MGOC10H3 Study Guide - Midterm Guide: Sport Coat, Variable Cost, Ice Wine
5 Feb 2016
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Decision making process: define the problem, identify the alternatives, determine the criteria, evaluate the alternatives, choose an alternative. Marginal revenue = rate of change of total revenue with respect to sales volume. Marginal cost = rate of change of total cost with respect to production volume. Fixed cost = portion of total cost that doesn"t depend on production volume remains the same no matter how much is produced. Variable cost = portion of total cost dependent on and varies with production volume. Suppose firm considers a second product that has a unit profit of and requires 2 hours of production time for each unit produced. Use y as number of units of product 2 produced: show mathematical model when both products are considered simultaneously. 5x +2y 40 x 0, y 0: identify controllable & uncontrollable inputs. Deterministic model in which all uncontrollable inputs are known and cannot vary.
