ECO 501 : Managerial Economics

ECO 501 : Managerial Economics

Regular Assignment

7/23/2013

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REPORT ON

GARMENTS EXPORT

(COMPETITION PRICE BETWEEN BANGLADESH AND CHINA)

Prepared For:Professor K.M. Jamshed uz Zaman

Course instructorManagerial Economics (ECO 501)

STUDENT NAME STUDENT ID SIGNATURE

Md. Kamrul Hasan 13164079

Sayed Mohammad Amin Faysal 13164083

Md. Rajibul Haque 13164096

Rossi Norman Dias 13164082

Muhammad Tanvir Hossain 13164042

Chowdhury Maha Alam 13164016

Prepared By:Group 3

Summer 2013, MBA Program

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School of Business Administration, BRAC UniversityJuly 23, 2013

Letter of Transmittal

July 23, 2013

K.M. Jamshed uz ZamanCourse InstructorManagerial Economics (BUS 501)

Subject: Submission of Report

Dear Sir,

According to your instructions, we have prepared a report on "Garments Export" in Bangladesh for your kind consideration.

The main purpose of this report is to assess whether the Chinese firm is really a competitor and if US income rises what will be our price to meet the export target.

Sincerely yours,

Muhammad Tanvir Hossain ID : 13164042Rossi Norman Dias ID : 13164082Md. Rajibul Haque ID : 13164096Md. Kamrul Hasan ID : 13164079Sayed Mohammad Amin Faysal ID : 13164083Chowdhury Maha Alam ID : 13164016

Group 3, MBA, BRACU

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Executive Summary

A function of international trade whereby goods produced in one country are

shipped to another country for future sale or trade. The sale of such goods adds to

the producing nation's gross output. If used for trade, "exports" are exchanged for

other products or services. "Exports" are one of the oldest forms of economic

transfer, and occur on a large scale between nations that have fewer restrictions on

trade, such as tariffs or subsidies. Most of the largest companies operating in

advanced economies will derive a substantial portion of their annual revenues from

exports to other countries. The ability to "export" goods helps an economy to grow

by selling more overall goods and services. One of the core functions of diplomacy

and foreign policy within governments is to foster economic trade in ways that

benefit both parties involved.

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SAMPLE SURVEY: GARMENTS EXPORT OF BANGLADESH

1.0 INTRODUCTION

1.1 Background:

Bangladesh garments exports were worth $19089.79 million in 2011-2012. As we can see

from 1993 to 2012, Bangladesh exports garments products from just merely 1445.02 to

19089.73 respectively. Two type of garments product Bangladesh is exporting, oven and

knit.

0

5000

10000

15000

20000

25000

YearTotal Garments Export

1.2 Literature Review:

Foreign trade plays a vital role in gaining rapid economic development of a country. Since

Bangladesh is a potential developing country, the foreign trade is highly important than any

other sector of economy. But unfortunately, our country is still severely unfavourable in

terms of trade balance.

Every year Bangladesh has to spend a formidable amount of money for importing consumer

goods and materials for consumer goods. But garments industry is closing the gap between

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import and export goods and services that we are consuming right now. Bangladesh import

industrial raw materials which is positive signal for our economy.

VALUE AND QUANTITY OF TOTAL APPAREL EXPORTFISCAL YEAR BASIS

(VALUE IN MN. US$ QUANTITY IN MN DOZEN)

YEAR

TOTAL APPAREL EXPORT IN MN.US$

TOTAL APPAREL EXPORT IN MN.DZ

WOVEN KNIT TOTAL WOVEN KNIT TOTAL

1992-93 1240.48 204.54 1445.02 36.05 10.66 46.71

1993-94 1291.65 264.14 1555.79 34.35 10.81 45.16

1994-95 1835.09 393.26 2228.35 47.21 15.30 62.51

1995-96 1948.81 598.32 2547.13 48.82 23.18 72.00

1996-97 2237.95 763.30 3001.25 53.45 27.54 80.99

1997-98 2844.43 937.51 3781.94 65.59 32.60 98.19

1998-99 2984.96 1035.02 4019.98 64.79 36.66 101.45

1999-2000 3081.19 1268.22 4349.41 66.63 45.27 111.90

2000-2001 3364.32 1495.51 4859.83 71.48 52.54 124.02

2001-2002 3124.82 1458.93 4583.75 77.05 63.39 140.44

2002-2003 3258.27 1653.82 4912.09 82.83 69.18 152.01

2003-2004 3538.07 2148.02 5686.09 90.48 91.60 182.08

2004-2005 3598.20 2819.47 6417.67 92.26 120.13 212.39

2005-2006 4083.82 3816.98 7900.80 108.82 165.02 273.84

2006-2007 4657.63 4553.60 9211.23 133.08 199.54 332.62

2007-2008 5167.28 5532.52 10699.80 147.43 241.60 389.03

2008-2009 5918.51 6429.26 12347.77 169.59 290.92 460.51

2009-2010 6013.43 6483.29 12496.72 172.80 292.70 465.50

2010-2011 8432.40 9482.06 17914.46 247.28 441.03 688.31

2011-2012 9603.34 9486.39 19089.73 49.94 56.46 106.39

Table 2.1: Value and Quantity of Total Apparel Export of BangladeshSource: Export Promotion Bureau Compiled by BGMEA

Table 2.1, shows the total export of Bangladeshi garments products in $million. In recent

years our garments export rises from $10000 million to almost $20000 million.

1.3 Objectives

1.3.1 Broad Objectives

The main objective of this report is to find out the concern reason which is affecting the

price of garments products.

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1.3.2 Specific Objective

The objectives of this report to find out on Export of Bangladeshi garments products, which

include:

To find out whether the rise of the US income has any effect on pricing on

garments products.

To find out whether Chinese firms are really a competitor.

1.4 Hypothesis

Identifying the reasons which affect the procedure of export price and therefore can help in

making proposal in this consideration through the result.

1.5 Limitations

All the numbers are imaginary and there might be some round-off errors in the calculation.

2.0 METHODOLOGY

Here we will follow the secondary methodology. We have received data which was given by

our instructor and will follow the rules of regression to find out the result. Regression

analysis is one of the most widely used techniques for analyzing historical or experimental

data. In short, regression lets us determine to what extend a measured result is correlated

to input values. More specifically, a regression analysis is used to find the coefficients, b, m1,

m2... mn that cause a line of the form to best fit a series of data points.

3.0 ANALYSIS

3.1 Analysis 1

Here, letX variable 01(X1) = Price Bangladesh OffersX variable 01(X2) = Price China OffersX variable 01(X3) = US Income

3.2 Analysis 2

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Here, letX variable 01(X1) = Price Bangladesh OffersX variable 03(X2) = US Income

4.0 Results

From Analysis 01 we can clearly say that, that price China offers

Appendices 1

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Appendices 2

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