QUESTION 3) How do competition and failure of the enterprise interact with principle of cost analysis and estimating? Discuss.
Cost analysis takes an integral part in the competition and failure of the enterprise. Factors such as labor requirement, cost to the manufacturer, forecasting of profit, design or technology, improvement in product, time skill and experienced management are directly related to the cost analysis, best and proper method of analysis can only leas to the success of the enterprise.
QUESTION 4) How would you define profit? Discuss fully what the consequence of negative profit (loss)? How can profit be rendered appealing to the individual?
Profit can be defined as the difference between the total revenue generated and total cost.
Consequence of negative profit (loss)
Loss can have an adverse effect on the business in a variety of ways and this includes but not limited to;
1. Loosing share holders as share holders will sell their shares if the company is making losses.
2. Insecurity or employees losing their jobs.
3. Uncertainty over the future of the business
4. Image distortion of an organization as investors and clients won’t want to associate with the organization.
How profit can be rendered appealing to the individual
When a business is making profit, it can have a number of positive influence on both staffs and investors and this includes;
1. It encourages the employees to put in more effort as they know their past efforts yielded a positive report.
2. Salary increment and incentive gaining can be highly envisaged.
3. Chances are high that the company expands with new business dimension.
QUESTION 5) List positive and negative results of failure in business. Should government prevent business failure? Does company size and political power affect your answer?
Positive results of failure in business
1. You learn from it
2. Unrealistic expectation
3. It gives you confidence to overcome your fear as that’s the worst that can happen
4. Unobtainable Perfection
Negative results of failure in business
1. Improper money management
2. Insecurity for the future
3. Investors and management lose focus
4. Investors lack confidence in the business
5. Improper money management
Yes, the government should prevent business failure by adopting more practical laws, better rules and regulation that encourage business development, setting up facilities such as good transport system and possibly cutting down taxes.
Yes, the size of the company and political powers affects the business in failure. Money management cannot be properly done and there is always a feeling of insecurity due to improper or unbalanced supply and demand cycle.
QUESTION 6) How do economic laws and physical laws differ? Are they well-ordered cause-and-effect relationship separable in business and engineering field?
Economic laws are different from physical laws in that it relates to activity of humans in the society while physical laws deal with things that are lifeless. The action of men is numerous and unclear; hence, no certain assumptions can be concluded from them but on the other hand, physical laws are purely descriptive as they always adapt to a definite conditional contingent behavior. Physical laws are resultant of certain, definite, and universal truth.
Yes, they are well ordered pros and cons relationship separable in business and engineering field.
QUESTION 7) Describe how computers have improved “back-of-envelope” techniques in cost analysis.
A back-of-the-envelope is a rough computation specifically jotted down on any available scrap of paper like envelope. It is more likely a guess however less than an accurate computation of mathematical proof. It is less detailed but provides precise results. This can be done quickly. With the improvements in computing power, reductions in computing costs, and increase in computing speed have thus come together to transform the back of the envelope’ techniques. People can use more sophisticated techniques for cost analysis because such technique allows real time complex calculations. There are several algorithms programmed into computer to carry tough calculations that were not possible before.
QUESTION 8) Relate the role of cost analysis and estimating to design engineering, contrast this role.
Cost analysis plays an important role in design engineering as it could either be directly or indirectly related to design engineering. A good and improved design is uneconomical if the cost is not properly analyzed. If the cost is not properly analyzed, the operational and maintenance cost can be much higher than envisaged that it becomes impossible to use the design. On the other hand, design engineering needs to satisfy the economic want which can only be made possible by cost analysis.