In the reported study paper, a basic system analysis of an economic issue i.e. the allocation of effort between producing low-value cow milk and high-value cow milk in New Zealand has been evaluated. In order to complete the entire analysis, causal loop model has been utilised to determine the important elements attached to the system. Moreover, drawing the elements related to the analysis, the linkages between the identified elements have been denoted in the study as well. Evidently, the balancing and reinforcing loops have been illustrated in a diagram representation. Through the investigation of the analysis, a growth archetype has been identified. To finish the report, the intervention of management to improve the system function has been described as well.
The leading economic issue defined in the study is related to the allocation of effort between producing low-value cow milk and high-value cow milk in New Zealand. In order to understand the economic issue, a systematic analysis has been constructed drawing a causal loop model based on the elements associated with the issue (Clarke, Leuridan, & Williamson, 2013). Precisely, the efforts leading to the production of high-value and low-value cow milk have included elements such as labour, productivity per labour, production of low-value cow milk, and production of high-value cow milk, technology, capital supply, and profitability of firms (Galindo Marti?n, & Nardi Spiller, 2010).
In order develop the casual loop model; first of all, the identified elements have been drawn to understand the affecting elements attached to the system analysis. Critically, by describing the linkages between the individual elements, it will be important to denote the positive and negative linkages. In the section below, the entire causal loop model has been drawn as follows:
Figure: Causal Loop Model
First of all, the labours required for both the high-value and low-value cow milk production can be defined as one of the leading efforts in the economic issue. Hence, the linkage between labours and high-value and low-value cow milk production will be positive as denoted in the causal loop model. Alternatively, the relation between production of high-value and low-value cow milk will be positive with the profitability of the firm. Specifically, productivity per workers is an element that creates a positive impact on the production of both types of milk. On a substantial note, during the production of both high-value and low-value cow milk, the labour cost has created a negative linkage with the profit of the firm (Chaudhary, & Upadhyaya, 2015). Precisely, technology has been an instrumental factor in the allocation of efforts to mitigate the identified economic issue. Technology will influence the productivity of labour in a positive way as well as the production of high-value milk from low-value milk. Also, a significant capital supply needs to be added on installing the technology. Reversely, capital supply is one of the substantial elements contributing to the production and managing the cost of labour (Wiseman, 2015). Herein, significant capital supply can create a positive linkage towards labour management.
Admittedly, during the production of low-value milk in New Zealand, the labour cost has to be minimised so that comprehensive profitability can be drawn by the marketers. On the other hand, production of high-value milk requires expertise human resources, technological resources, and other fundamental resources. Hence, capital supply needs to be improved in the case of production of high-value milk (Chaudhary, & Upadhyaya, 2015). In the given causal loop model, the blue positive loops classify the reinforcing loops whereas the red negative loops define the balancing loops (Umbach, 2009). Meanwhile, each of the elements attached to the section needs to be verified accordingly to control the allocation of effort during the production of high-value and low-value cow milk in New Zealand market.
In term of balancing and reinforcing the elements, blue positive loops have denoted reinforcing loops whereas red negative loops determine balancing loops. As per the causal loop modelling, labour units and production of low value cow milk has been reinforced so that profitability will increase. Also, capital supply has been reinforced with productivity per worker to increase the production of high value cow milk. Evidently, capital supply and technology have been engaged in another reinforced loop to increase production. In case of balancing the elements, labour units have been balanced with profit to allocate the fund required for business sustainability. Also, labour units and productivity per worker has been engaged in a balanced loop to support each of the elements leading towards productivity.
There are several limits to growth faced by the milk production industry of New Zealand in terms of the elements of archetype. The limits to the growth archetypes are presented herein below:
Limits to growth for low value cow milk: ↑ labour, ↑ production, ↑ crowding, ¯ productivity
By considering the figure presented in the causal loop model, it can be seen that the labour units implied in the production of low value cow milk are too high. On the other hand, with high number of labours the production in the low value cow milk industry increases. Additionally, the low value cow milk production system faces high crowding that result in low per capita production (Rae, 2017). In other words, the primary limit to the growth archetype of low value cow milk is low productivity. Hence, there is a lack of optimal usage of resources.
Limits to growth for high value cow milk: ↑ capital, ↑ technology, ↑ productivity, ↑ costs, ¯ profit
Meanwhile, the limits to growth archetypes faced by the high value cow milk production system are the high level of cost and low profitability. The management inputs high capital in the production of high value milk to improve the technology. On the other hand, the technology results in the enhancement of per labour productivity resulting in an increase in the costs (Norton, & Berckmans, 2017). Hence, a fall in the profitability can be evident in this case. The management lacks to achieve the business objectives of higher profitability due to high cost of production.
The intervention of the management to improve the system functions are presented herein below:
By considering the above analysis of the economic system of allocation of efforts in the low value cow milk and high value cow milk, every factors of production are connected to each other leading to high productivity and profitability. The limitations in the growth archetypes influence the optimal utilisation of resources. Conclusively, the management must identify the points of interventions in order to achieve the business goals of increasing profit and productivity.
Chaudhary, B., & Upadhyaya, M. (2015). Socio-Economic Impacts of Dairy Cooperative. Economic Journal Of Development Issues, 15(1-2).
Clarke, B., Leuridan, B., & Williamson, J. (2013). Modelling mechanisms with causal cycles. Synthese, 191(8), 1651-1681.
Dietz, M. (2017). Dairy prices rise again at Global Dairy Trade auction - The Country - The Country News. The New Zealand Herald. Retrieved May 2017, from https://www.nzherald.co.nz/the-country/news/article.cfm?c_id=16&objectid=11848983
Galindo Marti?n, M., & Nardi Spiller, C. (2010). Issues in economic thought (1st ed.). New York: Nova Science Publishers.
Norton, T., & Berckmans, D. (2017). Developing precision livestock farming tools for precision dairy farming. Animal Frontiers, 7(1), 18.
Rae, S. (2017). Dairy prices rise again at latest auction - The Country - The Country News. The New Zealand Herald. Retrieved May 2017, from https://www.nzherald.co.nz/the-country/news/article.cfm?c_id=16&objectid=11850082
Umbach, E. (2009). Socio-economic systems as causal factors in the dynamics of ecosystems. Ecological Modelling, 46(3-4), 305-310.
Wiseman, A. (2015). Economic issues (1st ed.). Washington, D.C.: Bureau of Economics, Federal Trade Commission.
To export a reference to this article please select a referencing stye below:
My Assignment Help. (2018). Micro And Business Economics. Retrieved from https://myassignmenthelp.com/free-samples/micro-and-business-economics.
"Micro And Business Economics." My Assignment Help, 2018, https://myassignmenthelp.com/free-samples/micro-and-business-economics.
My Assignment Help (2018) Micro And Business Economics [Online]. Available from: https://myassignmenthelp.com/free-samples/micro-and-business-economics
[Accessed 07 April 2020].
My Assignment Help. 'Micro And Business Economics' (My Assignment Help, 2018) <https://myassignmenthelp.com/free-samples/micro-and-business-economics> accessed 07 April 2020.
My Assignment Help. Micro And Business Economics [Internet]. My Assignment Help. 2018 [cited 07 April 2020]. Available from: https://myassignmenthelp.com/free-samples/micro-and-business-economics.
MyAssignmenthelp.com has appointed best assignment experts who are wizards of words. Our writers know every trick of crafting high quality write-ups within a short period. With years of experiences, we have become one of the most prolific assignment help services in the USA. We deliver custom-made help to students with writing different types of assignments. We guarantee total need-based and timely service, and this is why increasing numbers of students prefer to buy assignment online.
Answers: 1. Substance over Form is viewed as an accounting notion and it implies that the economic substance of transactions and event needs to be recorded in the financial statements of the companies rather than just their legitimate procedure with the aim to present a true and fair view of the financial matters of the business entities. The concept of Substance over Form requires that there is a need for the use of judgments by the preparer...Read More
Answer: The rate of underutilization is the sum of unemployment and underemployment. For this reason, it can be said that the rate of underutilization will be higher compared to the rate of unemployment. Unemployment takes place when a person is actively searching for jobs and is unable to find any job. Unemployment can be measured by measuring the rate of unemployment where the people who are unemployed are divided by the number of peop...Read More
Answer: Introduction In this essay, the prospective effect of drought on macroeconomic equilibrium of Australia has been discussed. Drought indicates a dry climatic condition resulted from insufficient rainfall in a specific region. Drought affects an economy by influencing mainly supply side variables. Farms, business and common people are likely to suffer due to drought. Based on intensity the effect of drought might be local, regional or e...Read More
Answers: 1. The three main forms of unemployment are structural unemployment, frictional unemployment and cyclical unemployment. The first two represent natural unemployment while the third occurs due a decline in demand during recession. Structural unemployment The labor market suffers structural unemployment due to a shift in the economic structure creating divergence between skills that workers possess and the skills that employers...Read More
Answer: a. In a perfectly competitive market, firms are price taker as none of them can change the market price. New firms can enter into the market without any restrictions and each of them sells similar products. Therefore, each firm possesses a very small portion of the entire market. According to the characteristic of this market, each firm and each consumer has perfect knowledge of others (Cowell, 2018). If one of them change price then ...Read More
Just share your requirements and get customized solutions on time.
Our writers make sure that all orders are submitted, prior to the deadline.
Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.
Feel free to contact our assignment writing services any time via phone, email or live chat.
Our writers can provide you professional writing assistance on any subject at any level.
Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.
Get all your documents checked for plagiarism or duplicacy with us.
Get different kinds of essays typed in minutes with clicks.
Calculate your semester grades and cumulative GPa with our GPA Calculator.
Balance any chemical equation in minutes just by entering the formula.
Calculate the number of words and number of pages of all your academic documents.
Our Mission Client Satisfaction
Great job , quick response. Will call back again , highly recommend ...............
Great help. This website saved my life because I was behind in submitting and I have a jobwhich prevented me from completing the assignment. Thank you My Assignment
I passed this particular course with very good. I hope to pass the other ones too. I am very happy
The assigment u have sent me I think it’s fine but instead of I believe or I u can write student believe or like this it’s should not be I