Thursday, December 15, 2005

Lowering costs of operations.

Since I am not a student of economics, sometimes reading other people's analysis on market situations is enlightening for me.

Say for instance, AD's analysis on the AirAsia 2,000,000 free tickets. I didn't think of the, not so popular, yet unoccupied seats, but since the customers are paying for the airport tax (which is about 40 % of total charges), the operational costs are covered (or less for Air Asia to cover in this aspect, that is).

A way to lower the marginal cost of operations for Air Asia. Well, it works both ways. The same way where cinemas give the vouchers for buy one, free one tickets for the less popular movies, or charge less for matinee shows or in the morning, so that more people would come and watch. Of course, at night it does not make sense to do that as it will lower the margin of profit for the company, as everyone is flocking to the cinema. Comprende?

4 comments:

Mark said...

Hi CY,

If you like that kinda stuff, you should really check out The Economic Naturalist.

http://www.amazon.co.uk/Economic-Naturalist-Economics-Explains-Everything/dp/0753513382

It explains a lot of stuff in a manner that's more accessible to us non-economists. =-P Nice short excerpts on things like why milk comes in square cartons but not soft drinks, why there's a light in your fridge but not your freezer, etc. :)

The book was on sale at MPH last I checked, but I'm guessing you're not in Malaysia right now. :)

Hm, so how to lower operating costs in a childcare centre? Offer them 5-day a week package? =-P

The link for AD's analysis is broken btw, in case you could be bothered fixing a 4 year old link. =-P

Regards
Mark
http://earlychildcare.wordpress.com/

cheayee said...

actually, if u had checked my twitter updates, u'd have known that i AM currently in KL.

as for the book, i've actually read it before. i 'stole' my couz's book and it is in my room. LOL.

lower operating costs in childcare?

in australia, that's a bit hard... cost of labour is jst as high.

in malaysia, the cost is already quite low, as labour cost is low.

the thing is, you must always remember at the back of your mind is that: childcare centres are business establishment.

A business establishment that runs on charity, or in the red, will not be able to break-even, or survive for a long time. they will eventually go bankrupt.

Mark said...

Oh, haha, I'm brand new to twitter. How do we add each other?

In fact I've been having problems with my twitter. I type in that window thing, but when I click reply/update, nothing happens, as though I've been disconnected from internet like that (I haven't).

Regards
Mark
http://earlychildcare.wordpress.com/

Mark said...

It's not at the back of my mind, it's at the front!

I love working with kids, but I'm not a lottery winner or Lei Kah Seng's son, I need to eat too! :)

Plus there's increasing competition with all the Montessori's and other new-type childcares mushrooming all over.

Regards
Mark
http://earlychildcare.wordpress.com/

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