Influences for Supply and Demand

Businesses work on a complex demand and supply based method of producing products and services.

  • Supply is the quantity of a good or service that a producer is offering to supply into the market
  • Demand is the quantity that the customers are willing to buy at a given price over a given period of time
  • External factors, such as income or environmental or ethical change may mean that a product is no longer viable, smoking for example is no longer as profitable as it was as people no longer smoke as much as they used to. Influences may be out of the businesses control.

Capture

You may notice demand is present in the what influences the demand section, while it would not be a good idea to present it in an exam, I thought it worth including at the bottom as it technically does effect demand, as people may buy a product to own one before everyone else. Promotion is also a very broad term, this also encompasses things like fasion events, tastes and Economy also includes factors such as income.

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Supply and Demand Competition

Supply of a product can generally be negated, as long as there is demand there will usually be a supply. Some mass markets, such as commodity items are often very unchanging and can have extremely thin margins to drive out competitors, this is known as a price war and can sometimes be more destructive to business profits than good as the product becomes devalued by the low price and people become unwilling to pay for the prices needed to pay for the product, however, this can sometimes improve the rate of the moving average as it forces businesses to increase their prices, usually at the same time to a higher-than-original value.That is one example of a price strategy (price war).

If there is no demand for a product, then there most likely will be no supply, as producers are not interested in creating a product that will not sell.

Demand and Supply Graph

A Supply and Demand graph shows the relationship between the two, the graph can be altered by shifting either to the left or right, depending on whether you want to increase or decrease either, just remember that,

Left is less…

So by shifting either to the left, you are decreasing them. A handy tool for showing equilibrium.

 

Capacity Utilisation

Capacity utilisation within a business can be easy or hard to calculate, for a printing shop, it is easy to calculate how many sheets they can produce per hour for example and in a metal fabricators, it is easy to calculate how many sheets of metal they can produce per hour, however for a company that has varied demand, it can be very hard to predict how much the business should utilise its capacity, a clearly noticeable example would be an understaffed restaurant, although they have staff working the shift, it is clear that they did not account for the demand that the customers require.

Capacity Utilisation = Actual level of output / Maximum possible output x 100

Productivity = Total output / Number of workers

Capacity utilisation should never be at 100%, as this could mean that if something were to fail, the business may not be able to fulfil the orders, Companies may choose to ask multiple ‘what if?’ questions that may indicate if the business may want to reconsider its utilisation levels.

  • What if the employment rate fell?
  • What if workers were too highly skilled?
  • What if forecasts are not conservative?
  • What if costs increased?
  • What if minimum wage increased further?

The Impact on EU Trade Imports and Exports vs Capacity Utilisation

For UK Businesses, there is a handy acronym when working with exchange rates, SPICED. ‘ strong pound imports cheap, exports dear ‘. This applies to any companies in the UK who may wish to export or import goods from elsewhere.

If the UK were to leave the EU, the cost of imports/exports could be greater/lesser depending on the trade deals we could secure with countries.

  • Specialised workers would find it harder to move freely into the UK.
  • Tariffs are not imposed in the EU, tariffs could cost businesses money, however it could be argued that they increase competition.
  • The Common Market could potentially be lost.
  • The work ethic of some foreign national employees could change.

These factors could all affect the overall capacity utilisation of UK companies.

 

Trade-offs and Opportunity Cost

What is Trade-offs and Opportunity Cost?

Trade-offs are choosing one thing over another, if you choose to invest in paint over pencils, your opportunity cost, is that you can no longer colour with pencils. This is a poor example, so lets look at some real data so we can get a good understanding of what opportunity cost is really about, and for that we need an example.

Nails and Hammers LTD.

A company, called Nails and Hammers LTD, produces hammers and nails, they have a good reputation, but are not really known, they also manufacture their hammers cheaply and therefore some of them are not exactly to the highest quality. in their first year, they only sell 100 units, this is barely enough sales to keep the business going, so they decide to invest in one of two strategies. Investing in Machinery, in order to produce better quality hammers, or Invest in Advertising, to get the word out about their Hammers and Nails. They decide that they will spend $300 dollars in the second year and see how it goes. They do their market research and come up with these two graphs.

 

tradeoffs and opportunity cost of both types proving advertising is optimal

 

It can be seen from these graphs, that investment in advertisements will produce more sales than investment in machinery, therefore investment in Advertising is the way forward for Nails and Hammers LTD. This is called a trade-off, without the graph, it wouldn’t be known which is better for sales until the second year had ended. The same investment of $300 produced more sales. Lets, look at more data.

Opportunity Cost

Opportunity cost is essentially what you could have won if you had invested in something else, if you can only learn piano or tennis, and you choose piano, the opportunity cost is that you could have learnt tennis.

Trade offs and Opportunity cost orange showing 200 after 3rd year

Let’s take our previous example, and pretend that we invested in the lesser option, Machinery, we can see that we didn’t make as much as we would have if we had invested in Advertising. The opportunity cost in the third year would have been 200, because the investment in advertising, produced 700 sales, minus our 500 sales.

 

Advantages and Disadvantages of a Public Limited Company

What is a Public Limited Company?

A Public Limited Company is a business that has decided to offer it’s shares on the public stock market. The Stock Market is where anyone can invest in a Public Limited Company. These are usually high value, large businesses that can have massive profits, and offer dividends to those who invest.

In order to become a Public Limited Company, PLC, you need;

  • At least two directors.
  • A Secretary
  • And you must float at least $50,000 shares on the stock exchange, to become a PLC.

Unlike other businesses, a PLC is often owned by a board of directors, that dictate the decisions of a business. PLC’s must also pay Dividend, which is money that the investors receive from the business, determined by their share value. As PLC’s have external influences, they also fluctuate in value and therefore can loose money. Some businesses owners also find that they can loose control. Being a PLC can bring in more capital and make the business more known publically on the sock exchange.chart market up of public limited company

For contrast, to become a Sole Trader. All you have to do is contact HMRC (Her Majesty’s Revenue and Customs) and every year fill in a self assessment. An LTD must send a Memorandum of Association and Articles of Association. For this reason it becomes a lot harder to do so and often people will employ a Secretary. To be a PLC can take lots of time and can sometimes not be possible for companies with a very bad image. Companies also may struggle if they are unreliable or have seasonal traits, such as a manufacturer of Christmas gifts.

Advantages of a Public Limited Company

  • Having Shares will fund expansion, allowing the business to grow.
  • This also raises company profile.
  • The business can raise a lot of capital because there is no limit for shareholders to invest.
  • Shares are transferable, so investors can split profits.
  • You can get input from investors.
  • Investors may try to grow the business, through things like discounted advertising, if they own part of another business.

Disadvantages of being a Public Limited Company

  • There could be a possible loss of control, as people may find that shareholders own over 50% of the shares, entitling them to the ownership of the business. This is also known as a divorce of control.
  • Shareholders may have other plans to maximise profits over social and ethical goals.
  • Share prices could collapse.
  • There are a lot of legal formalities.
  • Fluctuations in share price could make a company worthless overnight.
  • PLC’s are hard to maintain. As they are usually large, often everyone has their own ideas.
  • Some companies may be overvalued.
  • Some do not have $50,000 worth of shares to float.

A PLC is usually for large companies. Small businesses will not always expect to grow, Corner shops for example, will not grow beyond what is possible due to the local footfall. Therefore PLC’s are often global businesses.

Bukkit has been given a DMCA takedown by Wesley Wolfie. The NEXT steps.

It is currently well known that bukkit has been given a dmca request by Wesley Wolfie, but now that that has happened, we now need to rebuild!

So here is whats happening, the folks over from bukkit are now working on a new modding api, called sponge! currently ‘Sponge will start with Minecraft 1.8, with Vanilla Client Support on Forge.’

Old plugins that were written on bukkit will most likely have to be removed, unless someone finds a way to make them compatible with sponge.

Here is a large extract of what they plan to do.

Our ultimate goal is to create a modding API that is easy to use for owners of small servers for friends and family, owners of large servers, and everyone in between. In addition, we also plan to permit client modding.

  • Sponge mods should work across several different Minecraft versions without needing an update from the developer, which means that you don’t have to worry about all your mods breaking between each new major release of Minecraft (1.6, 1.7, 1.8, etc.).
  • Sponge will support official interoperability with Forge so you can use both Sponge mods and Forge mods together. We are working directly with the Forge team.
  • While Sponge will not be directly supporting Bukkit, community projects have been started that aim to provide complete support for existing Bukkit plugins on top of Sponge

the whole plan can be found here

 

Good Luck to you all

 

EDIT, also check out PROJECT RAINBOW, they currently have downloads and plugins up for grabs.