Which of the following are short-run decisions and which are long-run decisions?

Question

Which of the following are short-run decisions and which are long-run decisions? General Motors decides to add a second shift to its Arlington, Texas production plant. Gotham Foods International chooses to exit the restaurant industry to concentrate on its wholesale grocery supply business. Binion's Gambling Hall and Hotel in Las Vegas closes its hotel tower in response to low demand. Tony Andretti, owner of Tony the Taxman, hires five new CPA s to work at his tax preparation business. German tool and appliance manufacturer Bosch enters the electric bicycle industry in 2010. General Electric builds a new offshore wind-powered electric generation plant in the United Kingdom.

Explanation / Answer

Short Term Decision : Because it can be used over a period of up to a year to help corporations increase inventory orders, payrolls and daily supplies,to meet goals once that is achieved new changes can be made. Long Term Decision :Since it has entered into wholesale grocery supply business an entirely new decision and will continue with it as it has also invested hige capital manpower and energy, Short Term Decision : Because it can be reopened when demand rises hence a short term decision. Long Term Decision :Since 5 new CPA are hired they will work for the company until they are being benefited by company. Long Term Decision : Since it has entered into bicycle industry an entirely new decision and will continue with it as it has also invested hige capital manpower and energy, Long Term Decision : Businesses need long-term financing for acquiring new equipment, R&D, cash flow enhancement and company expansion.

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