Administrative business functions case study

Operations Decision

Assume you have been hired as a managing consultant by a company to offer some advice that will help it make a decision as to whether it should shut down completely or continue its operations. It currently uses 100 workers to produce 6,000 units of output per month (working 20 days / month). The daily wage (per worker) is $70, and the price of the firm’s output is $32. The cost of other variable inputs is $2,000 per day. You are told that the firm’s fixed cost is “high enough” so that the firm’s total costs exceed its total revenue. The marginal cost of the last unit is $30.

Don't use plagiarized sources. Get Your Custom Essay on
Administrative business functions case study
Just from $13/Page
Order Essay

Rough Financial Statement


$ per Unit




Price Per Day


Number of Days



Variable Costs






Gross Revenue


Business Overview

The company currently represents one of the last apparel manufactures that still manufactures all of its products in the United States. The company has been able to maintain its U.S. operations despite rising costs because the target market is in a niche that allows the company to charge a premium. All of the other manufactures in this industry have outsourced their entire manufacturing operation to foreign markets to take advantage of cheap labor and lower their operating costs. Mexico has bene a popular destination for a bulk of the industry given its proximity to the United States. However, this company call, U.S. Custom apparel, has decided to continue production in the U.S. because it supports their market niche. Furthermore, the company has a built a loyal customer base that values the fact that the company uses domestic labor and it willing to pay a premium for these goods.

However, at the same time, the company’s strategy is not profitable nor does it show any future potential. The current gross profits are roughly twelve thousand dollars before fixed costs are considered. Therefore, when fixed costs are added, it is reasonable to suspect that the company is operating at a substantial loss. While U.S. Custom Apparel can produce goods at roughly five dollars to twenty dollars per unit, many of the competitors can produce comparable products often with comparable quality for a fraction of the cost (Institute for Global Labour and Human Rights, 2005). Therefore, the time has come for the company to decide if its operating model is sustainable any longer given the competitive environment.

One of the emerging business trends that have helped companies keep their expenses down is that many are outsourcing a lot of administrative business functions. In the global market, small to medium sized enterprises (SMEs) can outsource entire business functions in order to keep their internal staff levels down. It is not only SMEs that have taken advantages of outsourcing opportunities in other countries such as India and China. Apple Inc. has grown to one of the world largest companies and still relies on outsourcing of production to manufacture its consumer goods (Lo, 2011). In many cases, outsourcing also allows firms who focus on some narrow niche to concentrate on their areas of expertise and let others handle other business functions they are not as comfortable with (Lesonsky, 2012).

One disadvantage to outsourcing internationally in developing markets is that these countries often lack the judicial system to protect property rights (Goldberg, 2009). However, since the design of U.S. Custom Apparel does not consist of any trade secrets, it is unlikely that there would be substantial risk by outsourcing some of its non-critical business functions. Given that U.S. Custom Apparel has built a niche and markets themselves as manufacturing their product domestically, the company would literally have to reinvent itself if it outsourced the entire production process. However, there are likely many compromises that could be made to outsource as many business functions and process as possible yet have the final product be assembled in the United States.

The global business environment also suggests that the company really needs to reduce its expenditures and exposure to another global downturn. The global recession reduced many consumers access to disposable incomes which in turn had implications for the entire retail industry. One effect of the recession is that consumers chose more economical purchases of clothing and were less likely to purchase high-end items (PRWEB, 2012). Since U.S. Custom Apparel customers pay a premium for their goods this puts the company at a disadvantage in the event of a recession. Therefore U.S. Custom Apparel should seek to outsource as many business functions and non-critical process to overseas partners. This would allow them to maintain some domestic presence as well as lower their total overhead.

Works Cited

Goldberg, P. (2009, December). Intellectual Property Rights Protection in Developing Countries: . Retrieved from Yale University:

Institute for Global Labour and Human Rights. (2005, June 20). How Can Wal-Mart Sell a Denim Shirt for $11.67? Retrieved from Institute for Global Labour and Human Rights:

Lesonsky, R. (2012, May 2012). The Pros and Cons of IT Outsourcing: Globally, Nationally and Locally. Retrieved from Read Write:

Lo, C. (2011). Global outsourcing or foreign direct investment: Why apple chose outsourcing for the iPod. Japan and the World Economy, 163-169.

PRWEB. (2012, January 13). Global Footwear Sales to Reach U.S.$195.6 Billion by 2015, According to a New Industry Report by Global Industry Analysts, Inc. Retrieved July 3, 2012, from

What Will You Get?

We provide professional writing services to help you score straight A’s by submitting custom written assignments that mirror your guidelines.

Premium Quality

Get result-oriented writing and never worry about grades anymore. We follow the highest quality standards to make sure that you get perfect assignments.

Experienced Writers

Our writers have experience in dealing with papers of every educational level. You can surely rely on the expertise of our qualified professionals.

On-Time Delivery

Your deadline is our threshold for success and we take it very seriously. We make sure you receive your papers before your predefined time.

24/7 Customer Support

Someone from our customer support team is always here to respond to your questions. So, hit us up if you have got any ambiguity or concern.

Complete Confidentiality

Sit back and relax while we help you out with writing your papers. We have an ultimate policy for keeping your personal and order-related details a secret.

Authentic Sources

We assure you that your document will be thoroughly checked for plagiarism and grammatical errors as we use highly authentic and licit sources.

Moneyback Guarantee

Still reluctant about placing an order? Our 100% Moneyback Guarantee backs you up on rare occasions where you aren’t satisfied with the writing.

Order Tracking

You don’t have to wait for an update for hours; you can track the progress of your order any time you want. We share the status after each step.


Areas of Expertise

Although you can leverage our expertise for any writing task, we have a knack for creating flawless papers for the following document types.

Areas of Expertise

Although you can leverage our expertise for any writing task, we have a knack for creating flawless papers for the following document types.


Trusted Partner of 9650+ Students for Writing

From brainstorming your paper's outline to perfecting its grammar, we perform every step carefully to make your paper worthy of A grade.

Preferred Writer

Hire your preferred writer anytime. Simply specify if you want your preferred expert to write your paper and we’ll make that happen.

Grammar Check Report

Get an elaborate and authentic grammar check report with your work to have the grammar goodness sealed in your document.

One Page Summary

You can purchase this feature if you want our writers to sum up your paper in the form of a concise and well-articulated summary.

Plagiarism Report

You don’t have to worry about plagiarism anymore. Get a plagiarism report to certify the uniqueness of your work.

Free Features $66FREE

  • Most Qualified Writer $10FREE
  • Plagiarism Scan Report $10FREE
  • Unlimited Revisions $08FREE
  • Paper Formatting $05FREE
  • Cover Page $05FREE
  • Referencing & Bibliography $10FREE
  • Dedicated User Area $08FREE
  • 24/7 Order Tracking $05FREE
  • Periodic Email Alerts $05FREE

Our Services

Join us for the best experience while seeking writing assistance in your college life. A good grade is all you need to boost up your academic excellence and we are all about it.

  • On-time Delivery
  • 24/7 Order Tracking
  • Access to Authentic Sources
Academic Writing

We create perfect papers according to the guidelines.

Professional Editing

We seamlessly edit out errors from your papers.

Thorough Proofreading

We thoroughly read your final draft to identify errors.


Delegate Your Challenging Writing Tasks to Experienced Professionals

Work with ultimate peace of mind because we ensure that your academic work is our responsibility and your grades are a top concern for us!

Check Out Our Sample Work

Dedication. Quality. Commitment. Punctuality

All samples
Thesis/Thesis chapter
Research paper
Essay (any type)
creating a Code of Conduct
View this sample
Research paper
Week 1 Journal Assignment
Undergrad. (yrs 3-4)
Human Resources Management (HRM)
View this sample
Research paper
Cultural Intelligence Presentation
View this sample
Research paper
Communicable Disease
View this sample
Research paper
Mental health
View this sample
Essay (any type)
Personalized Glossary of Research and Assessment Terms
View this sample

It May Not Be Much, but It’s Honest Work!

Here is what we have achieved so far. These numbers are evidence that we go the extra mile to make your college journey successful.


Happy Clients


Words Written This Week


Ongoing Orders


Customer Satisfaction Rate

Process as Fine as Brewed Coffee

We have the most intuitive and minimalistic process so that you can easily place an order. Just follow a few steps to unlock success.

See How We Helped 9000+ Students Achieve Success


We Analyze Your Problem and Offer Customized Writing

We understand your guidelines first before delivering any writing service. You can discuss your writing needs and we will have them evaluated by our dedicated team.

  • Clear elicitation of your requirements.
  • Customized writing as per your needs.

We Mirror Your Guidelines to Deliver Quality Services

We write your papers in a standardized way. We complete your work in such a way that it turns out to be a perfect description of your guidelines.

  • Proactive analysis of your writing.
  • Active communication to understand requirements.

We Handle Your Writing Tasks to Ensure Excellent Grades

We promise you excellent grades and academic excellence that you always longed for. Our writers stay in touch with you via email.

  • Thorough research and analysis for every order.
  • Deliverance of reliable writing service to improve your grades.
Place an Order Start Chat Now