PLEASE EXPLAIN AND SHOW ALL THE CALCULATIONS PLEASE EXPLAIN AND SHOW ALL THE CAL

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PLEASE EXPLAIN AND SHOW ALL THE CALCULATIONS

PLEASE EXPLAIN AND SHOW ALL THE CALCULATIONS

An oil and gas industry produces firm produces oil. The profit function for the firm is give as: profit = ($100-variable cost)*gallons oil sold-fixed cost. The current production rate is 5 million barrels per year. The firm can expand the production by conducting further stepwise exploration, adding 1 million or 2 million barrels ear with the following cost implications: Capacity (barrel/year 5 million Scenarios Fixed cost Variable cost Current Add 1 million 6 million Add 2 million7 million $ 10 million $14 milion $18 million $30 /barrel $26 /barrel $24 /barrel Annual demand of oil is probabilistic with following distribution Oil demand 3 million 4 million 5 million 6 million 7 million 8 milliorn 9 million 10 million Probabilit 0.2 0.3 0.3 0.4 0.4 0.2 Using Monte Carlo simulation (an Excel spreadsheet would be acceptable for this), develop a profit model for each of the 3 scenarios, and determine the average profit for each scenario. Use only 100 samples for your Monte Carlo simulation

Explanation / Answer

Article - The New age of Negotiation By Linda Stamato

Negotiation is a relationship-based ongoing process. Negotiation is important for cutting the cost and improving the productivity. Mostly negotiation adopts a zero sum approach, it is not required that during a negotiation one side needs to fail to win over another.

A good negotiator is one who has access to all information needed regarding the product and processes being negotiated on and uses the information in most effective manner. A good negotiator is the one who takes a better approach on settling the right problem. Negotiators are considered to be game changing entrepreneurs.

A job seeker who is looking out for a job eliminates all the gender based differences if he has all the information about the current job rates in the market. He will be in a better position to negotiate on his job rates.

To be a better negotiator you need to understand interests of both the parties only then you will be in a situation to negotiate on better terms. The article also focuses on the effective framing of negotiations to have a better and great understanding of situation and optimal solutions. One needs to be aware of all the possible barriers, this improves his chances of overcoming all those while negotiating.

One should always be prepared for the situation in which the negotiation would fail. The outcome you desire is the base on which your negotiation process should be based. your negotiation tactics and techniques should be framed keeping in mind the results you desire for. Communication plays a very important role in negotiation, disclose what you desire to the second party on the best suited time in your communication. You should be cooperative but firm and prefer a approach which produces gain for both the parties.

One should never adept negative traits of behavior while negotiating such as anger or winning at any cost, retaliation or demeaning others. It is found that individuals who don’t go well or are uncomfortable with negotiating, often avoid the situation or consider themselves not an effective negotiator and quit the situation which actually results into failure.

To understand the situation for the second party, we should be very clear about our interest, have all required information work upon our interest and try to enhance our own side. We should always end up and negotiate on in such a manner that ends up in a constructive negotiation, not a winner and a loser to devise remedy.

In my opinion on the article factors affecting negotiation are information about the thing negotiated on, effective communication and interest of other party. The process of negotiation should be assertive and a win-win situation for both the parties resulting into profit and gain for both rather than one losing or defaming the other one.

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