Professional Documents
Culture Documents
Production Analysis 2
Production Analysis 2
Production Analysis 2
Long Run
All inputs are variable
Isoquants: From the table, it can be seen that 12Q can be produced with 1L and 5K, 1L and 4K, 3L and 1K or 6L and 1K.
The Relevant Portion of Isoquants. The economic region is given by the negatively sloped segment of isoquants between ridge lines OVI and OZI.
Q = ALaKb
where: Q = total production L = labour input K = capital input A = constant a and b are the parameters of labor and capital respectively. These values are constants determined by available technology.
Returns to Scale
Returns to scale refers to the degree by which output changes as result of a given change in the quantity of all inputs used in production.
Returns to scale
2004-05
2005-06 2006-07 2007-08 2008-09 2009-10
8.901
9.351 9.849 10.288 9.846 9.736
20064
21782 25476 28450 34552 43752
126857
138211 132973 128804 121295 116950
-17.61
0.20 -10.38 -2.41 -13.64 -15.10
3.73
5.05 5.33 4.46 -4.30 -1.12
Increasing
Increasing Increasing Increasing Increasing Increasing
ln (Q)
ln (K)
ln (L)
2004-05
2005-06 2006-07 2007-08 2008-09 2009-10
8.901
9.351 9.849 10.288 9.846 9.736
20064
21782 25476 28450 34552 43752
126857
138211 132973 128804 121295 116950
2.18616363
2.23548329 2.28736993 2.33097817 2.28706528
9.90668244
9.98883922 10.14549211 10.25590344 10.45022071
11.7508157
11.8365368 11.7979014 11.7660471 11.7059809
2.27583036
10.68629261
11.6695018
Company Profile
Steel Authority of India Limited (SAIL) have been working since January 19, 1954. It is one of the leading steel-making company in India. SAIL's wide range of long and flat steel products are much in demand in the domestic as well as the international market. This vital responsibility is carried out by SAIL's own Central Marketing Organisation (CMO) that transacts business through its network of 37 Branch Sales Offices spread across the four regions, 25 Departmental Warehouses, 42 Consignment Agents and 27 Customer Contact Offices.
Production Details
Capital Employed no. of Employees year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 (K) (rs. in cr) 18265 17045 16542 15271 20064 21782 25476 28450 34552 (L) 150832 147601 137496 131910 126857 138211 132973 128804 121295 Production (in million tons) (Q) 7.126 7.315 8.029 8.581 8.901 9.351 9.849 10.288 9.846
2009-10
43752
116950
9.736
Descriptive Data
Count Sum Maximum Minimum Mean Median Standard 10 89.022 10.288 7.126 8.9022 9.126 1.112755019 10 241199 43752 15271 24119.9 20923 9170.08784 10 1332929 150832 116950 133292.9 132441.5 10671.748
deviation
Regression Analysis
Regression Statistics
Multiple R
0.825430802
df
R Square Adjusted R Square 0.681336009
SS
MS
Significanc eF
0.590289155
Regressio n
0.103079
0.05154
0.0182669 7.483356 26
Standard Error
0.082989426
Observations
10
Residual Total
7 9
0.048211 0.15129
0.006887
Regression Analysis
Coefficients
Standard Error
t Stat
P-value
Lower 95%
Upper 95%
Lower 95.0%
Upper 95.0%
Intercept
12.4062558
-4.95260142
29.76511
-4.9526
29.76511
X Variable 1
0.105405824
-0.18885754
0.399669
-0.18886
0.399669
X Variable 2
-0.95656085
0.537485
-1.7797
0.118347
-2.22751038
0.314389
-2.22751
0.314389
Summary
To perform regression analysis the collected data has been transformed in to the logarithm form, than the regression analysis is performed which gives the following production function of the SAIL ln Q = 12.4063 + 0.1054 lnK + -0.9566 lnL
From the above result of the production function it is to conclude that the production of the SAIL is capital Intensive rather than the labour intensive The production function of the SAIL through the regression analysis which is helpful to understand that the production is capital intensive and it can also important to estimate the volume of production for the coming years.