Process Design Essay

Design Improvement Product/service design Planning and control Nature and purpose of the design activity Products, services and the processes which produce them all have to be designed Decisions taken during the design of a product or service will have an impact on the decisions taken during the design of the process which produces those products or services, and vice versa Design of products / services and design of processes are interrelated and should be treated together Designing the product or service Designing the process Products and services should be designed in such a way that they can be created effectively Product / service design has an impact on the process design and vice versa Processes should be designed so they can create all products and services which the operation is likely to introduce Design of the Product Design of the Process In manufacturing operations overlapping the activities of product and process design is beneficial In most service operations the overlap between service and process design is implicit in the nature of service Process mapping symbols derived from ‘Scientific Management’ Operation (an activity that directly adds value) Inspection (a check of some sort) Transport (a movement of something) Delay (a wait, e. g. for materials) Process mapping symbols derived from Systems Analysis Beginning or end of the process Activity Input or output from the process Direction of flow Storage (deliberate storage, as opposed to a delay) Decision (exercising discretion) Manufacturing process types Process tasks Diverse/ complex Process flow High Intermittent Project Jobbing Variety Batch Mass Continuous Low Volume High Repeated/ divided Continuous Low Specially made, every one ‘customized’ Defined start and finish: time, quality and cost objectives Many different skills have to be coordinated A project process with a small part of the process map that would describe the whole process Jobbing processes Very small quantities: ‘one-offs’, or only a few required Specially made: high variety, low repetition, ‘strangers’, every one ‘customized’ Skill requirements are usually very broad Skilled Jobber, or team, completes whole roduct Batch processes Higher volumes and lower variety than for Jobbing Standard products, repeating demand. But can make specials Specialized, narrower skills Set-ups (changeovers) at each stage of production Mass (line) processes Higher volumes than batch Standard, repeat products (‘runners’) Low and/or narrow skills No set-ups, or almost instantaneous ones A mass process – a packing process Continuous processes Extremely high volumes and low variety: often single product Standard, repeat products (‘runners’) Highly capital-intensive and automated Few hangeovers required Difficult and expensive to start and stop the process A service shop – This health club offers some variety within a standard set of facilities and processes A mass service – This call centre can handle a very high volume of customer enquiries because it standardizes its process Source: Royal Bank of Scotland Group Deviating from the ‘natural’ diagonal on the product-process matrix has consequences for cost and flexibility Manufacturing operations process types S ervice operations process types None More process flexibility than is needed so high cost Project Jobbing Batch Mass Continuous None Less process flexibility than is needed so high cost Professional service Service shop Mass service The ‘natural’ line of fit of process to volume/variety characteristics Flow (layout), technology and Job design are all influenced by process positioning Flow Unorganized Technology Little / general Jobs Varied / high discretion Volume Custom furniture maker Machine tool maker Automobile factory Predictable Specialist Routine / low discretion Petrochemical refinery Investment banking Customer service branch Bank call centre Credit card processing Customized sandwich – old process Raw materials Assembly Stored sandwiches Move to outlets sell Take payment Standard sandwich process Customer request The operation of making and selling customized sandwiches Prepare Sandwich materials and customers Assemble as required Take payment Customers ‘assembled’ to sandwiches Bread and base filling Assemble whole sandwich Use standard ‘base? No Yes Outline process of making and selling customized sandwiches Detailed process of assembling customized sandwiches Customized sandwich – new process Assemble whole sandwich Assembly of ‘sandwich bases’ Use standard ‘base? Take ayment Fillings Bread and base filling Stored ‘bases’ Yes Customer request Assemble from standard ‘base’ No Little’s law (a really quite useful law) Throughput (TH) = Work in process (WIP) x Cycle time (CT) Cycle time = 2 minutes WIP = 10 Throughput time = ? Throughput time = 10 x 2 minutes = 20 minutes time (CT) 500 exam scripts need to be marked in 5 days (working 7 hours a day). It takes 1 hour to mark a script. How many markers are needed? What is designed in a product or service? The understanding of the nature, use and value of the service or product A concept A package The group of ‘component’ products and services that provide those benefits defined in the concept The way in which the component products and services will be created and delivered A process The product and service design activity is a process in itself Transformed resources, . g. Technical information Market information Time information The product / service design process whose performance is measured by its Quality Speed Dependability Flexibility Cost Fully specified products and Outputs services Inputs Transforming resources, e. g. Test and design equipment Design and technical staff The stages of product / service design Concept generation Concept screening Preliminary design Evaluation and improvement Prototyping and final design Ideas from customers formally through marketing activities Listening to customers – n a day-to-day basis Ideas from competitor activity – for example reverse engineering Ideas from staff – especially those who meet customers every day Ideas from research and development Broad categories of evaluation criteria for assessing concepts Feasibility – how difficult is it? What INVESTMENT, both managerial and financial, will be needed? What RETURN, in terms of benefits to the operation, will it give? Overall evaluation of the concept Criteria for screening concepts Acceptability – how worthwhile is it? Vulnerability – what could go wrong? What RISKS do we run if things go wrong? Design involves progressively reducing the number of possibilities until the final design is reached CONCEPT Choice and evaluation ‘screens’ Large number of design options Uncertainty regarding the final design TIME One design FINAL DESIGN SPECIFICATON Certainty regarding the final design Design evaluation and improvement.

Free Essays on The Boat To Freedom

The boat quietly departs in the ghostly darkness of the late October night, 1989 hoping to reach the Thailand Gulf. On board are over one-hundred Vietnamese people of all ages, some dispirited, but most happy, and brimming with hope that they will reach the promised land. This intensive escape leaves them vulnerable, and the challenges they encounter are enormous; however, it exhibits their iron will against the corrupt practices of communism. Morning comes to begin a beautiful day. The sky is clear and sunny. The boat rocks slightly by the waves and continues to run at its full speed. The people know so well at the time that there is no going back. Either they will make it or die somewhere in the immense and unforgiving sea. Fear of the uncertainty and the unknown lingers in their minds. Are they heading in the right direction? Will they survive? Will they be hit by the storm or face the cruel and savage Thailand's pirates? Where will they end up...? On the third day, dark clouds are hovering over their heads and strong winds start to blow heavily against their tiny wooden boat. The calm ocean becomes increasingly violent with ferocious waves driving their boat far off course. There is no sight of land, nothing except the rumbling sky, the quivering winds, and the fast trembling heartbeats; the people are crying for help. Soon, they run out of food, raw fish have become their main source of nourishment, but even th at is rare. One can especially hear children whining for food while their parents sit there helplessly. These apprehensive innocent kids do not know what has happened to them, and why they have been put in the boat to never see their home again. Perhaps the assurance of having a delicious American hamburger after these struggles could lighten them. A child interminably in tears asks her mother, â€Å"When are we going home?† And nothing is as painful than to realize that they do not have a home, the communists... Free Essays on The Boat To Freedom Free Essays on The Boat To Freedom The boat quietly departs in the ghostly darkness of the late October night, 1989 hoping to reach the Thailand Gulf. On board are over one-hundred Vietnamese people of all ages, some dispirited, but most happy, and brimming with hope that they will reach the promised land. This intensive escape leaves them vulnerable, and the challenges they encounter are enormous; however, it exhibits their iron will against the corrupt practices of communism. Morning comes to begin a beautiful day. The sky is clear and sunny. The boat rocks slightly by the waves and continues to run at its full speed. The people know so well at the time that there is no going back. Either they will make it or die somewhere in the immense and unforgiving sea. Fear of the uncertainty and the unknown lingers in their minds. Are they heading in the right direction? Will they survive? Will they be hit by the storm or face the cruel and savage Thailand's pirates? Where will they end up...? On the third day, dark clouds are hovering over their heads and strong winds start to blow heavily against their tiny wooden boat. The calm ocean becomes increasingly violent with ferocious waves driving their boat far off course. There is no sight of land, nothing except the rumbling sky, the quivering winds, and the fast trembling heartbeats; the people are crying for help. Soon, they run out of food, raw fish have become their main source of nourishment, but even th at is rare. One can especially hear children whining for food while their parents sit there helplessly. These apprehensive innocent kids do not know what has happened to them, and why they have been put in the boat to never see their home again. Perhaps the assurance of having a delicious American hamburger after these struggles could lighten them. A child interminably in tears asks her mother, â€Å"When are we going home?† And nothing is as painful than to realize that they do not have a home, the communists...

Being a Member of a Family Presents Numerous Challenges Essay Example

Being a Member of a Family Presents Numerous Challenges Essay Example Being a Member of a Family Presents Numerous Challenges Essay Being a Member of a Family Presents Numerous Challenges Essay Introduction: Hook In the human society, a family is a group of persons conglomerated through consanguinity, affinity through marriage or co-residence. Having a good family is an important part of living as it provides persons with moral, social and financial support among others. Directions of Argument Today, balancing between work and family has become an immense challenge among numerous families. Due to the increased economic challenges in todays society, most parents are mandated to work for long hours to achieve their financial objectives. Thesis Statement This essay is a discussion of why being a member of a family presents numerous challenges today due to the increased need to work for long hours to satisfy the family day-to-day financial demands. Argument 1#: Topic Sentence The escalating cost of essential services such as education and healthcare services in U.S. has increased significantly over the last decade. Point 1: This has resulted to numerous couples working in different jobs for long hours in an effort to afford such amenities for their families. Proof: According to the United States Bureau of Statistics, in numerous married couple relations, both spouses work (Bureau of Labor Statistics, 2002). In 2000, approximately 53.2 percent of married spouses were employed (Bureau of Labor Statistics, 2002). Explanation As a result, most couples find it a challenge to balance between their demanding professions and their families. Point 2: Today, the roles of men and women in the American society has reversed. Proof: According to an article published in the New York Times, 4 in every 10 households with children under 18 includes a mother who is either the primary or the sole breadwinner in the homestead (Rampbell, 2013). Explanation This is because unlike in the past, more women today have taken up various roles in the society that were previously reserved for men. Such roles include leadership positions, formal employments, army and management positions among others. In reference to such jobs, some of the professions that women engage in can be very demanding. For instance, a soldier woman can go for months without being in a position to see her family. Point 3: The evolution of organized childcare managed support services for working mothers in the U.S. has also hampered the ability of persons to be with their families. Proof: In the U.S., one-third of all children belonging to employed mothers attain managed care services in organized facilities like the day care centers (CHUSA, 2014). Explanation For this reason, a significant number of parents prefer to leave their young children in managed care centers and then use their time to perform other economic functions. In most cases, such functions entail working for long hours to earn some income. Conclusion: Restatement of Thesis Today, being a member of the family has become a big challenge to most parents due to the need to work for long hours so as to satisfy the family day-to-day financial demands. Direction of Arguments #1). The need to work for long hours has been facilitated by the increased costs of essential services such as education and healthcare services in the nation. #2). The role of women in the American society has also changed and today, a large proportion of women are working for long hours in professions that were previously reserved for the men. #3). The emergence of management childcare services has enabled women to work for long hours in the fields of career. Final Thought It is evident that most persons in the American society find it a challenge to be with their families. This is because most of them work for long hours in an effort to fulfill the financial obligations for their family members. Nevertheless, it is important for every person to be part of a family unit. This is because it aids in their successful growth as well as development. References Bureau of Labor Statistics. (2002). Both spouses work in most married-couple families. Retrieved November 21, 2016, from The Bureau of Labor Statistics: bls.gov/opub/ted/2001/apr/wk4/art02.htm CHUSA. (2014). Parental Employment and Child Care. Retrieved November 23, 2016, from Child Health USA 2014: http://mchb.hrsa.gov/chusa14/population-characteristics/parental-employment-child-care.html Rampbell, C. (2013, May 29). U.S. Women on the Rise as Family Breadwinner. Retrieved November 23, 2016, from The New York Times: nytimes.com/2013/05/30/business/economy/women-as-family-breadwinner-on-the-rise-study-says.html

Adolf hitler Essay Example | Topics and Well Written Essays - 250 words

Adolf hitler - Essay Example He further labelled Jewish sympathizers as a threat to the superiority of Germany. Therefore, in relation to his objective of making a better and stronger Germany, Hitler used coercion to win the support of majority of his countrymen. â€Å"Beer Hall Putsch† is a phrase coined by the Germans to refer to the Nov. 23, 1923 attempted coup d’à ©tat against the Germany government by Hitler and the Nazi Party. The organizers sought to first capture the control of the state government in Bavarian city, protest in Berlin, and then overthrow the federal government. The ultimate goal of Hitler and fellow conspirators was to create a new government which will create a united Greater German Reich whose citizenship would have been informed by race. The coup however was unsuccessful due to poor organization and the failure by the conspirators to capture key areas including communication centres and offices. Hitler and other coup leaders were arrested and prosecuted. However, these coup leaders coercively redefined their attempted coup as a heroic act which was meant to save the superior Germany race. They rallied the greater nation to believe in them leading to the eventual rise of the Nazi and Hitler into

The use of children in the Cambodian genocide Essay

The use of children in the Cambodian genocide - Essay Example The farms today are known as the 'killing fields' as so many died through over work, hunger or slaughter. Amongst the victims were the children who were taken away from their families and made to live in communal groups where the only family they were to consider was that of the Khmer Rouge. This essay sets out to show the lives these children led The Khmer Rouge wanted to eradicate anyone suspected of "involvement in free-market activities" including professionals, almost everyone with an education and who had connections to government and those who lived in the cities. The regime did not want the risk of anybody having the consciousness to rebel against their movement. The country was predominantly Buddhist and its monks were disrobed, half of them were killed and the rest forced to work in the harsh agricultural labor camps and Christianity was also abolished. They also believed that parents were corrupted by capitalism and felt that children should be separated from their families in order to ensure that they were swathed in socialist ideology. Children were taught methods of torture and were instrumental to the leadership of the communist dictatorship. The regime saw that children could be molded and indoctrinated to their political ideology; they were able to condition the children to believe that they were not the enemy and in doing so developed a community of children who were not able to identify with any other than the Khmer Rouge. The intention was to destroy the family values that were part of their culture and irradiate the trust that is held within family and community networks. Community and family members were expected and given incentives to spy on each other and this shattered networks and dissolved any trust through imbedding deeply rooted fear [1]. The young minds of children were easier to manipulate and the regime were able to brainwash children to such an extent that they would report back to the regime if their own parents were being antagonistic, the regime taught them to believe that they were their family and that their own kin were their enemies. Slogans such as 'I'm not killing my mother -I'm killing my enemy' were planted into their minds [2]. A propaganda song entitled, "We Children Love Angkar boundlessly," compared pre-revolutionary children to orphans abandoned by "the enemy", their parents, an excerpt from the song follows: [1] Colletta, N. J., & Cullen, M. L. (2000). The nexus between violent conflict, social capital and social cohesion: Case studies from Cambodia and Rwanda [electronic version]. [2] Martin, M. A. (1994). Cambodia: A shattered society. Berkeley, California: University of California Press Before the revolution, children were poor and lived lives of misery, Living like animals, suffering as orphans. The enemy abandoned all thought of us Now the glorious revolution supports us all [3]. The book the 'Children of Cambodia's Killing Fields' contains 29 essays from children who suffered at the hands of the regime. The children speak about their astonishing and painful experiences at the hands of the Khmer Rouge, how their families were torn apart to assist the social engineering plan of the regime, how

What is the association between nursing staffing levels and adult Article

What is the association between nursing staffing levels and adult patient falls in hospitals - Article Example At hospital level, number of registered nurses should be increased to monitor patients in the wards and provide the required services. From records, increased number of nurses decreases falls among adult patients (Griffiths et al., 2014). The nursing staffs should be given education so as to understand their roles and associated problems. On the other hand, nurses’ needs should be well catered to motivate them and have enabling environment to offer their services. It can be achieved by considered them as financial assets that have a critical role in the hospital. However, in various unit-levels, experienced nurses should be retained at whichever cost. Evidence has shown that inexperience and lack of the necessary skill have contributed significantly to the falls among adult patients (Griffiths, et al., 2014). During hiring, nurse skill mix should be considered. It involves taking care of skill level and experience in order to improve services. From the records, it is not clear about the component of a nurse that contributes most to the reduction of fall. It is, therefore, crucial to establish this through research and make recommendations. The future studies should as well focus on evaluating the role of non-registered nurse staffs to the increased falls in the hospitals. Their relationship should be validated through replication of studies. Griffiths, P., Ball, J., Drennan, J., Liz, J. & Michael, S. (2014). The association between patient safety outcomes and nurse / healthcare assistant skill mix and staffing levels & factors that may influence staffing requirements: National Nursing Research Unit. New York, 1,

Breach of contract - contract law Essay Example for Free

Breach of contract contract law Essay Spanish Contract Law provides a broad notion of breach of contract for any behavior that departs from the specified behavior in the contract in any way (time, quality, substance, etc.) or is not specially justified on legal grounds (actions forbidden by the government are not breaches since they are justified on a legal ground). The general benchmark to determine breach is the contract agreed by the parties themselves, and not external notions. However, external notions are used in important situation such as the consumers market where the consumers expectations are the primary benchmarks to assess quality and performance since there is not an explicit contract. External notions are also important in other market, where a third party may have some duty or responsibility over the contract, and therefore, is responsible (at least in part) for any potential breach. The reason for breach does not exclude the breach. What matters is the breach. The analysis of breach takes place in objective terms. Subjective factors generally do not exclude breach, although they may affect remedies. In certain contractual areas, breach of duty and fault are generally required (professional contracts, management contracts: breach requires violation of a duty of care or a duty of loyalty). In professional contracts, the fault may be of a professional who was in contract with the firm, and in management contracts, it may be the fault of the manager. 2) Remedies: Spanish Contract Law provides a wide range of general remedies for breach of contract: †¢ Specific performance: the court forces the breacher to act as it was established in the contract. If for example, the contract stipulated that the promiser had to give the promisee a product of quality 2 and he delivers a good of quality 1, then as remedy the court force the promiser to deliver a good of quality 2. †¢ Damages: the court force the breacher to pay a certain amount of money  (damages) to the other party as compensation. It is a monetary remedy. The court calculate the amount to be paid. †¢ Liquidated damages: these are also monetary compensation, but with the difference that they are not calculated by the court, but they are instead specified in the contract itself. One example are the soccer players contracts, or sale contracts that specifies the amount to be paid for each day of delay. Other general remedies that we can find are: †¢ Termination: if a party suffers a breach, it can contract with another party and abandon its contractual obligation. If the breacher does not agree with this, court is necessary. †¢ Reduction of prices: in case of breach of a party, a general remedy is to reduce the price to equilibrate the contract. Generally, it is the aggrieved party who chooses the remedy to be imposed. 3) Specific performance: Specific performance is a remedy for breach characterized by the fact that a failed performance or departure from required action by the contract will be imposed upon breaching party. It is also characterized by several material variants of the remedy such as: forced delivery, forced action, injunction not to do, repair defective performance and replace non-conforming good. In the case of the injunction not to do, the court oblige the breacher not to do something, such as obliging a CEO to work for the competition if in the contract it was stipulated that he cannot. Specific performance conceptually includes repair and replacement of consumer goods. The main issue with specific performance, when it is feasible, is the issue of the balance of benefits and costs of the remedy. Specific performance implies that the breacher perform as the contract establishes. However, sometimes, the cost of this performance may be higher than the benefit in social welfare terms. Take the example of the mining firm, which has a contract with the owner of the land to mine for 10 years and then clean the land. When the 10 year pass, the firms breaches the contract and refuse to clean. The cost of cleaning the land is 20 millions, and the benefit for the  owner is 1 million. So if the court imposes a specific performance to firm, society will loose 19 millions. A good alternative would be to impose damages to the firm, which would be preferred by the owner, since an agreement between the firm and the owner will be reached that maximize the social welfare. In these cases, performance may be more costly than its value for promisee: performance may be ex post inefficient. There are both positive and negative features of specific performance as a remedy. As positive features, we can distinguish low informational requirements to apply remedy (avoids cost of error linked to estimating damages) and the party aggrieved by breach appears to be satisfied in its promissory expectation. As negative features, we find performance may be more costly than its value for promisee (performance may be ex post inefficient), requires a court order and takes time, for complex performances requires costly and difficult supervision by court and performance by a party forced to comply with contract may be perfunctory (lowest effort) at best. 4) Damages: Damages are understood as general remedies that can be applied to all types of contracts and breaches of contracts. It is a remedy defined in very broad terms: amount of money to compensate any harm suffered by the injured party as a consequence of any breach of contract. We can differentiate between two kinds of damages: expectation and reliance damages. This is why it is a remedy with a variable extension. Expectation damages: Expectation damages is the sum of money that will give the party damaged the same amount of welfare and utility than if the contract would not have been breached and the final result would have been attained. Therefore, the breach party would have to pay the aggrieved party an amount of money that would compensate for the harm caused and in addition an amount of money equal to the value of the performance for this party. There are however some problems with expectation damages since they are difficult to compute and some instances of moral hazard may appear. Those who seek for damages have to provide evidence of both the existence and amount of damages. This requirement has some exceptions in case of harm in re ipsa: illegitimate use of a productive good, deprivation of a productive good, and few other examples. Expectation damages is the general rule in Spanish Law for breach of contract. It is the damage measure that accompanies termination for breach and the replacement measure of specific performance. It is awarded when there is a breach of representations and warranties, advertising and promotional communications and in cases of pre-contractual fraud that are equivalent to breach of contracts. How can we compute expectation damages? When goods or services admit substitutes or cover transactions to avoid the negative consequences of the other party’s breach of contract, the price of these transactions is relevant. If the seller breaches the contract and the buyer has bought a good, generally fungible, then the expectation damages will be equal to the difference between the price of the substitute and the price established in the contract: Psub-Pc. If the buyer breaches the contract and the seller celebrates a cover sale the expectation damages would be equal to the difference between the price established in the contract and the price of the new sale: Pc-Psub. Other ways of computing expectation damages are the following: Market damages: (for fungible good with market price) buyer will receive expectation damages consisting of the difference between the market price when the breach of contract took place (Pm) and the contract price (Pc). Seller will receive the opposite difference. Expectation damages present some limitations that reduce it scope and amount. One of this limitations is the foreseeability rule. This rule state that the breacher should only be liable for the things that are foreseen or could have foreseen at the time of contracting and that are necessary  consequence of his failure to perform. For instance, if the foreseeable harm of a breach is 100 and the aggrieved party end up suffering a loss of 1000, the foreseeability rule states that damages will amount only to 100. The foreseeability rule gives incentives to give information in the time of contracting. Those who suffer from harm must declare the value of the performance. In tort law, there is no foreseeability rule, you pay the actual damage. Another limitation is the duty to mitigate damages: the aggrieved party is under the duty to mitigate damages that the other contracting party has caused with her / his breach of contract. Reliance damages: Reliance damages: sum of money that will give the party damaged the same amount of welfare and utility than if the contract would not have taken place (the initial situation). This is why reliance damages are generally lower than expectation damages. Reliance damages cover expenses for the injured party derived from concluding the contract, specific investments that the injured party has made in reliance of performance of the contract by the other party and opportunity costs. Limited assets: Damages do not always work well. Sometimes, individuals can bear the payment of these damages, and therefore, they will have incentives to reduce them. However, this is not always the case. When the breacher has not enough assets to pay damages up to the point of optimal care, damages do not work well, because people will not pay for the consequences of their acts, and therefore, their level of care will be the optimal according to what they can pay, and not what they should pay. This is known as judgement proof problem. Damages for pain and suffering: The traditional position of the Spanish Supreme Court and Spanish Courts is: †¢ To accept damages for pain and suffering for breach of contract †¢ To award damages for pain and suffering with a relative amplitude and generosity. †¢ To award damages for pain and suffering with several functions: †¢ To avoid the problems of calculating and justifying the amount of the damage award †¢ To compensate harm in personality rights (right to life, liberty, honor, etc.). †¢ To compensate non-patrimonial values joined to economic goods and rights (discomfort, inconvenience, disappointment, frustration) †¢ To punish intolerable or egregious behaviors of breach of contract. When an individual suffer harm, her utility decreases (she goes form point A to point B, but her utility function for money will not change). If this harm is economic, we can compensate this harm with money, which will leave her at point A again. However, the harm that an individual can suffer may be non-economic, and for the same amount of money her utility decreases (her utility function changes). Money cannot restore the initial utility (a huge amount would be needed). This is the case of pain and suffering (accident and death of a relative, discomfort, etc). This is why it is useless to take insurance for death, since it would not compensate the harm. The hairy hand example: What is the difference between expectation and reliance damage? Lets look at an example. An individual was injured in his hand and lost 50% of his use. He entered in a contract with a doctor who promised to reestablish the hand to a 100% of use in exchange for quantity of money. Before the contract was made, the individual was situated in an indifference curve that related all the  combination of hand use and money that let the individual indifferent. We assume that the individual is willing to give up hand use for money. After the contract and operation, the individual was worse off, with 25% of use. What should the doctor pay as damage? If expectation damages are used, the doctor should pay the individual a quantity of money that together with the 25% of hand use leave him with the same utiity as if the contract had succeded and he had 100% of use (situate him in a higher indifference curve). If reliance damages are imposed, the doctor should pay the individual a quantity of mon ey that, together with the 25% of hand use, leave him with the same utility as if the contract did not take place, with 50% of hand use (situate him in the initial indifference curve). 5) Liquidated damages: Liquidated damages are damages for breach that are not determined ex post breach by a Court or arbitration panel, but ex ante by the contract parties themselves into the contract. Such possibility of â€Å"privately stipulated† remedies for breach is acknowledged by most legal systems, typically in the form of payment of money, although other possibilities may exist. They typically replace Court damages and they can be agreed as added penalty for breach. The most important issue is whether Courts are forced to enforce liquidated damages, or they may disregard, or reduce, the amount of the liquidated damages award. The reasons why Courts allow liquidated damages are: †¢ Freedom of contract †¢ A large liquidated damages clause may be necessary to induce promisee to find promise credible and the contract sustainable. †¢ Parties are in a better position than Courts to assess benefits and costs of determining a given amount. †¢ Liquidated damages compensate systematic underestimation of damages by Courts. If liquidated damages are higher than the expectation damages, then the court will apply the second ones. There are however some economic arguments that may lead to reduce or at least control the level of liquidated damages clauses: †¢ â€Å"Excessive† damages clauses resulting from incorrect predictions or forecasts about future outcomes. †¢ External shocks unforeseen by parties that produce an unexpected increase in the damages payment. †¢ True â€Å"uncertainty† about future costs for one party. †¢ Behavioral biases that lead party to underestimate the true adverse impact of a damages clause (the â€Å"deferred cost problem†): †¢ Over-optimism concerning future performance and costs (the example of the gym) †¢ Hyperbolic discounting of future outcomes We can see the liquidated damages as barriers to entry. An excessive amount of LD is beneficial for the parties to the detriment of a third party who  may bid for the services of breaching party. Promisor agrees to pay an amount larger than ED, in exchange of higher price. Promisee uses high liquidated damages to extract larger payment from a third party interested in performance by promisor: larger payment from third party increases the surplus to the contract parties, that is shared between them. Also, excessive payment of third party are made possible by excessive damages clauses, which reduce efficient entry by third parties, and prevents them from successfully bidding for promisor’s performance. That is why the goal of reducing â€Å"excessive† liquidated damages is not to protect the breaching party, but third-parties. Sometimes, excessive LD for signaling are unwanted, since an unforeseeable contingency may appear that will cause a breach in the contract. A pooling equilibrium may be more desirable than a separating one when the distortion caused by the penalty on the â€Å"good type† is large enough. 6) Termination: Among the general remedies for breach, the last one is termination (or rescission, or cancellation, as it may also be called in Common Law jurisdictions). This remedy entitles the aggrieved party to cancel the contractual relationship with the breaching party, eliminating the obligations arising from the terminated contract. Once the contract is terminated the parties should give back what was received under the contract, unless the goods are now in lawful possession of a third party. In this case, the value of the goods would replace the goods themselves. The elimination of the effects of the contract is retroactive: it is considered that the contract did not exist. Spanish courts have established that termination does not require a lawsuit. However, if the other party disputes the termination or its conditions, restitution would require a lawsuit. Courts do not determine termination, but declare whether termination was or not properly effected by the party. The most contested issue about termination is when is termination available as a remedy. It is clear that not every breach or non-performance allows the  aggrieved party to terminate, but a qualified breach (material or fundamental breach) is required. We can define it as follow: †¢ Relevance: the breach must affect the central obligations or duties under the contract and not merely ancillary or incidental duties. †¢ Duration: the breach should not be merely sporadic or transitory, but likely to be repeated or continuing. †¢ Importance: the breach must substantially affect the interests of the non-defaulting party. Termination does not go alone, it does not exclude damages, and in fact it is naturally accompanied by damages payment.