Question

Analyze the elements of the first three steps of the performance

management process and the relationships between the factors.

Answer 1

The first three steps of the performance management process are analyzing the problem, understanding the relationship between production and costs, and analyzing short-run costs and calculating average profit.

Step-by-step explanation:

The first three steps of the performance management process are:

1. Step 1: Analyze the problem and identify what information is given. This step involves carefully reviewing the problem and understanding the context and information provided.
2. Step 2: Understand the relationship between production and costs. This step focuses on understanding how production and costs are related, including factors like total cost, fixed cost, variable cost, marginal cost, and average cost.
3. Step 3: Analyze short-run costs and calculate average profit. In this step, short-run costs are analyzed in terms of their components, and average profit is calculated based on the patterns of costs.

The relationships between these factors are important for effective performance management. Understanding the problem, the relationship between production and costs, and analyzing costs helps in evaluating potential profit and making informed decisions.