Assignment 2

Assume you have been hired as a 

managing consultant by a company to offer some advice that will help it make a 

decision as to whether it should shut down completely or continue its 

operations. It currently uses 100 workers to produce 6,000 units of output per 

month (working 20 days / month). The daily wage (per worker) is $70, and the 

price of the firm's output is $32. The cost of other variable inputs is $2,000 

per day. You are told that the firm's fixed cost is “high enough” so that the 

firm's total costs exceed its total revenue. The marginal cost of the last unit 

is $30.  (Ch 7 & 8 to solve)



This assignment allows you to determine 

the specific details about this fictitious company in order to conduct an 

environmental scan of this company.  



Write a three to four (3-4) page 

paper in which you:



1.	Briefly describe the details of the fictitious business that you created for 

this assignment.

 

1.	Assess the current environmental scan factors that are relevant to the 

decision making process. Determine the factors that will have the greatest 

impact on plant operations and management’s decision to continue or discontinue 

operations. Provide a rationale for your determination.

 

1.	Evaluate the financial performance of the company using the information 

provided in the scenario. Consider all the key drivers of performance, such as 

company profit or loss for both the short term and long term and how each factor 

influences managerial decisions. Be sure to show the calculations that helped 

you reach your conclusions. 

 

1.	Recommend how the company can improve its profitability to deliver more 

value to its stakeholders. Then, develop a brief plan to implement the 

recommendations. 

 

1.	Assess the circumstances in which the company should discontinue operations 

and how management should react when confronted with these circumstances. 

Provide a rationale with your response. 

 

1.	Use at least three (3) high-quality academic resources in this assignment. 

Note: Wikipedia and other Websites do not qualify as academic 

resources.



Your assignment must follow these formatting 

requirements:



•	Be typed, double-spaced, using Times New Roman font (size 12), with one-inch 

margins on all sides; citations and references must follow APA or 

school-specific format. Check with your professor for any additional 

instructions.

 

•	Include a cover page containing the title of the assignment, the student’s 

name, the professor’s name, the course title, and the date. The cover page and 

the reference page are not included in the required assignment page length.