MANAGERIAL ECONOMICS RELATED WITH
OTHER DISCIPLINES
Managerial Economics and Traditional Economics
Economics
and Managerial economics both are facing identical problems,i.e., problem of
scarcity and resource allocation. Since labour and capital are always limited
it must find way for effective utilizing of these resources.
MANAGERIAL ECONOMICS AND OPERATIONS RESEARCH
Both operations research and managerial economics
are concerned with taking effective decisions, managerial economics is a
fundamental academic subject which seeks to understand and to analyse the
problems of business decision making while OR is an activity carried out by
functional specialist within the firm to help the manager to do his job of
solving decision problems.
ITS MAIN CONTRIBUTION TO
MANAGERIAL ECONOMICS
OR models like queuing,linear
programming etc.., are widely used in managerial economics Model building,
economic models are more general and confined to broad economic decision making
MANAGERIAL ECONOMICS AND
MATHEMATICS
Mathematics
is closely related to managerial because managerial economics ,being conceptual
but also metrical.Its metrical property is used to estimate and predict the
relevant economic factors for decision making and forward planning
ITS MAIN CONTRIBUTION TO MANAGERIAL ECONOMICS
Geometry,
algebra and calculus
Logarithms
and exponential, vectors and determinants,input-output tables etc.,
Even OR can be included as a part of
mathematical exercise
Statistics
is widely used in managerial economics. It is mainly needed for a correct
judgement and decision making
ITS MAIN CONTRIBUTION TO MANAGERIAL ECONOMICS
To handle
the unforeseen circumstances the theory probability is mainly used.
MANAGERIAL ECONOMICS AND THE THEORY OF DECISION
MAKING
The
theory of decision making is relatively a new subject that has significance for
managerial economics. Much of economic theory is based on the single goal
MAXIMISATION OF PROFIT, but theory of decision making recognizes the
multiplicity of goals and the pervasiveness of uncertainity
ROLE OF MANAGERIAL ECONOMIST IN BUSINESS
The task of organizing and processing information
and then making an intelligent decision based upon two general forms
·
Task of making Specific decisions
·
Task of making General decisions
Specific
decisions include
·
Production scheduling
·
Demand forecasting
·
Market research
·
Economic analysis of the industry
·
Investment appraisal
·
Security management appraisal
·
Advice on trade
·
Advice on foreign exchange management
·
Pricing and related decisions
General
decisions include
·
Analysing the general economic condition
of the economy
·
Analyzing the demand for the product
·
Analysing the general market condition
of the economy
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