Using average unit cost for production and pricing decisions a field study: bismaya electric power plant
- Post by: Muthanna mjdes
- July 1, 2024
- Comments off
Abstract
The research sheds light on the inherent risks of relying solely on the average cost per unit as a metric for making production and pricing decisions. Despite the ease of calculating and using this average for quick comparisons, it is considered a misleading indicator that does not reflect the comprehensive picture of production costs. The research advocates for the adoption of a holistic cost evaluation approach based on the concept of total cost, enabling more informed and effective decision-making. The Basmaya Power Plant was selected as a case study for the period from 2020 to 2022. The study revealed that the cost of natural gas, operation and maintenance expenses, regulatory changes, the lack of clarity in future regulations, climate policies, and the limited expansion of renewable energy sources all significantly impact the average cost per unit produced. The research presented a set of crucial recommendations, most notably: Improving energy efficiency: Through the adoption of modern and advanced technologies. Optimizing operation and maintenance procedures: To reduce costs and increase efficiency. Developing flexible plans: To address the uncertainty of future regulations and regulatory changes. Supporting climate policies: By expanding the use of renewable energy sources. By adhering to these recommendations, companies and institutions can make more accurate and efficient production and pricing decisions, contributing to improved performance and enhanced sustainability
Muthanna Journal of Administrative and Economic Sciences, 2024,Volume 14, Issue 2, Pages 18-26
DOI:10.52113/6/2024-14-2/18-26
