In fact, most people prefer to pay a low price for whatever they want to purchase as it serves for their benefits. However, it is a question of how to reduce cost as consumers? buying less, choosing other stuff as substitute or waiting for promotion. Actually, it depends on factors that cost their own money. Here is my example about how cost reduction operates in Oldham Hall (OH), the hostel in which I am living, including electricity, foods and equipments respectively.
As a contribution to protect environment and saving money, reducing cost of electric payment occupies an important factor in OH hostel. Hence, Oldham Hall has rules and solutions for boarders and hostel itself to reduce the cost. Firstly, they create a rule that if boarders are not in their room but electrical goods are still on, each individual in the room has to pay at least $5 for their irresponsibility. Secondly, each toilet designed with a saving energy on-off light button which means after 15 minutes the light will be automatic off. Thirdly, air-conditionals remotes are only able to use after 8pm everyday. Thus, it's really helpful for hostel to restrict the energy spent for air-conditionals which cost much more than the others such as fan, light, lamp or other machines.
Next, foods are necessary goods for daily meals in OH so that it is know as inelastic price. It means that for any changes in price, up or down, consumers still have to buy at a quantity which is enough for their daily meals. Therefore, there are some ways that used in OH hostel to make sure that boarders still feed sufficiently and hostel still save their money that is spent for foods. Hostel create a booking system on public computer so that everyone can have a choice whether they want to eat or not, and vice versa, hostel also save money when they provide a sufficient foods for booked-meals boarders. Moreover, hostel also has penalty for those who has booked meals but forget to eat or try to waste OH foods. For 1 month if boarders forget to eat their meals over 10 times they have to pay $10 for their wastage.
The last factor is about equipments that are used in OH hostel. From what I have observed, most equipments are known as elastic products as there are many brands produce these equipment with such a cheap prices. For example, if showers in restrooms are spoilt, obviously they have to change the new ones. So, they need to look for cheap price and a medium quality, then that is known as the way they reduce cost for their equipment by using substitute method which is defined as a change in price of the products will lead to the change in demand for the other products.
In conclusion, there are many ways for consumers to reduce cost. It just depends on which situation they are in, then they will know what to do base on time and social impact. For example, my OH hostel reduce costs of electricity and foods partly from money that boarders pay as their punishment or trying to use inferior goods which not cost too much money.
# How to increase productivity as producers:
Most producers need amount of money to invest necessary machines and equipments as the way to increase their productivity. where does the money come from? the large proportion comes from banks. They borrow the money from banks in different terms. It may be short-term for under 1 year, medium-term for 3-5 years and 7-10 years for long- term. That is how banks in Vietnam sets up the limitation for producers. More specific, that is how my father works to increase his productivity.
My father's company works as offshore tuna fishing. In addition, to increase productivity, he needs to upgrade a lot of equipments, devices and machines.
First of all, to increase the amount of tuna will be fished, my dad has to change the horsepower of engines inside the ships with a higher capacity so that it will be more efficient in taking time to reach the fish places or hauling fish up to the ships. Moreover, my father will change the quality of net which is more flexible or firmer to catch more fish each time hauled up to the ships. Further, fishing-detectors are really useful for fishers to recognize the existence of tuna within area.
Second, mechanical engineers are really important as they will be the ones who check the operation of engines, machines how well they are over time. Hence, it will be made sure that the productivity is always at the top high.
An example to show how it is increased in productivity. in the previous times, before upgrading, my father has to spend $30,000 to prepare all the things , fuels, checking operation of devices and so on, for each ship. Then, he gets back with a profit $10,000 which may be not enough for the next fishing time. Because catching fishes ( Tuna) basing on the effect of weather change.
After upgrading, his profit increased till $50,000 which has a higher chances to pay back the loan from banks and to increase productivity. ( note: tuna: 1kg - $8-$10, 30kg tuna can use to export to America and Japan as raw materials).
Last but not least, we can see that fishes, mechanical engineers, fishers, devices, engines, fishing-net are known as variable factors. However, big ships are fixed factors because when my father want to increase the numbers of ships, he needs to spend a lot of time to search the place selling ships with a high quality. Then, he will go to those places or even go to other countries such as Korea to buy ships. Accordingly, his business is belonged to short-term which defined that as long as there is one fixed factors with many variable factors, it is related to short-term. Furthermore, his business sometimes may cause the shortage because of weather, and no surplus if it is increased in productivity. Because he can use his high profit to subsidy for the amount of money decreased in order to gain quantity of consumers or producers in other countries, following concept of demand.
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