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29 votes
29 votes
Juan has just opened a parking garage. His costs include employee salaries, building upkeep, computer systems, and weekly paid advertisements in local newspapers. In the first month, Juan's revenue has been very low. How can Juan reduce his costs without affecting the business's productivity and profitability?

User Bernhard Wagner
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2.7k points

2 Answers

18 votes
18 votes

Final answer:

Juan can reduce costs by optimizing employee scheduling, utilizing cost-effective advertising methods, conducting regular maintenance, and investing in energy-efficient technology. By carefully analyzing fixed and variable costs, Juan can make informed decisions on operations, similar to the scenarios presented for a Yoga Center. Additionally, negotiating services or supplies could lower costs and increase supply of services.

Step-by-step explanation:

Juan can explore several strategies to reduce his costs while maintaining productivity and profitability in his new parking garage business. One approach is to optimize scheduling to ensure employee hours are aligned perfectly with peak times, avoiding overstaffing during slow periods. Another method is to look into cost-effective alternatives for weekly newspaper advertisements, such as using social media or local online classifieds for marketing. Additionally, Juan can perform regular maintenance to prevent expensive repairs and invest in energy-efficient lighting and automation of the computer systems to save on electricity bills. By analyzing each cost individually, Juan may find opportunities to decrease expenses without reducing his business's supply or quality of service. A close look into variable and fixed costs, much like the Yoga Center's scenarios, should inform whether operations should continue or cease, based on revenue and the ability to cover at least the variable costs. Taking inspiration from the messenger company scenario, if there are any costs within Juan's control that could be reduced, such as negotiating lower rates for services or supplies, this could subsequently allow the business to maintain or even increase its supply of services, leading to potential growth in revenue.

User Alexanderius
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3.0k points
11 votes
11 votes

Answer:

He can reduce advertisement expenses

Step-by-step explanation:

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