Cl Fredluction Aralyse f r production: f of Convertionn of rau) Mon Precluchion 1 a preeese into frrishect’ procucts 1 are’ ccs of convertion of physical” inpals is a proce: mto Physical @utputs j Precction fanction - Production function refers to Me functional’ velo “ Ship Between physical mus and — of Out : ' , th physteal terms: production function 13 te relationship Ge fiveen Of Output proclace and ab cael as mputs - - ai The functional relatian ship anit by of epekieeteninal: fpr —— _tien proftts Stiduaten of? the Vartables rnay mae Ge \mpertant therefore the econormes Rave reduced the no o vaytables into only tug Variables (Bour and Capi tel faboun 18 denoted! by g Gopftal 1 dencted| by CK Coh® - Poug las Production function: ex- . Re amertean senator and econamist, paul H Douglas and a mathemattion charles U0-cobB makes a Stalrsttar| research ' 1990's bo ftnd out the actual production function in the whole of american rnantfecutring industry: GB Ke Qpilal? a= eBisttcity of Fabeuy elasttetty of Fas elastetty of Gpital Prcdiick onal 3 ~ Douglas To cshmate the procluction furchén By Cobb - Doug they use Same asseimplions - fwt =a My) The elastntt, of Bb ancl Gupttal ; 7 andl We vale Sum Should be epuctl’ 1 tke product functtom can Be fonstant ts Lot y velurn as ots | ORS p Sons £ mk Qe, effécient of R® means QU. of variation onclep Varfable P are accounted os BBour andl Crpttel Gefftctent f R *eletermination = 04409 ‘ Th | le Prceluctton of function sows that one tf tm [abou input, Gptlal remains Constant te ts | associated with O54. change ay itp Siovfoasty 4-f- charge in capital and (Bour GBouy remains | constant andl tk ts osssocierter| | with foasp f . Oats :en ee Combination Cabeuy Capital Culpud 4 t WW tes 8 2 10 \oo es 100 ¥ . § 1060 ; : Ms 100 Aso Quant map *- A grup ave Sel q 480 proud Curves Yepresentinn differnt levels of Culpat 0S cated iso -quant mop: A Fagher tso -quant Cure Shoe thre Figher (evel of Output “end? the wer vc of Js ~ quant represents fewer Qulpat Feakeres :- copes downward 8 from left © night () Donot ‘ tnlevsect adv Othey (p Q rot toudh the access: Note » ot Iso ~ quank Carve ts alo called dso preaeet -@) 2) = < Types of ho -quanks » Gnear Jeo - quants : “Mere 1 Perfect Sub flab Balt hy Bete 1 K : the Mpuls labour and” @pital when there Mm one and hy Possthe for tao Substitute tRerve iso quanis take, St1AIGFt Cine AW Comptes! k 3| a9 erm : Neat staged 8 Sore Dees Shaped 130 -quanls ;- Units when the Producten function Ras no Sepe fox SuBsttuaBility ancl ffzedl Proporten of inpeits thot means (bey and Gpttal oy empbyce the te -quants formed Raped ones C. Foped i390 - quants are cB calted night ange Curve + “39, C300) Iq, C200) —— 3g, C100)a - (3) Hinkel * door qua = Fix when there i that is Tfrrrel = Chiptlal” dite ff ‘ CRoice of Folk fa bamant Goptlal fa tw. me production lhe 190 ~ quants ove take Ktiked om eo Cosis:- AL represents different with th the procedure whitch con geky Zame New of amount of money, al a gven prices of focters The Greepts f isotost days that the same (uel Combteation of too foders vertable inplts abour ard @pital requires of -amaunt fer preductton Dlis vary with tm the prcclurch tor eff the production mereases Cosls are alo jveuediee | . Combinoten GBour @pttal total A fae 26 1000 gree 2 is 1000 wig Capt 3 . al p F & a 1000 % wee amet d cartel \e 3000 a“ ew °o pees -Marginal vate q techincal SiBsti tation Cmers) ‘ preclucfion ccre general | Tote > 2 y Taso vamable properion and production Funct on one voartavle tp CD aro = acekurns t- (T) The ‘Tefaifinshtp betuocen Ne Vornaible input and their Outputs the vrernaining Variable wputs wre Constant are Same is calted Tow d vaytavle - @ so Short yun Phe Reed fackors cannot Se chang td + @ Ahées Bao States that three ted productivity and wput fackors. they are. “Total product: 2. Clalboun Copter)+ precluced 2 vw th a giver t Qtr f + Mir 14 LF Hienal’ proctes py By ao firm by wducing ackitior g input Shape 4 Totat product and Marginal product are increases at thi tage ads at 3 Units of labour anf Gunts of lt tf fewye meveasing ‘veturr te tage Stage 5 Thi cal Pp) of Cusp at anol Margina YEMAINS Constenk This lage ends f 6 Unit f GBou urd & Untt Gpitat his |} Te bnstant - returns + x Pe Stase 2 é . f 3. TF tery c P) increa f tu Unite pita J d dnthe lao d ‘variable proporitor leno gf returns only Variable input ts taken arc! prod % dassified “inte TP, MP and AP Jn the Go f rehon Sale enfrauttor BEoun and Mprtal ave taken ex I ;OS TP ard mp (1) dalerna oro ics 2) Getlerral Geonames Sntemal Econom ics Nonogerial econemies Fforancial Martket ting eceromics Teehinice P Tecfinslegy Commerce C Ris te bean Reseach ard. clevdopmnent economic 9 Weetfelre Cooromnes Crterra? Ecorermis €torermics q Conlentration &q Sez Cspecia[ Scones zone Banermes of nfo atten, &qy~ air quali by test done by one Gompaing s used ey Other Companies Inthe fume veg . Scere o unttore i> €7- Statutory welfare measures probident fund, welfare — menayres according 4 Company “stack ete. 2 economics Of vesearch oncl develoement-Ges! a amount of expendita ihe qe cost vefers tc BerviceS 1 oO ccongme and incurred to produce product s dager OUT mater rel OSES ee ancl other el : , Tato chonge prot o cntytbulton Chang e h Sale, Sellvig priee f @ Gmpany Procluck 18 30 and Per Untk is yo. TRe total’ joreclechie 8 100 000 Units ancl the foxecl cst Varfable cast q 4Re Company Sys Is (okRe Cts0.000) CoPcula te PLY vedo and profil. SP 96 = 26,00 606 Nec ys ROY Oe $00, 006 1s D006 Profil. s 2S0,c0gKX 10¢ ty) PIV veto S92. 009 x19)" Bim /, 9600 (00 Break even poihks- Break St refers +o a sttuatton where the firm ab a Point. there is no profit and no loss even analysts A form %& setd do Be tn @ep te anditton is the total cost - +otfal revenue 8ePs WT. Qulput Tota etal fied Total? Total ‘ # cust ‘Yortoble Cos E Pucantitey evenue cre) @ostCTVC) CT ve + cTey TtRc) oO 6 300 ° 200 loo 4oo 300 300 600 s00_ 1Boold sed '@00 Joo 200 120@ 200 Yoo (206) 4oo \s00 206° 1209, qah¥og uh ay + , a 8 uv 2 even 4 uv aw wu 2 Breas even & v a4 8 Quedltty Rowen ry i{ om f% even bee Metriable tsi arc tolat zevenu ) as ffxecl and Ar { Cannot Be classtfted { } ert Verret ble Verna Bre ( ave yemains as | Nos 6 { fieeck costs anol tt 1s cipplfcable : 1S PAUSE on ec ec S TSX short seu duveelton only> i 6 Skable GY *Pepiitibue imetip soséttttorl sore ino mo cle CBe p cannot give accarate vesu lt s} st is “ppitcatton fH s ngle product rokifan ! og cot Determination ace ey Selling price = “Verfable cast +fteed cost + profit © Contebutton = Golfes-Lantable cost Cou) freed cost + proftl ow Ferecl cost-twss ©v Selling prtce - Vorfable ‘Cpesunt t) cos t CPper Unit @ Gontbutton per Unt « selltng prt ce Cpey Ut tk) ) i perv antk) “4 VortaBle coat Cper cnr ) CH Be C= fixedeost one. F @®_ BeP ie Untiss Fercedl cost / contriBeuttor, Margin Per UniL @ ace Sales volume = fixed ws ¢ J ontre Button ener, Th TRHOC PLY ret © dengin f SAfety C08) = Ackil sales - 4 a SE Psat, PC) vices Pacintts- Actual sales 1% Untts BEP Sikes in @® preftt] Gs = ContytBution, ~ fixed cost Une ts. ; (® preftt = Soles apreal ke cost fixed cost. structure eS Sales OXY * Ove Corry 'y Bolrtbatltoy — GS3Z (-) fixed cost Crnr)y XMS profe ty .7 |X 4 o ei —— eeAr firm fas fired? cost that is 40.00ve , Selling price perv Untt Sys and VanaBle Cost Per untt 3rs determine GE P in terms of untts ancl sales volume Cattulale Margin safety consider actucl producion emios) 8000 Untks Sales pex Untt = Sys Racer variable cost = Dt pesunt& ae ide as be: eae ep = trcedionse OH NBs S8 : Conextouttond untks eae =$,000 UNTES BEPiH Sales volume = fuced cone Ss Combrtoartton fc mo: Contribution f — . conbxt bakin moagtn tn rato sates wa eer s§ Giles volume = 19008 =asp00rs ou Mos = Actucd sates- @eesales 800 + SOOO = ZoCoUNeS fA wext{fcouion, Sales mult wih S = 18900 wen We 43 ec = z ao_O eor--——t—‘(—éSéh y © 8 FECELEL yy Achat sn é r ) 1 Maes (S,000 2 50x < 40.000 Si¢fexence If Ove 3 diupocy AHI. 9 16,00 ntbutten. 1é, ' ‘12,090 —— ie eo ™ lo ere) Prof = 6,009 weet A tech rail can corres mrmadimnars. f Bees PASEnGers Per anun, at a fore t UDO ys Vorréable ede Passengers is SOvS +The fixed cost Gre Ds lokA+s i Your tequiyec| +O terol BEP w terms f roof Passengers and : SH xexmse OUleckeor by reilucays. BEP Gnuntt) = feed cost hiekeaent acai . Contrtoation Jurit $ , = a Beep volume in Sales= fixed cast Ply va “ ¥ Sales prtce 00 ¥S \ Cost perv sors , conttatton a2S0ys * Ber = 28, 80,009 10,000 4 Iso | ply rato = Conkvilbalter, ee sales 5 1S9 = , 0-695 U6e25,090,000 O-G35S 4,00 090 Srikanth enter priges deals cofth supply f P Havel nore Ponts Computin Ae oe Cost dota Avaiible 8 too Perteds « Particulars year 4 eat Sales $0,000 420.000 fixedcost 2005 reo Vorszalole cost Bo “Ree Determine BER aL MOS Rok [mos profit/ pv rato} Sales v-t es £0, B00 30,000 Se — 20.006 Cac: '0,000 Profi & 1,000 De meas I S$ = 2000. soy 50,000 Mos = 10.000 ony + 28,000 wep, yLe fre PV vetfo Vail 120,005 -60.cO0 ———<——_ 6 0,000 ~2q, 900 4a, 00D Ply = Ce 6o,000 43g COO 2O¢ pos - 49000 , Nek profit ~ VLantatote * cCosk vantalele, ost Ont tbukton = DH =s } Sea] i) eed Ge saree Pix wala « =80,000 Ors 236 000 Desixed Untis - Ceo Se S Plant - vecluntt 290, OCOTUSG,O8D _ suQnD0 a ay a (SOOO UNE ES Se NBS cog See Cae (BO, 000x 4 = 16,20 000 SU9,000 Ge! Red cost 40,000 profit = Us0,000From dhe folhouoing dota calewola ort talew Volume and BER + Porekte hors Qs Direct material 6 Con & ( unt Direck faboun $2 Ces [unit Ftxed Over 30,099 heal Noxialole Overt heal is Go“ on ° dtveck \cibasy Cos & Sel it Prtce, aad Pex Untte htde atscount ar io Ul. 4f Sales ‘is eh anda /, oloove the break ern point dekermmine nek profi t- Sakce os (ve) i olen @re a oS Preft € 7OOU——_ Se Sales /uniy 25 Froud ltscount ore 100 ) Saleslents « a4 wv =i9 Cont butron a YEHtEILE ton Ouz 19 Diag DOM s OC a alta BS Cahn its )ebe a CJunits % tt “S80 8332 units BEPC, Sales} =e Cea * SO P]V Fatt > ee Cesx mH ratig, 22.0000 xo-2 ~ S000, Cae .c4p Peeteely rato < — e 25 COON AoE @€=¢23 £00 6 Got B c- Fe =P Ga ,soo-sGoog e (2 Oo &) Fi mone tool factory Fas a panned aa %000 Fours per fear Nanufacturt fescecl cost th $0,000 2 per cinnaum: St can preeluce foots f pPrecuct xan y ani it fas three Options. fo Make procuct MN Make product y I, Nake Some untis f x and some untls dy . Porticu bers Procluct %* Procuct y ae prece 250 UO Vertable cast 10.6 206 No- i of Fours - . C time taken € manufactive ) Annual demand Moo Goes Feat produck uot T manxtmize +h Compa ‘ze € net Profet sh Be and atse CoRutibe rae ¢ je OP Heum my . MUM prof? with Sales funt+ Be 7 NVee 250 a a Cloo) Yao —— Goo Nod Fi So “200° hai 3 hrs —5 r 5 | | Per Pours [22] -s0lhr ash = tol hy DOO xBAvs = Yooohrs untts Aso hrs ee 1s0ohes —s 4 7 Sox Ten . Mo me} &> f — % “ as pren : b ale Jt -cussnnie. 129 { 200° dr ai J} kno yp sbns x» 4 aslooscy G, 438,000 y.Pvborg oA. j oem rome ino ¥ % ote sos? sac, E bog dawhorg entire 3 ae eae ‘ ow . ore