Professional Documents
Culture Documents
Production theory deals with physical relationship i.e. technical & Technological relations
between input & between Output & inputs.
PRODUCTION Means a process by which a commodity or commodities are transformed into
a different usable commodity.
INPUT OUTPUT
(Called manufacturing)
Services like transport, legal, medical consultancy, storage for future use, wholesaling, retailing
are also productive activities.
PRODUCTION FUNCTION
Production function is a tool of analysis used to explain the relationship between input & output.
It describes the technological relationship between input & output.
It tells that production depends on certain ships. It can be in the form of specific inputs.
Schedule
Table
Graphed line
Curve
An algebra aqua
Mathematical model
Classification of input by economist
Land
Labor
Capital
Raw material
Time
Space
E.g. a = f (K, L)
K = Capital
L = Labor
Assumptions
(i) Perfect divisibility of both inputs & outputs.
(ii) Limited substitution of one factor for the other.
(iii) Constrict technology
(iv) Inelastic supply of fixed factors in the short-term.
Laws of Production
Law of Diminishing Returns (or variable proportion) Relationship between varying factor
proportions & output when more & more units of a variable input are applied to a given quantity
of fixed inputs the total output may initially increase at an increasing rate & then at a constant
rate but it will eventually increase at diminishing rates. I.e. the marginal increase in the total
output eventually decreases when additional units of variable factors are applied to a given
quantity.
Total Output
TP(Total Production)
Labour
Marginal &
Average Prod.
APL
Labour MPL
In stage I
The first increases MPL also increase TPL continues to increase but at diminishing rate.
In stage II
I.e. after 5th worker. TPL is max at the employment of 10th worker beyond this level of output TPL
decreases in stage III.
Factors Behind the Laws of Returns
Stage I – Law of increasing returns is an operation.
Stage II – Law of diminishing returns is in application.
Factors
Indivisibility of fixed factor (capital)
- (Results in under utilization of capital of labor are less than its optimum number). If less than 6
workers is underutilizing of K.
- (Increase in labor productivity is that employment of additional workers leads to advantages of
division of labor until optimum capital labor combination is reached because of specialization of
labor)
Once optimum capital labor rate is reached employment of additional workers will amount to
substitution of capital with labor. But there is a limit to which one input can be substituted for
another i.e. elasticity of substitution between input is not in fete. Also difficult to assign
specialized task & return of firm must operate
Assumptions excessive
- Technology remains unchanged
- Input prices.
- Variable factors are homogenous
Application of the Law of Diminishing Returns.
Empirical Law is not applied universally
Technology remains fixed effect of an additional input when technology changes can’t be
explained.
Is all input are increase in all input
How much to produce
What no. Of workers to apply to a given fixed input.
Marginal Revenue Productivity & Labor Employment
Equip-marginal Principal – Marginal revenue productivity of labor equals the marginal wags rate.
The marginal revenue productivity is the value of product resulting from the marginal unit of
variable input (labor).
MRP = MPP x P
(Marginal revenue Product) (Marginal Physical Productivity) x (Price)
When MRP = wage rate tells the no. of labor to be employed.
Profit is max when MR = MC
P1 P AW=MW
W
MRP & MW
N MRP
At point P, the no. of worker = ON should be employed.
An asquint curve is focus of points representing various combinations of two inputs – capital &
labor yielding the same output.
K3 B
K2 C
K1 D
IQ2
E
IQ1=100
L1 L2 L3 L4
Substitution of one factor for other leaves the unaffected. I.e. substitution of labor for capital such
that all quantity of commodity
i.e. IQ = 100
Properties of Iso-quant
- Negative slope in the economic region (region in which substitution between
inputs is technology possible). It indicates substitution is possible i.e. if one is ↓
the other has to be ↑ to keep output.
- Convex to origin – implies not only the substitution between the inputs but also
that marginal rate of technical substitution (MRTS) is the economic region.
MRTS = ΔK = Slope of iso-quant.
ΔL
The rate of which marginal unite of labor can substitute margin. Unit of capital
MRTS ↓ : No factor is perfect substitute for another.
B
Production Line
3K
C
2K
1K Q 40
Q25
Q10
1L 2L 3L
Reasons
Technical & managerial indivisibility
- Higher degree of specialization composite
Technology for higher forms division
Own transport & strong facility of Labor.
- Dimensional relation – 15 x 10 = 150
30 x 20 = 600
(ii) Constant Returns to scale- when the change in output is proportional to the change in inputs
K & L are doubled is also doubled.
1K + 1L = 10 ] DOUBLE
2K + 2L = 20 50% increase in K & L to
3K + 3L = 30 50% increase in Q
A
Production Line
3K
B
2K
1K Q 30
Q20
Q10
1L 2L 3L
B
Production Line
3K
C
2K
1K Q 24
Q18
Q0
1L 2L 3L
Reasons
Diseconomies of scale
Diminishing returns to management i.e. managerial diseconomies
Limitedness or exhaustibility of natural resources as by increasing six of
coalmine it is not necessary that coal deposits also increases.
Production Function
Qx = P (K, L)
When all the inputs are increased in the same proportion & the proportion can be factored out
then prod fune is called homogenous prod function of degree or linear prod function.
Q =K0.25 L 0.50
HQ = (Rk)0.25 (Rl)0.50
Economies of Scale
Internal External
Internal Economies
- Economies in production (i) Technology advantage (ii) advantages of division of labor &
specialization.
- Economies in marketing (sales force better utilization)
• Large scale purchase raw materials
• Distribution through whole sealers
• Low cost sales persons
• Advertising low cost
- Managerial economies
• Specialization in management
• Mechanization of managerial fune.
• Decentralization of decisions making
• Advanced technology of communication.
- Economies in transport & storage
• Own means of transport prevents delay
• Create their own god owns less storage cost.
External Economies
- Large-scale of purchase of raw material.
- Acquisition of finance at less contest rate.
- Lower advt. Rates charged for large-scale advertising.
- Concessional rates by transport companies.
- Lower wage-rates if mono Portia employees
L= C - PK.K
PL PL
The line from alternative combination of K & L can be purchased out of total cost C is know as
Iso-cost Is cost Isoclines or budget line or budget constraint line.
K3
PL PL
∆k
∆L
L1 L2 L3
-ΔK = slope of Iso cost represents
ΔL
Marginal rate of exchange (MRE)
As
Least cost factor criteria
- First order condition
- Second order condition
-ΔK = MPL
ΔL MPK
ΔK = MRE
ΔL
MPL = Marginal Physical Productivities of L & K.
MPK
Least-cost input combination
Input combination at which factor exchange ratios of their marginal productivities.
MPL = PL or MPL = MPK
MPK PK PL PK
MPL = slope of Iso-quant
MPK
Least-cost combination exists at a point where Iso-quants are to the Iso-cost.
-ΔK = MPL
ΔL MPK
First order at A & Q also is on upper Iso-quant
Large firm will choose point P.
B Q=200
D Q=200
K’
K
K3
K2
K1
L1 L2 L L3 L’ W
TC
TVC
Cost
TFC
Output
Average Fixed Cost
AVC = TFC
Q
AFC curve is a rectangle hyper.
Average variable cost (AVC)
AVC = TVC
Q
Critical value of AVC
The critical value of Q (in respect of AVC) is that value of Q at which AVC is min. AVC is min
when its (decreasing rate of change equals Zero.
Q = δAVC = O.
δQ
Q = -0.9 + 0.10Q = 0
=9
Average Cost (AC)
The average cost is defined as AC = TC
Q
AC = 10 + 6Q – 0.9Q2 = 0.05Q3
Q
= 10 + 6 – 0.9Q + 0.05Q2
Q
AC curve is U-shaped
AC
Cost
AVC
AFC
Output
Total Cost
O1 O2 O3
SAC1 SAC3
Total Cost SAC2
LAC
O1 O2 O3
With subsequent increase in the output LTC first↑ at a decreasing rate. Then at increasing rate. As
a result LAC initially decreases until optimum ultimately of second plant & then it begins to ↑.
When the scale of firm expands unit cost of production initially ↓. But ultimately ↑
The decrease in unit cost is attributers so the internal & external economies & ↑ to internal &
external diseconomies.
SMC1 SMC2
SAC1 LAC
SAC2
Cost A B
C
Q1 Q2 Q3
Output
BEP
TR=TC
TVC
Cost / B
Revenue
LOSS
TC>TR
TFC
Quantity
ΔQ = 1
ΔVC 10
TC is vertical summation of TFC & TVC. TR intersects the TC at point B where Q = 20 at this
point TC breaks even with TR.
Breakeven output
TR = TC
15Q = 100 + 10Q
Q = 20
Limitations – In real life cost & revenue fune are not linear; there can’t be single point as BEP. In
reality functions may be non-linear. So that (To May increase at an increasing rate while the (TR)
increases at decreasing rate.
There can be 2 BEPS, which determine the upper & lower limits of profitable output.
TC
B2 TR
TR=TC
TR-TC =PROFIT
TFC
F TC-TFC=TVC
Q1 Q3 Q2
At B1 & B2 TR = TC – upper & lower break-even points.
Between B1 & B2 TR>TC – profits & also more than Q & less than Q2 will earn profits.
Contribution Analysis
TR
PROFIT
TC
BEP
COST / FC
PROFIT VC
LOSS
Q
OUTPUT
Contribution analysis is the analysis of incremental revenue & incremental cost of a business
decisions or business activity.
Contribution is the difference between total revenue & variable cost
TR – TVC = Contribution
Below the output OQ, the total contribute is less than finale cost which amounts to loss.
Contribution Line
Fixed Cost
&Contribution PROFIT
FC
FIXED COST
Q
Output
Profit volume ratio
Helps in making product PV ratio that produce taken also PV ratio per unit time is taken as the
basis of choice.
PV ratio = S-V x 1000
S
S = Selling Price V = Variable Cost
BEP (Sales value) = Fixed Expenses
PV ratio
Profit volume analysis charts.
Cost &
Sales
Revenue Cash BEP
VC (Cash Outlay)
Profit Line
Profit
BEP
Sales
Fixed Cost
Profit Volume Analysis
Use of BEP
- Sales volume to earn a given amount of return on capital.
- Profit can be forecasted
- Effect of change in vol. of sale, sales price, cost of product can be appraised.
- Choice of products or process can be made.
- Impact of increase or decreases in fixed & variable cost.
- Effect of high FC & LVC on the total cost
- Inter-firm comparisons of profitability.
- Cash BEP helps in planning of cash requirements.
- Emphasis for achieving economy.
- Angle of incident & margin safety also helps.
Limitations
- Can be applied to only single product system.
- It can’t usefully apply if cost & price data can’t be ascertains before hand &
where historical data are not relevant for estimate future cost & price.
M D2
D1
Q
Equilibrium point is the point of intersection between demand & supply curves.
If demand increases than rent rises from; this place is paring miters for all the buyers. E.g. daily
fish markets stock markets daily mill market, coffin market etc. during natural calamity essential
mediums during epidemics.
Pricing in the short run
Short run in which firms can neither do not change their size, nor quit, now can new firms enter
the industry.
Supply can be increased cord creased by increasing cor-decreasing the variable inputs.
Supply curve is elastic
D S
D’ MC
AC
P AR=MR
P1 P1
D AVC
P2 P’
P2 AR’=MR’
D’
Q’ Q M
Output
MC
AC
E AR=MR
P1
T N
E’ AVC AR’=MR’
P2
M1 M
Given the price PQ [=OP1] an individual form can produce & sell any quantity at this price.
The firms must adjust their output to the price PQ as per their cost curves in order to maximize
their profit.
Profit is max when MR = MC as price is fixed AR = PQ
At point E MR = MC. Total Max. Profit is shown by area P1 TNE.
Profit = (AR –AC) Q
AR = EM, AC = NM & Q = OM
Profit = (EM – NM) OM = P1TNE
EM – NM = EN Profit = EN
EN is the max. Super normal profit at given & cost curves.
D’
LMC
P2 AR’’=MR’’
Q2QQ1
AR=D
MR
O Q
In a monopoly market cost coeditors i.e. AC & MC curves in a competitive & monopoly market
are generally identical revenue conditions different.
AR & MR curves are different under monopoly because, unlike a competitive firm & demand
curve is downward sloping.
The slope of MR curve is twice that of AR.
A profit-maximizing firm chooses a price output combination at which MR – SMC.
Given the demand curve AR = D, the output OQ can be sold per time unit at only one price i.e.
PQ (=OP1)
Out price & profit are simultaneously determined in the monopoly firm. Hence the firm is in state
of equilibrium.
Profit (AR – SAC) = (PQ – MQ) = PM
= חOQ x PM = P1PMP2
TR = P.Q. P = 500 – 5Q TC = 50 x 20Q x Q2
MR = ℓTR MC = ℓTC
ℓQ ℓQ
= חTR – TC
M S
AR=D
P
Q1 Q2 MR Output
The total monopoly profit has been LP2SC. The monopolist produces a larger output & changes a
lower price & makes a larger monopoly profit in the long run.
Short run equilibrium price P1Q1 equilibrium price P2Q2.
If there are barriers to entry the monopoly firm may not reach the optimal scale of production
(OQ2) in the run, nor it may make full utilization of its easting capacity.
D
A
P3
Price B
P2
B
P1
D1
Q1 Q2 Q3 Output
The marketer siphon off only the major part of the consumer’s surplus.
He divided his potential buyers in blocks rich middle & poor.
Highest to rich & SOON
(a) No. of consumer is large
(b) Price rationing can be done.
(c) Single rate is applicable for a large no. of buyers.
(d) Demand curve for the entire consumer is identical.
Third degree – Different prices in different markets having different elastic ties.
In each market.
MC & MR in each market is equaled & price in each market is fixed accordingly.
Price-quantity combination that can maximize his profit in each market is chosen.
Market A Market B Total Market
B
A
S R
D
MRa
Q
It is profitable in two or more markets separated from each other by geographical distance,
transport barriers or cost of transportation, legal restriction on the inter – regional or inter state
transportation of commodities.
SMC
P1 P SAC
P2
N AR
MR
Q output
The economic profit PM (per unit) exists in the short run because of no possibility of new firms
extiring the industry.
Rate of profit would not be same for all the firms under monopoly competition because of
different in the elasticity of demand. It price is ↑ than more than normal profit. Some firms will
have lower profit because of higher long run price & output.
The existence of economic profit attracts new firms, which intensifies the competition on one
hand but reduces individual firms share in the total supply.
LMC
LAC
Revenue/Cost
AR
MR
Output
At the stage where AR = /AC. At equilibrium point the existing firms step their expansion & new
firms ease to enter the industry.
At OQ Quantity & PQ Price all firms earn normal profit as PQ = /AC
When all the firms reach their equilibrium point there will be no tendency of new firms entering
or old firms of new firms entering or old firms quality the industry.
Price Determination under oligopoly
Oligopoly is a reduced form of monopolist competition. It is competition a man few big seller,
each selling either differentiate or homogenous products.
Few – the number is so small that market share of each firm is so large that it can influence the
market price.
Automobile industry is an outstanding e.g. differentiated oligopolies.
Oligopoly
Pricing salaries
Cost- pals pricing or Mark –up pricing
p=AVC+AVC (m)
AVC (m) =gross profit margin (GPM)
Mark-Up pricing
Skimming Penetration
Pricing theory
Cost plus pricing or Mark-up pricing
“Average Cost Pricing” or “Full Cost Pricing”
Under this method is adding “fair” percentages of profit margin to the average variable cost
(AVC).
P = AVC + AVC (m)
M is the up percentage AVC (m) = gross profit margin (GPM).
M is the mark-up percentage.
AVC (m) = gross profit margin (GPM).
Mark-up percentage (m) is fixed so as to cover average margin (NPM). Thus
AVC (m) = AFC + NPM
The firm estimates the average variable cost by ascertaining the volumes of its output for a given
period of time. The optimum level of output or capacity output is used as standard output in
computer the AC.
TVC = Direct cost (cost of labor & raw materials) + other variable cost
AVC = TVC (Standard output)
Qs
Mark-up firms always take into account what the market will bear & the competition in market.
Mark-up Pricing & Margin list Rules
“Rule of thumb” method.
Accept-reject Ranking
Limited funds & firm has to select from large amount of funds & invest in many
Few no. of mutually exclusive & alternative project at a time rank all the projects under
Projects. Consideration projects whose cost = its return is
Selected
NPE = PV – C
= N Rn I -C
Σ (Hr) n
J=1
C = Total Cost of Investment
TPC = ∑ Cn
J=1 (1+r) n
=∑ Rn-Cn
J=1 (1+r) n
NPV>0 is selected
N N
∑ Rn - ∑ Cn = 0
J=1(1+r) n J=1 (i+r) n
R= IRR IRR > marketing rate
Then its worth to invest & borrow
OLIGOPOLY
d MC2
MC1
D
P
D’
d1
MR
To begin with, let us suppose that market demand curve for a product is given by dd, curve & that
the initial price is fired at PQ.
Now let one firm change its price if rival firms react in manner (i) I.e. they react with ↑ for ↑ & ↓
for ↓ the price changing firm will move along the demand curve dd. & it rival firms do not follow
the price changes, then the price changing firm will move along the demand curve DD’.
Dd’ based on (i) is lost elastic than DD’ based on reaction (ii) Now let us suppose the firms
behave like (iii) which is more realistic; now let firm ↑ its price rival firms will not follow;
demand for its product decreases considerably indicating a greater elasticity. The firm is therefore
forced down form Demand curve dp to DP. Thus the relevant segment of demand curve for it is
DP.
Now suppose alternatively the firm’s ↓ its price. The rival firms ↓ their price otherwise they
would lose their customers. This prevents the firm to gain felt advantage of price cut along the
demand curve below paint P rotates down. Thus the relevant segment of demand curve for the
oligopolies is Pd’. The two relevant segment of the demand curve relevant demand curve DPd’
which has “kind at point Po’.
Now let us draw MR curves. MR curve drawn on the basic take the shake a discontinuous curves
DJKh.
Dj Correspond DP.
Kl Correspond Pd’.
Now let draw MC curves original is MC’ intersecting MR at K since at output OQ MR = MC, the
firm makes max. Profit now even if MC shift to MC2 or any level between J & K, the firms profit
is not affected.
Output & price both are stable.
MC1
AC1
Q1 Q2
Dominant firm
D Sm
P3 P3 MC
P’ A B P’
P2
P1
Dm MR AR
Cartel
MC1 MC2 MC
P
AC1 AC2
Q1 Q2 Q
Production: - Defined as the conversion of inputs – men, machines, materials, money, methods &
management (6Ms) into output through a transpiration process.
Production involves the greatest bulk of the companies employees bulk of the companies
employees & is responsible for a large portion of firm’s assets
It has a major impact on the quality of the goods & cost of production.
It is the central fun of an org. or we can safe production as the heart of any org.
FINANCE
PRODUCTION HRM
material
mgt.
MARKETING
Production Mgt. Function
Location Plans
Plant layout
Design of Tool
& Drawing Selection & Operation of
Designing Development Size of firm
Production Planning
Production Control Control of quality
through process control
Productivity Indices
When both input & output are in the same unit productivity reduces to moor number.
It can be expressed as % of output to input or OMS – output per man stable or production/month
GNP (Gross national product) as per capital income or output per hectare.
For incentive schemes
Productivity = SMH
AMH
= Standard Man has earned
Actual Man has worked
Wastivity – Inverse of Productivity Productivity
The measurement of wastage or tool for measuring the efficiency of inputs is called wastivity.
Wastes Are
Idling of resources
Production
of defective
goods & Services
Excessive
Maintenance delays
Higher conversion Goods Produced not
As per specifications
Product designing
Product innovation sources
Developing new products
Getting new products to market
Improving the designed crusting products
Designing product for case of prod.
Designing products for quality
Sources of product innovation
Continuous
Product/service Prod. Process
Inebriation
Design Design
Degree of automation
Can reduce cost & time of labor increases product quality & flexibility.
Product/service quality
Traditionally it was only way to produce products of high quality was to produce
products in small quantities by expert craftsmen but mass production is also mass
production is quality.
Types of process designs
Product- focused – describe a form of production processing orgn. in which prod.
Departments are organized according to the type of product/service being produced.
Also known as production line or continuous production.
It tend to follow direct linear trashing precuts / services lend proceed through production
without stopping.
Continuous path of raw materials components sub assembles follow in the product
focused production.
Applied to two general form
Job X 1 2 3
6 6
4
Job Y 1 5 5 8
2 3 7
4
Job spend the large majority of line in waiting used to hospitals, automobile repair etc.
Adv. Less initial investment
Less expensive
Mobile material handling equipment
Disadv. More supervision
More skilled & trained employee
Complex prod. Planning &control
Group technology / cellular manufacturing
GT code to each product
(1) It is easier to determine how to route parts through production
(2) Number of part designs can be reduced.
(3) Parts with
Cellular Manufacturing
Grinder3
Drill
Finished
Product Debur3 Mill 1
Economic Analysis
Cost Function Of Processing Alternatives Job Shop
Cellular
Automated
2250000
11100000
500000
100,000 250,000
Number Of Units
Break Even Analysis
Process C
A
5,000 15,000
Production control – measures the actual performance of the production units & taking
remedies action called for to see that the production is actually in not less than the target
or standard set in advance.
Main functions of p roduction planning & control.
(1) Order preparation
(2) Materials planning
(3) Routing
(4) Scheduling
(5) Dispatching
(6) Progressing (Control) i.e. collection of data from various manufacturing shops
recoding the progress of work & comparing against the plan.
(7) Expediting – Chasing intensively the bottle need areas causing delays
interruptions in carrying out smooth prod. & taking appropriate action from time
to time.
Production planning problems in job shop production & continuous (mass products)
systems.
Problems depend upon the following factors:
(a) Product variety & production quantity.
For job shop prod – Low quantity product complex consisting of many components each
of which must be processed through multiple operation requires detailed scheduling &
co-order ting of large member of different components.
Mass prod – More or single product in large quantity production impel for large
components facility is organized as a product size.
For job shop – planning is emphasized
For mass prod – controlling is emphasized.
Aggregate planning
Planning is done at the broadest level. The details of the individual product requirement
the detailed scheduling of various resources & other faculties is normally left to the
individual at lower level to carry.
OBJECTIVE
(1) Make use of the available facilities & resources to ensure their optimum use.
(2) Increases the range of attritions for capacity by fixing the size of work force &
production rate.
(3) Inventories for work – in progress & finished goods are made during ban demand
so as to use the same to melt the peak demand.
(4) More time is devoted to produce more from the same machinery capacity though
properly employing the sequencing & scheduling technique.
Variables studied under the aggregate planning are: -
Prod rate
Labor employment
Investment
Sub-controlling (if permissible)
Strategies involved in aggregate planning
(1) Without changing Prod level – during loan demand sale can be ↑ by special
discount schemes cutting prices etc.
(2) During periods of ↑ method of back logging of orders can be of adopted like it
demand on the willingness of the customers.
(3) Change in prod level – when demand ↑ the output can be changed by herring
workers temper airily production can be increased by keeping workers on
overtimes or through special incentive sachems or through special incentive
schemes by altering capacity by increase of few equipments machinery by
changing the planned plan shut downs.
- Demand ↓ changing output by logging of demotating employees or reducing
capacity by switching of part machinery.
Sub-contracting
Through acquiring part of goods from other manufactured producers rather than making
in house.
Capacity utilization
Common to service industries orgn. Companies, which can’t short products, are services.
E.g.
April 200 20 Oct 200 20
May 81 27 Nov 176 22
June 210 27 Dec 84 28
July 560 28 Jan 108 27
Aug 805 23 Feb 190 19
Sept. 100 25 March 450 25
MRP
Material planning is a technique of determining the requirements of raw materials
components, spares etc. required for the manufactured of the product.
If the delivery data of the finished products is known in advance the ordering time &
quantity of other work in progress can be planned accurately with the help mathematical
calculate while doing MRP keep in consideration
Components sub in assemblies & assemblies are know so that they all can
participate for the planning of required materials.
Inventory in hand.
MRP Process
Master Production
schedule
Lead times
Is
Capital NO
Adequat
e
YES
E.g A, LT = 2
Bill of material
Item: A
Part code Number Required Level
B 2 1
E 3 2
F 3 2
C 4 1
D 3 1
G 5 2
H 6 2
A, LT =2
N(2) O(1)
K(1) I(2) M(3) LT=1 LT=2
LT=1 LT=2 LT=3
P(2) O(3)
LT=1 LT=2
a 1 b
Dash shows dummy a before either b or c &
both must be completed before d.
2
c 3
1
a b d
1
b d
1 2 3 4 6 8
a =20 b =10 c=8 e== 7 f=6
d = 11 Dummy h = 13 I =5
5 7
G =12
LF of f & I = 63
LFh = Lfi – Di
Lfe = LFh – Dh Latest elopsed finished
Slack
S = LF – EF
Lfi = EF1
U Path = V
Probability of computing.
= given - actual
U Path