Economic indicator in the Airline Indistry Essay

Economic indicator in the Airline Indistry - Essay Example Before moving on discussing the effect of these two variables on the performance of the selected airline company, it is necessary to describe briefly all these three indicators that are taken into account for the present analysis- producer price index (PPI), foreign exchange rate, and net income of the company. (Froyen, 2001; Sodersten and Reed, 1994) Producer price index is a measure of average change in the level of prices that producers of a nation receive for the outputs they produce. Foreign exchange rate between two currencies of two different nations can be defined as the rate at which a particular currency is exchanged for one unit of another currency. For analytical purposes the yearly average exchange rate is generally taken into account. (Froyen, 2001; Sodersten and Reed, 1994) Net income of any company, can be defined as the level of earnings that remains after deducting the costs and expenses of the firm from its total value of revenue. For the present study, a period of 2000-2007 has been considered for examining the impact of producer price index and foreign exchange rate on net income of Southwest Airline. Only the unadjusted level of price index for finished products has been considered here. It has been found that during December, 2000, PPI was 139.7. In the next year it dropped to the level of 137.2. However, since 2002, it has started to rise continuously (2002- 139.1, 2003- 144.5, 2004- 150.4, 2005-158.8, 2006-160.5, 2007- 170). PPI can be taken as a proxy of cost of living, although not very accurate as consumer price index. From the value of PPI over the year, it is clear that cost of living has increases which in turn will force consumers to economise on their spending. Therefore, a fall in the demand for air traveling can be expected. Looking at the annual report of Southwest airlines it has been found that during 2000, net income was 603,093 thousand dollar. But it then fell to the

Summarise in your own word your understanding of resources and the Essay

Summarise in your own word your understanding of resources and the need to manage these appropriately - Essay Example On the other hand, from a wider ecological or biological perception, a resource gratifies the requirements of a given living organism (Bennet, 2014). The idea of resources can be applied in various realms comprising biology, economics, computer science, ecology, human resources and management. In addition, the concept can further be linked to such notions as sustainability, competition, stewardship and conservation. Within the broader human society, on-commercial or commercial factors need resource allocation via resource management (Moser, 2007). Consequently resources have 3 core features; limited availability, utility as well as potential for consumption or depletion. There have been various categorizations of resources such as abiotic versus biotic, on-renewable versus renewable as well as actual versus potential, alongside more sophisticated classification. In economics resources are described as assets or services that are utilized in the production of services and goods that satisfy human wants and needs. Economic can also be broadly described as the discipline that studies how a society is able to manage its scarce resources. Thus 3 classes of resources are identified in classical economics that comprise capital, labor and land, best known as factors of production. Resources must be managed effectively so as to enhance productivity, improve efficiency, as well as eliminate waste. Businesses and governments world over implement resource management solutions. With the right management solution; governments together with business will assist eradicate common problems related to poor planning of resources. Through effective standardization of the resource management procedures, governments and businesses can enhance visibility together with control leading to considerable advantages to any undertaking. Some of the core benefits that may result from effective