Black Market Essay Example | Topics and Well Written Essays - 2500 words

Black Market - Essay Example When foreign currency is set below the market rate, an excess demand is created for acquiring foreign currency. A government usually responds by devaluing the currency or setting quotas on purchase of foreign goods. A parallel underground economy emerges by manipulating the forces of supply and demand. A black market can also emerge if trade creates an artificial scarcity of goods which in the process causes high returns on their investments by profiteering. The black market generates unreported wealth and income. Officially allocated foreign exchange is resold in the underground market (Atkins, 609). Black market transactions are disruptive to society. They undermine the ban on goods and services which have been banned by the government. Legitimate businesses are at a disadvantage because goods and services are sold in the black market to avoid taxes. The underground market can also affect public revenues and delimit national productivity. It can also drain the balance of payments and distort equity concepts of economics (Atkins, 609). Black market transactions usually involve cash which is easy to evade detection by governments. It also bypasses complex financial operations. There is some dispute about the size of the black market. Economists look at the volume of cash which is circulated in a black market economy. The internet has emerged as the major indicator of the extent of the underground economy. eBay has 40 million users. Sellers are responsible to pay taxes but there is no study which details if the sellers pay taxes and whether governments have intervened to ensure they do (Atkins, 609). Goods sold in the black market can either be cheap or more expensive than normal prices. If goods are stolen than they can be cheaper than normal prices. However illegally supplied goods may be more expensive because of difficulties in production and dangers associated with trying to smuggle such goods in countries. Black markets thrive if consumer demands for goods which are not available through legal channels are unavailable (Bagnasco, 157). Underground markets can be reduced by removing the legal barriers for goods. Some people advocate that products like drugs should be legalized and government should focus on more dangerous elements of society. This has been countered by critics as legalizing crime. Removal of legal restrictions reduces the prices of goods. If products like drugs are legalized their prices would drop and most people would access trustworthy legal sources. Black market also consists of legal activities which are not reported to government tax authorities. Many corrupt officials in developing countries avoid paying taxes. Black money is the outcome of this practice. The black market has some important functions. It is a cash economy which is liquid and fast. It increases the flow of money. It injects foreign exchange into the economy and increases the money supply. It can also provide employment, create economic activity and encourage labor mobility. It is important for countries which face economic hardship. Developing countries have backward economies. Their technological expertise is primitive. Unemployment, dilapidated machines, dysfunctional infrastructure are rampant in such economies. Trade deficits, crime and budget deficits rise sharply in such economies

Service Operation and Manufacturing Operation Essay

Service Operation and Manufacturing Operation - Essay Example It covers the lean operations and resource planning system to illustrate clearly that point. Introduction Service operation management is very different from manufacturing operations management. Service operations management entails fulfilling the end user’s needs and creating a suitable environment for the workers so that they can produce the required specifications of the user (Johnston 1998). Manufacturing operations management entails producing the required commodity required by the end user. It entails making sure that the product required has undergone through all the detailed steps in the manufacturing process. Difference between service operation and manufacturing operation Service operation is a process that is concerned with the maintenance of daily operations that occur with in an organization. Service operation management makes sure that the daily activities of the business run normally without any interruptions. Service operations management focuses on the infrast ructure and the daily activities that are used to deliver services for an organization. Some of the tasks that occur in service operation include fixing problems that occur in the organization, fulfilling the user needs and requests, resolving failures of the system, and undertaking routinely operational tasks. On the other hand, manufacturing operations are the tasks that an organization undergoes in order to produce a commodity. Manufacturing operations make sure that the production of the commodity that is needed has been successful. In addition to that, it makes sure that the quality of the goods or commodities needed are met. While service management focuses on the maintenance of the infrastructure and meeting the requests and orders of a client, manufacturing operations makes sure that the needed commodity is produced. Service operations deal with the services that are to be given to the organization while manufacturing operations deal with creating the goods that are needed f or production in the organization. This is to imply that service operations deal with the intangible while manufacturing operations deal with the tangibles in an organization. The intangibles that service operations deal with is the fixing problems that occur in the organization, fulfilling the user needs and requests, resolving failures of the system and undertaking routinely operational tasks. The tangible that the manufacturing operations deal with is the production of the goods of one unit until the end. Manufacturing operations make sure that the goods that are required are manufactured and processed the way the client has requested them to be. In service operations, there is a relationship between the producer and the consumer. The production and consumption is simultaneous while in manufacturing operations, there production and the consumption of the goods occur at different stages (Hammer & Champy 2001). For instance, in a baking flour company, the task that service operatio ns entails is to make sure that the consumers are satisfied with the baking flour. The service operations management team will make sure that the daily activities in the company run efficiently. However, in a manufacturing operations set up, the management team will make sure that they process the baking flour that is needed. In addition to that, they will also make sure that all the steps that are required to produce the baking flour are completed. In a service operation system, the inventory concept might not be material. For instance in a health care sector, people who are queuing in a