ECONONE PPT.pptx
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Transcript of ECONONE PPT.pptx
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8/11/2019 ECONONE PPT.pptx
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KWAGO &FRIENDS
JOURNEYTOPETRON
LOADING
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LOADING
PETRONS MAIN PRODUCTS AND
SERVICES
PETROLEUM PRODUCTS
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PETRONS REQUIRED
RESOURCES
LABOR RESOURCEDIRECT
Technician
EngineersPlant Operators
INDIRECT Administration Staff
AccountantsSupply Management
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PETRONS REQUIRED
RESOURCES
RAW MATERIALSCrude oil
EQUIPMENTRefinery
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HOW DOES THE COMPANY DECIDE ONTHE AMOUNT OF RESOURCES THAT
ARE EMPLOYED?1. Based on projected output goal set by thecompany for the year 2. Based on income
3. Based on demand (did the number of carsincreased in 2010-2011?)
If for example, the companys projected demand is one
million liters of crude oil for the year, the company willdetermine how much raw materials will be imported,since crude oil is imported from other countries.
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HOW DOES THE COMPANY DECIDE ONMATTERS INVOLVING THE PRODUCTIONPROCESS OR IN RUNNING THE BUSINESS?
by consulting all departments involvedProduction department- decides on how goodswould be produced with acceptable quality Marketing department- strategizes on how the
products would be soldFinance department- manages the manages ofthe company (where to get money forexpenses incurred)
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WHAT ARE THE COSTS INCURRED INTHE PRODUCTION PROCESS?
1 Raw materials (crude oil) 2 operating expenses
3 salaries and wages 4 overhead expenses (other expenses) 5 utilites expenses
6 depreciation expense
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WHAT ARE THE FIXED COSTS?VARIABLE COSTS?
FIXED - equipment (distillationunit)
VARIABLE- raw materials(crude oil, additives, otherchemicals), utilities
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INFORMATION DO THEY LOOK AT TOMAKE DECISIONS ON THE
PRODUCTION PROCESS OR INMINIMIZING COSTS?
Production process projected
demand Minimizing costs- costs of rawmaterials and selling price
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HOW DO THEY DECIDE ON THE PRICEOF THEIR PRODUCT/SERVICE?
Cost of raw material Desired profit
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WHO MAKES UP THEIR MARKET?
Petroleum consumers Vehicle owners, powerplant,
industries utilizing fuels (e.g.factories), household (LPG),shipping industries, airlines,governent (e.g. asphalt forinfastractures)
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HOW IMPORTANT ISUNDERSTANDING ECONOMICS INYOUR FIRM'S OPERATIONS? INOTHER ASPECTS OF YOUR FIRMSUCH AS MARKETING, BRANDING,EMPLOYEE TRAINING, FINANCE,ETC?
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Very important. It would be help thecompany to plan its business in such away that it will realize ithe desired profitor to maximize the profit. BRANDING - for competition, brandname recall (madaling tandaan ng tao)EMPLOYEE TRAINING- exactnumber of employees to be employedshould be determined so that theexpenses involved would not exceed.Companies need employees in order to
produce the desired volume of products.