economic costs and the ability to measure them are the necessary steps for more
effective profit planning, cost control and sound pricing practices.
Production analysis is narrower, in scope than cost analysis. Production
analysis frequently proceeds in physical terms while cost analysis proceeds in
monetary terms. The main topics covered under cost and production analysis
are: Cost concepts and classification, Cost-output Relationships, Economics and
Diseconomics of scale, Production function and Cost control.
Pricing Decisions, Policies and Practices :
Pricing is an important area of business economic. In fact, price is the
genesis of a firms revenue and as such its success largely depends on how
correctly the pricing decisions are taken. The important aspects dealt with under
pricing include. Price Determination in Various Market Forms, Pricing Method,
Differential Pricing, Product-line Pricing and Price Forecasting.
Profit Management :
Business firms are generally organised for purpose of making profits and
in the long run profits earned are taken as an important measure of the firms
success. If knowledge about the future were perfect, profit analysis would have
been a very easy task. However, in a world of uncertainty, expectations are not
always realised so that profit planning and measurement constitute a difficult
area of business economic. The important aspects covered under this area are :
Nature and Measurement of profit, Profit policies and Technique of Profit
Planning like Break-Even Analysis.
Capital Management :
Among the various types business problems, the most complex and
troublesome for the business manager are those relating to a firm’s capital
investments. Relatively large sums are involved and the problems are so
complex that their solution requires considerable time and labour. Often the
decision involving capital management are taken by the top management.
Briefly Capital management implies planning and control of capital