Competency

Understand economic terminology and economic definitions pertaining to decisions made by managers.

Course Scenario

Oil Company X is a large oil refinery which has been expanding and taking on new investment projects. Recently, they have considered building a pipeline that stretches across the United States, from Canada to New Orleans. As an alternate investment, they are considering increasing production at existing facilities.

In order to compare these investment opportunities, the head of the Cost Analysis Department has tasked you with finding the profit maximizing quantity and price if production continues at existing facilities. You will then present this to the head of the department in a meeting, along with supporting documentation such as cost curves, data tables, and equations.

Instructions

As a Cost Analyst at your firm, you are being asked to evaluate the profit maximizing quantity and price for your product to submit to your manager. Assume that your firm is a monopoly supplier of oil in your region, due to extensive trade restrictions.

Another team member in the Cost Analysis Department has compiled the necessary data in the linked spreadsheet. You will have to complete the missing columns for ATC, AVC, and MC. If the company is incurring a profit, include the amount of the profit earned when quantity and price are maximized. If your company is incurring a loss, prove whether it should shut down or continue operating at a loss. Use graphs and equations to support your argument.

You will create a short screen recording with narration arguing your case to your manager. Create a PowerPoint presentation to support your recommendation which can serve as the visuals for your recorded screen capture.

There are many free screen recording software/Webware options available (such as Screencast-O-Matic) to use in presenting your PowerPoint. Make sure that both your voiced narration and the PowerPoint slides are captured during your screen recording.

Be sure to include a cohesive introduction and conclusion of your findings. Your body slides should include any relevant curves created in Excel from the data spreadsheet.

After recording, paste a link to the recording on the last slide of the PowerPoint presentation. Attach the PowerPoint presentation as well as the Excel spreadsheet showing how you created the curves and obtained the profit maximizing quantity and price, as well as the corresponding profit or loss.

Format your PowerPoint to include a title page, introduction, body slides, conclusion, and references. Remember to cite your sources using correct APA format, and also use correct grammar, spelling, and formatting.