Managerial economics is a branch of economics which is applied in decision making. It has developed many tools, techniques, and methods to solve the business-related problems.
And thus the application of the economics to solve the business related problems can be termed as managerial economics.
A managerial economist is a person who has vast knowledge about the managerial economics and helps the company grow and solve its problems faster.
If you want to know the functions of the managerial economist, then you have been landed on the right website here. Because in this article of mine, I will be telling you about the functions of this person with good knowledge about the managerial economics.
You should know that the managerial economics is a recent branch of economics. Many companies have already appointed the managerial economist to work for them and have achieved good results. We can say that the managerial economist is an important part of the management.
In one of my previous article, I have discussed the things which managerial economist should keep in mind. You can read that article by following the link provided.
The Functions of the Managerial Economist
The functions are as mentioned below.
1) Demand Forecasting.
Demand forecasting is one of the most important functions of the managerial economist. In this function, the economist will analyze the market conditions and predict the further demand for the products manufactured by his undertaking.
This will help the organization to produce accordingly to maximize the profits and minimize the closing stock at the end of the year.
2) Capital Budgeting.
The company has to invest money and assets in every business before starting it. And the investment which is basically termed as the capital is very important and has a long run.
So they should be very careful in making this decision on how much to invest in which thing. Here the managerial economist can help the organization to make an effective investment.
3) Risk Analysis.
Every business involves risk and the company has to bear it to run the business operations. Here the management can take the help of the economist who can analyze the risk and help the organization. If the risk is high then the company can change the plan and go through the planning process once more.
4) Pricing and Competitive Strategies.
After the production of the products and services, the organization has to set its selling price. And this price is a very important thing when we look it with the profit point of view.
So they can take the help of the managerial economist to set the price for the product which will help them to sell more units.
He can even help the organization with the strategies which they can use while setting the price of the product to beat the competition.
5) Profit Planning.
The main goal of every organization to run the business operations is to make profits. But what to do with the profit they earn by running the business operations?
They can take the help of managerial economist who can help them in terms of profit planning.
6) Government Regulations.
The government policies are getting complex these days and the organizations have to make sure that their business operations are not violating any government regulations.
Here they can take the help of the economist who will study the government regulations and suggest them the best possible way to deal with them.
And if in case the organization is violating any of the regulations he can help it to change the way it operates to anticipate further violations.
7) Cost Analysis.
He can help the organization to analyze the costs which are involved in the production of the products and services. Basically, the production manager and the cost engineer does this job. But here economist can help them by breaking down the costs involved in the productions process.
8) Strategic Planning.
No matter in which sector the organization is carrying out the business operations there is competition to face. And the beat the competition the organization need to plan good strategies. They can take the help of the economist to do this.
So these are the functions of managerial economist which are listed in this article. I hope you are clear with all the information mentioned in this guide. But if you have any kind of doubts in your mind then you can comment down below.