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Effectiveness. You are looking at achieving the required objectives for example achieving the desired quality of goods.
Effeciency is the relationship betwen the input and the output. That is making the most from the input (to get the maximum output). In this sense we are talking about ensuring no wastage of raw materials or idleness from staffit is fundamental rethinking which will result in dramatic improvement of the process. it begings from zero based and assumes nothing by asking ourself, why do things like this( in reference to the process). It may result in jobs being combined, work is perfomed where it makes sense(add value) therefore eliminating non value adding activities. Workers are encouranged to make decisions…………….
ARRANGE THE VARIABLE COSTS AND FRANCHISE FEES IN MATRIX FIRST.
ASK YOUR SELF, IF THE VARIABLE COST IS $5, WHAT IS THE MAXIMUM NPV? AND THEN SUBTRACT THE AMOUNT YOU WILL LOOSE IF CHOSE A DIFFERENT FEE. I.E THE MAXIMUM NPV IS 4348226 AND YOU WILL LOOSE NOTHING ON FEE 18 ANDYOU WILL LOSE 340596(4348226-4007630) AND YOU WILL LOOSE 74043 (4348226-4274183)IF THE FEE IS 22 AND YOU CAN DO THE SAME FOR OTHER VARIABLE COSTS AND ONCE COMPLETE CHOOSE THE MAXIMUM YOU WILL LOOSE FROM EACH FRANCHISE FEE AND THEN LOOK FOR THE MINIMUM
I.E
18 20 22
5 0 340596 74043
6 177702 355404 0
7 42049446 444255 0
MAXIMUM 429446 444255 74043
CHOOSE THE MINIMUM WHICH IS 74043
THEREFORE SHOULD CHOOSE 22Try it now
Isaiah
