environmental condition, the values that result vary greatly from those that are normally obtained. You need to learn to identify these values by applying the scientific method and eliminate them from your calculations as they represent the exception, not the case.Understanding the notion of tolerance is important if you are working in a field that manufactures products or procure services. Basically, a tolerance is a range of values above and below a certain nominal value that a passable in a certain process. For example, when designing a screw, you may say that the tolerance for the dimensions of the screw is 1 micron plus-or-minus 0.5 microns. By using this notion, you indicate that any value between 1.5 microns and 0.5 microns is acceptable in your given process.The standard error is a statistical notion that combines the range of the data in question with the standard deviation in order to calculate a normalized error value for a large data set. Learning to calculate the standard error for discrete values and continuous data sets is an important skill to have when assessing error margins. Also need to gain the engineering sense associated with this standard error. This comes not with studying, but rather with industrial experience, as what might be considered a small standard error in one process may actually be a very large standard error in another.In order to get a grasp for how large a certain error is with respect to the data in question, it is sometimes of particular use to graph the error superimposed on the data. This can be done using a variety of different graphical representations such as histograms and line charts. In such cases, the error in the values can be represented in a variety of different ways such as bars or areas. For example, a histogram may be topped off with error bars indicating the lowest and highest values of the measurement in question.There are plenty of best practices that you can adhere to when it comes to learning how to calculate the margin of error. The important thing is to always know the range of the error in question. You should also ideally have the entire data sets in order for you to be able to analyze the data on your own. If such a thing is not possible, then you can tell a great deal about the error being represented by checking its graphical representation, or measuring standard error as compared to other similar processes.Tolerances and engineering notion that you will seldom encounter in other fields of pure science. Usually, "standard error" or "error margin" is used instead of tolerance in more academic fields such as algebra and statistics to represent the same notion. (MORE)
Looking at the unit level of a business can give you an idea of the profitability of a business model as a whole. Each product that is sold affects finances in multiple ways. …The cost of making the product will take money out, while selling it puts money back into the business. This is the basis for the contribution margin (CM), and the contribution margin ratio (CMR), as well.This done in terms of each unit, and contains the price and the variable cost (VC) of each unit. When you take the variable cost out of the price, you get the CM. This is a measure of the marginal profit of each unit. If a unit is priced at $100 and the VC is $50, then the CM is $50. This can be expanded if you have 100 units to be a CM of $5,000. This can be helpful with sales. Say you have a sale that reduces the price of a product. You now have to sell more units to achieve that same total CM, because the CM per unit is lower. Once you have the CM, you can take out fixed costs and it gives you the net operating income. This is a simple metric to give you an idea of how price and variable costs can affect income.This looks at the CM as a percentage of sales. This can be done on the unit level, or the total sales level. It is mainly used to calculate how much a business can earn from each sale. A low CMR is not necessarily bad, while a high CMR is generally preferred. The higher the CMR, the more room there is for covering fixed costs. A negative CMR is not a sustainable business practice as the business would be losing money on each sale, but temporarily going negative can be done for promotional purposes or to introduce a new product at a lower price.This takes the CM per unit and divides it by the price. Taking the total CM of $5,000 and dividing it by the total price would give a CMR of 0.50 or 50 percent. What this means is that 50 percent of sales made will help take care of the fixed costs of producing those units. When you remove the percentage of fixed costs, you get what percentage is profit. So if you have $3,000 of fixed costs, then that is 30 percent of the total costs of the units. That means that 80 percent of each sale goes towards paying for costs, and 20 percent is profit.This equation can help a business owner make financial decisions regarding certain products. If the equation shows that there is no room for profit, then the owner may decide to eliminate the product or find a way to reduce costs. Another way it is useful is that it can help calculate sales targets. If a business wants to make a certain amount of profit, then it can compute the amount of sales it needs to hit a specific CM. It can also calculate what price or variable cost it would need to reach a certain CMR.Having a high CM does not mean a business actually makes more profit. It could have more fixed costs that make net losses instead. Generally businesses would want a CM that gives them the most profits, which means a higher one. However, some types of businesses will usually have a low CM. Cheaper products that are alternatives to higher priced ones will generally have a lower CM, which means to sustain that low price point, businesses have to sell more units. Businesses that offer low cost services in competition with other businesses offering the same services for more will operate the same way.The contribution margin ratio is a valuable tool for businesses to assess how pricing affects their finances. The price of a product will determine how well it covers the costs of doing business. By using the CMR, you are able to see how much of the price is available to cover fixed costs after evaluating how much of the price covers variable costs. If a business needs a certain CM to cover fixed costs, it can input a certain price or variable cost per unit to meet that CM.The contribution margin is a controversial idea in business because of its approach to increasing the margin. It promotes increasing the margin mainly by selling more units. When costs go up, the reaction is to sell more units instead of finding ways to lower the costs. Eventually that won't be a viable option, but losses could have been incurred by that approach before coming to that conclusion. (MORE)
This article explains how to calculate and interpret Operating margin, an important financial statement ratio used to analyze a company's profitability.… (MORE)
Finding initial information on mortgage loans is difficult, especially if you are unaccustomed to the world of finance. Unfortunately, it is critical that you understand the c…oncepts of margins, adjustable rates and indexes when working towards purchasing your new home. Each of these concepts is necessary for determining the overall costs of your mortgage loan. Of all these concepts, loan margins are stable and unchanging in your loan structure.A loan margin is a percentage above a specific index rate that determines the actual rate of your loan. Say, for instance, that the index your loan uses is currently at 5 percent, and your index is set at 3 percent. This makes your overall rate 8 percent. Lenders use a number of different indexes, including the index of U.S. Treasury Bills.These loans are usually more expensive. Since an adjustable scale is used to determine the overall rate of your loan, buying a house while the market is better for buyers has less of an impact on the total expense of your home. If, for instance, you choose to buy your home with a loan that begins with a low index of 3 percent, that index has the potential to increase to upwards of 5 percent in a few short months. As the index rises, so does the costs of your loan.Mortgage loan margins range anywhere from 2 percent to 4 percent. Anything over 4 percent puts you at risk of piling on huge additional expenses. On the other hand, anything under 2 percent is very difficult to find. The lower the margin the better, so aim for around 2 percent.It is not possible to raise a loan rate indefinitely with a margin. Most loans have what are known as caps, so that even if the index it is based on soars out of control, you don't have to pay a comparative fortune for your home. These caps work in such a way that it limits the amount your rate is able to be raised in one year and over a lifetime. This means that a loan with a lifetime cap of 10 percent is only able to be raised by ten percentage points total. That same loan with a yearly cap of 3 percent is only able to increase by 3 percent over the course of a year.It's easy to take on an adjustable loan that sounds good in the beginning. In fact, mortgage financiers commonly offer these loans when their indexes are low. However, after a few months when rates go back up, the "deal" you got on your home has vanished. Take care in determining just how high an adjustable loan rate can be before you agree to anything.Your loan margin is a reflection of your lenders view of your riskiness. The worse your credit rating, the larger the risk your lender feels it is taking on. Consequently, you have a higher loan margin. (MORE)
Margianal cost curve crosses the average total cost curve at the lowest point on the average total cost curve to be socially and ecomonical efficient.
Production management is the planning,organisation,staffing,leading,control and coordinating of human and material resources for excution of the facility in a specific functio…n to meet pre-determined objectives in the constraints of time cost and quality (MORE)
As a basic law of economics, production and supply go hand in hand. At first, if you produce something people want, you make money by selling it. If you keep producing, you ma…ke more money. But if you produce too much, and there is no longer a demand for the product, you will not make as much money. so, as production increases, money increases until you reach the point where supply and demand are equal. (MORE)