Logical Sequence in decision making and its effects on total cost, total revenue and profits

Abstract

The objective of this study is to examine the effects of following logical sequences on total cost, total revenue and on total profits. The model is based on cost, revenue and profit functions and examines the effects of logical sequences on total cost, total revenue and on total profits by employing partial derivatives. The findings suggest that if a firm or a corporation or a manufacturer or a builder follows logical sequences in decision making then many of the unnecessary costs, waste, duplication, repetition of work can be avoided. As a result, when logical sequences are followed there will be incremental marginal cost savings in the cost of production. Furthermore, there will be increase in incremental marginal revenue and as a result the profits will increase both from the additional cost savings and additional increase in marginal revenue resulting from the adoption of logical sequences in both cost of production as well as in in total revenue generating activities. Because of the twin positive forces, profits will increase, and profit curve will shift up at each level of optimizing level of output. This study will be immensely useful to Manufacturer, Builders, Roads and Highways Department, Bridge Builders, Big Project Managers, Urban Planners, Governments, Municipalities, Policy Makers, and Research Scholars around the world.