ECONONE PPT.pptx

8/11/2019 ECONONE PPT.pptx

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KWAGO &FRIENDS

JOURNEYTOPETRON

LOADING


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LOADING

PETRONS MAIN PRODUCTS AND

SERVICES

PETROLEUM PRODUCTS


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PETRONS REQUIRED

RESOURCES

LABOR RESOURCEDIRECT

Technician

EngineersPlant Operators

INDIRECT Administration Staff

AccountantsSupply Management


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PETRONS REQUIRED

RESOURCES

RAW MATERIALSCrude oil

EQUIPMENTRefinery


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HOW DOES THE COMPANY DECIDE ONTHE AMOUNT OF RESOURCES THAT

ARE EMPLOYED?1. Based on projected output goal set by thecompany for the year 2. Based on income

3. Based on demand (did the number of carsincreased in 2010-2011?)

If for example, the companys projected demand is one

million liters of crude oil for the year, the company willdetermine how much raw materials will be imported,since crude oil is imported from other countries.


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HOW DOES THE COMPANY DECIDE ONMATTERS INVOLVING THE PRODUCTIONPROCESS OR IN RUNNING THE BUSINESS?

by consulting all departments involvedProduction department- decides on how goodswould be produced with acceptable quality Marketing department- strategizes on how the

products would be soldFinance department- manages the manages ofthe company (where to get money forexpenses incurred)


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WHAT ARE THE COSTS INCURRED INTHE PRODUCTION PROCESS?

1 Raw materials (crude oil) 2 operating expenses

3 salaries and wages 4 overhead expenses (other expenses) 5 utilites expenses

6 depreciation expense


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WHAT ARE THE FIXED COSTS?VARIABLE COSTS?

FIXED - equipment (distillationunit)

VARIABLE- raw materials(crude oil, additives, otherchemicals), utilities


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INFORMATION DO THEY LOOK AT TOMAKE DECISIONS ON THE

PRODUCTION PROCESS OR INMINIMIZING COSTS?

Production process projected

demand Minimizing costs- costs of rawmaterials and selling price


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HOW DO THEY DECIDE ON THE PRICEOF THEIR PRODUCT/SERVICE?

Cost of raw material Desired profit


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WHO MAKES UP THEIR MARKET?

Petroleum consumers Vehicle owners, powerplant,

industries utilizing fuels (e.g.factories), household (LPG),shipping industries, airlines,governent (e.g. asphalt forinfastractures)


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HOW IMPORTANT ISUNDERSTANDING ECONOMICS INYOUR FIRM'S OPERATIONS? INOTHER ASPECTS OF YOUR FIRMSUCH AS MARKETING, BRANDING,EMPLOYEE TRAINING, FINANCE,ETC?


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Very important. It would be help thecompany to plan its business in such away that it will realize ithe desired profitor to maximize the profit. BRANDING - for competition, brandname recall (madaling tandaan ng tao)EMPLOYEE TRAINING- exactnumber of employees to be employedshould be determined so that theexpenses involved would not exceed.Companies need employees in order to

produce the desired volume of products.

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ECONONE PPT.pptx