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Assignment 4: Automotive Production Levels

 

Due Week 10 and worth 440 points

 

For this assignment, choose a major publicly traded automotive producer, such as General Motors, Ford,

 

Toyota, or Volkswagen. Then, research this company’s production and inventory levels, and operational

 

cost information, along with price and sales data for the most recent quarter available.

 

Write a seven to nine (7 9) page paper in which you:

 

1. Create a demand supply analysis based on the data you collected on your chosen company’s

 

price and sales, which demonstrates the relationship between price and quantity demanded.

 

2. Determine the equilibrium price and quantity and explain its meaning to your chosen company.

 

Indicate how your chosen company’s management should use this information to make sound

 

strategic decisions.

 

3. Calculate the elasticity of demand for your chosen company’s automobiles (or choose a specific

 

make / model). Interpret what the demand tells your chosen company’s management team.

 

4. Speculate what may happen to your chosen company’s specifically if the elasticity of demand

 

calculated above represented a competitor of your choice instead. Provide support for your

 

response.

 

5. Create a cost analysis and graph. Include total cost, total variable cost, marginal cost, and fixed

 

costs, along with any other costs you believe are valuable to the cost analysis.

 

6. Create a total revenue schedule, marginal revenue schedule, and a graph representing both.

 

Interpret what the graph tells your chosen company’s management team.

 

7. Determine the profit maximizing level of output by assessing the actions your chosen company

 

should take if it is to continue to maximize profits.

 

8. Assume your chosen company wants to expand its operations which involve capital budget

 

decisions. Recommend two (2) different and appropriate cost related tools. Provide support for

 

your recommendation.

 

9. Now, assume your chosen company wants to expand its operations globally into a new market.

 

Suggest two (2) strategies the firm should consider. Provide support for your suggestions.

 

10. 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.

 

The specific course learning outcomes associated with this assignment are:

 

• Evaluate the profit maximizing price and output level for given operating costs for monopolies and

 

firms in competitive industries.

 

• Propose how differences in demand and elasticity lead managers to develop various pricing

 

strategies.

 

• Apply the concept of how changes in the macro environment affect individual firms and industries

 

through the microeconomic factors of demand, production, cost, and profitability.