Advantages of Rationalization Rationalization is the process of making something more efficient or logical. In the context of business, rationalization can lead to a number of advantages, including increased efficiency, improved quality, increased flexibility, reduced costs, and improved decision-making. However, it is important to be aware of the potential risks of rationalization, such as job […]
Rationalization The term Rationalization is derived from the word ‘Rational’ which means to work with reason, logic and understanding. Under rationalization, the old and obsolete methods of production are replaced by new and scientific methods which help in maintaining the cost per unit at the minimum. Brief History of Rationalization Rationalization was first practised in
Meaning of Production Management The term Production Management is the combination of two words Production’ and Management. The word ‘Production’ refers to the process of conversion of raw materials into finished goods, ready for sale; whereas the word ‘Management’ refers to the utilization of the factors of production (viz. and, labour, capital, raw materials and
Functions of Production Management (or Manager) Function of Production Management starts from collection of raw material till the product comes into a shape of final product. Production management refers to decision making regarding the production processes, so that the output is produced according to predetermined standards within the given time at minimum costs, for the
Vertical Combination When two or more units, performing different sequential activities in the same industry are combined, the combination is called Vertical Combination. In this kind of combination, the work of combined units is not competitive but is complementary to each other, that is, the finished product of one unit is the raw material for
Horizontal Combination When two or more units engaged in the same kind of business join or combine under single management, the combination is called Horizontal Combination. The quality of such combined units is that they carry on the same trade before the combination. Such kind of combination is undertaken mostly when too much competition is
Law of Marginal Utility Introduction The law of marginal utility reflects human behavior. It determines how people spend their time and money and how much value they assign to each item in their lives. The law states that the utility of an additional unit of a good or service decreases directly to the increase in
