Collecting Information

I have seen that there are a number of methods available to collect data and uses as sources, including, surveys, sensors, internet and printed source. I think that surveys are a good method to use, as they can give you an overall idea of what people think about your question. However, I feel that it can be hard to generalise any results that you find which means that they are not representative of the population as a while. Also, in making your results more accurate using this method is costly and time consuming. Using sensors as a method of data collecting is a good method because it gives you accurate data, which is quantitative, this is because the answers are usually numbers, they are not options, this means that the data is easier to analyse. This is because they can be shown on graphs, plus these readings are accurate as they are measured by a computer and can be precise. The internet can be used as a source to collect information, this is because there are vast amount of data available including statistics, for example from The Office for National Statistics and The CIA Fact Book. The advantage of using this is your method to collect data is that it is already in a form that the computer can understand. However, it is relatively easy for anybody to created a website and add information to it. This data can sometimes not be true. This means that you have to make a judgement as to how much you can trust a source that is found on the internet. I feel that some sources can be trusted more than others, for example those produced by government agencies. You can also use the printed source as a method of collecting data. The advantage of using this method is that most of the information printed can be trusted as they are checked and edited, and you can use an index to find exactly the information you desire, instead of having to go through many web pages, which often does not contain relevant information. The method which I prefer to use is the printed word, this is because information can often be found easier and quicker as you are able to use index pages, and what the book says it is about if often what it is. For example the internet pages, do not always contain the information they say they do.

Discussion Point

What is the problem from the company’s point of view?
The problem from the company’s point of view is that it is now struggling and that it is running currently at an overall loss. This is because now total costs had exceeded revenue, this means that there was more money going out than there was going into the company.

What is the problem from Neil’s point of view?
The problem from Neil’s point of view is that his job may be on the line. This is because he knows that money has to be saved and already some members of staff are loosing their jobs and being made redundant. In addition, Neil has to decide which member of staff to loose their jobs because he had been given that task.

Is Jill’s reading of the situation correct?
Jill’s reading of the situation is correct because from the graph provided, I can see that salaries have increased the most and that costs excluding salaries have not increased much over the period. I feel that these costs will have grown inline with inflation. She if reading the situation correct, as these are the most expensive cost, as if the wage bill can be decreased, this will be advantageous to the company.

Is the plan of action Jill proposes likely to be successful?
Jill’s plan of action is likely to be successful because she will be cutting on the biggest costs that the company faces. However, cutting jobs mean that there will be less staff to carry out the necessary work, and it is unlikely that production will decrease. Also making staff redundant can be costly, and may ruin the company’s reputation. In addition, staff will be worried as they may loose their jobs.

Apart from a reduction in the wage bill what other effects could Jill’s plan of action have?
The other effect that Jill’s plan of action may have is that there will be less staff to carry out the necessary work, and it is unlikely that production will decrease. Also making staff redundant can be costly, and may ruin the company’s reputation. In addition, staff will be worried as they may loose their jobs, because of this some may decide to resign and find another job where there is increased job security. This many demotivate staff.

What other courses of action could be taken?
Other courses of action which could be taken included reducing the number of days the factory is open, for example just having a four day week, this will cut the wage bill and the variable costs. They could also try to increase production, this will mean that there will be more products to sell and this should not affect the fixed costs such as wage bill.

What are the likely effects of these courses of action?
The likely effects of the first course of action is that staff may be demotivated and look for alternative work, and the second will mean that there is more revenue coming into the business, hoping to reduce the gap, and make the company profitable.

Fixed and Variable Costs

Fixed costs don’t change with output. Rent on a factory, business rates, manager’s salaries and the cost of new machinery are fixed costs. When output increase, a business makes more use of the facilities it’s got – the cost of those facilities does not change. Indirect costs can’t be directly linked to only one product or service.

Variable costs rise and fall as output changes. Hourly wages, raw materials and packaging costs for each product are variable costs. Direct costs are directly linked to a product or service.