In my prior work at a technology company

docx

School

Cornell University *

*We aren’t endorsed by this school

Course

3220

Subject

Economics

Date

Nov 24, 2024

Type

docx

Pages

Uploaded by brayobrach

In my prior work at a technology company, I faced a major decision-making scenario with considerable opportunity costs that should have been considered. The decision involved launching a new product line. The corporation introduced this product line because it believed it could generate significant income and broaden our market reach. In retrospect, a more thorough examination should have considered advantages and opportunity costs (Froeb et al., 2019). The launch of the new product line was driven by market demand and the chance to obtain an industry edge. The corporation thought broadening our product line would attract more customers and boost profits. Market research showed a growing need for such products, and not entering this market would result in lost income and market share. The corporation missed numerous important opportunity expenses when launching the new product line. First, product development, marketing, and distribution received major funding. These funds may have been used to improve and expand our product ranges or fund future innovation. The potential reward from alternative investments is the opportunity cost. Launching the new product line took tremendous employee time and effort (Froeb et al., 2019). Staff were diverted from ongoing projects and customer assistance to work on the new product, which hampered customer service and delayed project progress. This opportunity cost could affect the company's long-term profitability by reducing consumer pleasure and loyalty. The corporation should have included opportunity costs in its cost-benefit analysis. It should have evaluated the long-term benefits of reallocating resources to develop and expand product lines and meet consumer satisfaction. If the corporation reallocated resources instead of launching the new product line, numerous substantial financial ramifications would arise. First, investing financial and human resources in product line improvements and research and development may have increased sales

by 15%, or $5 million. 2. Focusing on customer service and support might have reduced customer churn by 10%, saving $2 million in income (Froeb et al., 2019). Finally, the corporation could have saved $3 million by skipping product development, marketing, and distribution for the new product line. These improvements may have increased profits by $10 million by reallocating resources and prioritizing customer pleasure over the new product line. These factors suggest that not pursuing the new product line could result in $10 million in profit from existing product lines ($5 million), retained revenue from higher customer satisfaction ($2 million), and cost savings ($3 million). The new product line's launch, driven by revenue growth, ignored resource allocation and customer satisfaction opportunity costs (Froeb et al., 2019). An in-depth analysis of these opportunity costs would have likely led the company to rethink its strategy. In this hypothetical scenario, reallocating resources to improve existing product lines and prioritize customer satisfaction could have increased profits. This scenario emphasizes the importance of opportunity costs in decision-making for long-term success and profitability. References Froeb, L. M., McCann, B. T., Ward, M. R., & Shor, M. (2019). Managerial economics. Cengage learning.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Related Documents

Tapping into New and International Markets -.docx

Quiz 6 Q 16.png

Microeconomics - Milestone 3 (17).pdf

Screenshot_2023-12-13-18-03-51-06_13_12_2023_18_08.png

15.docx

Assessment 5 (page 3 of 10).pdf

Final Milestone-80.pdf

8.docx

Screenshot (132).png

CLASS ACTIVITY FOR ECONS SS2 CHANGE IN DEMAND AND QUANTITY DEMANDED..docx

LJ 1.docx

Speakers notes.edited.docx

Recommended textbooks for you

Managerial Economics: Applications, Strategies an...

Economics

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Cengage Learning

Microeconomic Theory

Economics

ISBN:9781337517942

Author:NICHOLSON

Publisher:Cengage

Microeconomics A Contemporary Intro

Economics

ISBN:9781285635101

Author:MCEACHERN

Publisher:Cengage

Economics:

Economics

ISBN:9781285859460

Author:BOYES, William

Publisher:Cengage Learning

Economics (MindTap Course List)

Economics

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Cengage Learning

SEE MORE TEXTBOOKS

Recommended textbooks for you

Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Microeconomic Theory
Economics
ISBN:9781337517942
Author:NICHOLSON
Publisher:Cengage
Microeconomics A Contemporary Intro
Economics
ISBN:9781285635101
Author:MCEACHERN
Publisher:Cengage
Economics:
Economics
ISBN:9781285859460
Author:BOYES, William
Publisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning