In your final project, describe and answer in economic terms a managerial decision you have knowledge about (for example one that has to be made at your place of employment). Some examples of decisions are: Should our company hire temporary workers or hire new workers to handle increase demand for our product? Should we buy a new machine or upgrade the old one? What is the optimal level of parts we should order and keep on the shelf? Should we lease or buy a car? Should we rent or buy a house? Should I start a new business?Note that each of the questions above can be answered in a single sentence. The answer has implications that should influence future actions. In other words, the answer is meaningful and useful. In your answer, use economic language in a manner that demonstrates your understanding of the concepts of this course. This means use economic language correctly, but also briefly explain the economic terms and concepts.
(Do not write for experts in business and economics). Your paper should have the following major sections with appropriate section title.Executive Summary – The very first sentence of the very first paragraph of the paper and this section should give the answer to the question, don’t make your reader hunt for it. Explain why this answer is meaningful or useful. Definition – This section defines the managerial question to be analyzed. It also identifies the possible opportunities and alternatives being evaluated. Factors or Costs – This section describes and identifies factors or costs that will influence the analysis of the questions.This section also includes factors and costs that may seem important (and are important for other questions) and explain why they are not important to this question.
For this course, you may limit yourself to the ten most important factors or costs (you should have at least this many). At least three of them should be implicit and at least another three should be explicit. Also at least two should not be important to this question and at least six should be important to answering this question.This section is to demonstrate your understanding of what makes a cost or factor relevant to economic reasoning. Measurement – This section states how the factors or costs from the previous section are to be measured and the values you plan to use in your analysis (or range of values). In this section you may state the reliability of the number.
For example, I don’t expect you to include every possible value of a factor, you may make assumptions. If you make an assumption about a number how likely is it to change, and/or how comfortable are you with the stability of the number.For this paper, feel free to make many assumptions about the value in this section. The goal of this paper is to demonstrate your ability to apply economic reasoning and not get the correct answer (or politically correct answer).
If you apply good reasoning, your answer may be wrong because of a poor assumption. For this course that is acceptable. With experience, your ability to make good assumptions will improve. Analysis – In this section you use the measurement from the above and apply good economic reasoning and solve the problem.Explain what method you’re going to apply and why this method is appropriate (This is to demonstrate that you understand the economic concepts). Summary – This section states your observations about the process.
You have an answer, based upon the reliability of the measurement of the factors or costs how likely is that answer to change. You may want to identify some (not more that three) assumptions that if their value were different would give a different answer. For example, buying a house versus renting may the choice when interest rates are 5%, but if they go to 20%, renting may be the better choice.