In any production plant, the factors of production are very important as they make the base of the entire production unit. In the production of the Cancer Causing Toxins in Johnson and Johnson Shampoo, the factors of production are fully applicable. The factors of production include land, labor and capital (Oxford, & Nyikos, 2008). The land refers to the natural resources that would help in the production such as the soil, water, air, minerals, plants and animals among other natural resources that would be used in production. In this case, the soil upon which the plant would be constructed had been identified, the river around was referred as a source of water that will be used in the companys cooling process, cleaning and other activities within the factory.
Labor on the other hand refers to the efforts of the human beings during the process of production. The population around provided cheap labor that was readily available. Labor includes both marketing and other duties within the production process that involves man directly or indirectly. The company had identified qualified personnel to work at various sectors of the plant and even those who would be on the field as marketers (Oxford, & Nyikos, 2008). Man to the production of certain goods and services could also describe labor as a factor of production as the mental or physical participation. Capital as a factor of production refers to the manufactured goods and services that are used within a plant in the production of goods and services. The machinery used in production and the vehicles that were to be used in the transportation are some of the capital that were in place for the production of these products. It also includes the structures within which production of goods and services occur.
The production of the cancer causing toxins in Johnson and Johnson Shampoo involved the use of both fixed and variable costs. Fixed costs are costs that do not depend on the output of the production (Dixon, 2010). The fixed costs always remain constant regardless of the output in production. The fixed costs in this case were majorly the land upon which the firm would be laid and the cost of the machinery used in production. The other type of costs involved was the variable costs. Variable costs are costs that vary with the production output (Dixon, 2010). Variable costs included the wages paid to the employees, government taxes among other expenses.
Before deciding to produce the cancer causing toxins in Johnson and Johnson shampoo, I had considered various factors that affected my choice of the inputs to use in the production. Some of the factors include the availability of raw materials; the raw materials used in the production were readily available hence, reducing the cost of transportation. The region had adequate infrastructure that made it accessible (Oxford, & Nyikos, 2008). The region had proper roads, communication systems were also proper, the area was safe for production as transportation and communication costs were reduced. The proper infrastructure also meant that there would be minimal maintenance on the machinery used in transportation.
The other important factor of consideration was the fact that there were a good number of people living within the area plus a town centre nearby. The population provided adequate labor and most importantly, it assured the company of a ready market. The cost of the raw material was also fair enough; with consideration to the production costs, the company would still make profits at the current cost of the raw materials (Dixon, 2010). The cost of production was also fair enough to enable the company to make profits still within the area. There was a permanent river within the area ensured that there was continuous water flow for use at the plant. The water was very useful within the cooling system of the firm; it also helped in the cleaning activities within the firm among many other functions of water within the factory. These among other useful factors led to the decision that the cancer causing toxins in Johnson and Johnson Shampoo would be produced within this area and not any other product.
Based on the analysis of the factors influencing the choice of the inputs to be used in the production of the cancer causing toxins in Johnson and Johnson Shampoo, there are certain production decisions that would have to be made. Some of the decisions may include the production of the toxins and shampoo in bulk owing to the large population around the area of production (Binswanger, 2014). The city around and the large population provides a ready market for the goods and it would be used appropriately. The other decision made was to employ the people around the plant especially to the sectors that required unskilled labor. Employing the population around would build a strong relationship between the people and the firm.
The other crucial decision made was that the toxins and shampoo would be packed into packages that the people would afford. This was to ensure that the community around would afford the products (Eisenhardt, 2009). The company also decided to improve the infrastructure around the area through various means. By doing that, the company intended to give back to the society while improving efficiency within its operations. Because the production costs would be low, the company is likely to make more profit within this area, therefore, one of the decisions that the company should consider is to engage into social amenities (Binswanger, 2014). By building schools, churches and hospitals not only for its staff but also for use by the society, the company would likely develop a better relationship with the society around. The schools and hospitals should engage qualified personnel from the area as this would prove the companys loyalty to the people within the area.
A fundamental financial decision that should also arise from the company is to minimize its output while maximizing its income. This would allow the company to maximize its profit during this time that the company has an available market that would be in high demand (Eisenhardt, 2009). There are no much expenses for the company as at the start since the infrastructure is in a good condition; the company hence should invest in marketing of its products outside the region in order to attract other customers as well. With all that in place, the company would be geared to success. But since the company is new in the area, the company should mobilize people to market the product to the people around the society (Eisenhardt, 2009). These individuals should be able to teach the people the purpose of the products and even its side effects, how it should be used among other necessary information about the product.
Binswanger, H. P. (2014). The measurement of technical change biases with many factors of production. The American Economic Review, 964-976.
Dixon, R. L. (2010). Fixed and Variable Costs. Accounting Review, 218-222.
Eisenhardt, K. M. (2009). Making fast strategic decisions in high-velocity environments. Academy of Management journal, 32(3), 543-576.
Oxford, R., & Nyikos, M. (2008). Variables affecting choice of language learning strategies by university students. Modern Language Journal, 291-300.
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