engleski

DEVELOPMENT OF NEW PRODUCTS WITH THE IMPLEMENTATION OF GUTENBERG'S PRODUCTION FUNCTION

Many years of crisis and recession on one side and the need to maintain the company on the other side have prompted businesses in the manufacturing sector to come out of their comfort zone and sleepiness. Years in front of crisis and recession for most created a false sense of security and stability. Many manufacturing companies weren't involved in developing new products. With the arrival of the crisis, cost-cutting has become the dominant preoccupation of business strategies. Due to the decrease in revenue, it is also necessary to cut costs and keep them under control, if the goal is to survive in the market. While the variable costs of production, because of their nature, reduce themselves, there was a need to resolve fixed costs, or with a reduction or by expanding the product range. Businesses that possessed surplus production capacity, with the advancement and improvement of existing products, launched the production of new products. Gutenberg in his production function talks about the division of production factors in the permanent and expendable. In order to connect a constant factors and fixed costs it is necessary to include cost of fixed factors in calculation. Since it is known that the average fixed costs have degressive movement, it can be concluded that by starting production of the new product, until filling up capacities, the average production overheads reduced to the lowest level. The aim of this paper is to determine the applicability of the Gutenberg production function in the real business environment of the production company. Results of the study show that it is possible by starting production of new types of products to reduce average fixed costs to the lowest level.

Gutenberg production function, fixed costs, average fixed costs, production of a new product.

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