BA101 Midterm 2

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statistical process control

A process of testing statistical samples of product components at each stage of production.

operations management

A specialized area in management that converts or transforms resources (including human resources) into goods and services.

Where would you look to get information about a company's working capital?

Current assets and liabilities

Possession Utility

Doing whatever is necessary to transfer ownership from one party to another, including providing credit, delivery, installation, guarantees, and follow-up service.

Max Weber's Organizational Theory

Job descriptions Written rules, decision guidelines and detailed records Consistent procedures, regulations and policies Staffing and promotion based on qualifications

assets =

Liabilities + Owner's Equity

long term forecast

Predicts revenues, costs, and expenses for a period longer than one year and sometimes as long as five or ten years.

Americans with Disabilities Act of 1990

Prohibits employers from discriminating against qualified individuals with disabilities in hiring, advancement, or compensation and requires them to adapt the workplace if necessary.

budget

Sets forth management's expectations for revenues and allocates the use of specific resources throughout the firm.

trade credit

The practice of buying goods or services now and paying for them later.

Equal Employment Opportunity Act

U.S act that amended Title VII and gave the Equal Employment Opportunity Commission authority to implement its administrative findings and conduct its own enforcement litigation.

Gantt Chart

a bar graph that clearly shows what projects are being worked on and how much has been completed at any given time

return on equity ratio (ROE)

a company's profit for each dollar of stockholder's investment in the firm; net income/owner's equity

Equal Employment Opportunity Commission (EEOC)

a federal agency designed to regulate and enforce the provisions of Title VII

social commerce

a form of electronic commerce that involves using social media, online media that supports social interaction, and user contributions to assist in the online buying and selling of products and services

equity

a manager should treat employees and peers with respect and justice

recruitment

a set of activities for obtaining the right number of qualified people at the right time

job analysis

a study of what employees do who hold various jobs titles

job description

a summary of the objectives of a job, type of work to be done, responsibilities, working conditions, relationship of job to other functions

virtual corporation

a temporary network made of replaceable firms that join and leave as needed

annual report

a yearly statement of the financial condition, progress, and expectations of an organization

staff personnel

advise and assist line personnel in meeting their goals, and include those in marketing research, legal advising, information technology, and HR management

operating budget

aggregate of the firm's other budgets and summarizes its proposed financial activities

training and development

all attempts to improve productivity by increasing an employee's ability to perform

supply chain

all the linked activities various organizations must perform to move goods and services from the sources of raw materials

clear communication channels

all workers should be able to reach others in the organization quickly and easily

hierarchy of authority

all workers should know to whom they report

degree of centralization

amount of decision making power vested in top management should vary by circumstances

Program Evaluation and Review Technique (PERT)

analyze the taste to compete a given project, estimate the time needed to complete each task, and compute the minimum time needed to complete the whole project

financial planning

analyzing short-term and long-term money flows to and from the firm

direct marketing

any activity that directly links manufacturers or intermediaries with the ultimate consumer

ratio analysis

assessment of a firm's financial condition using calculations and financial ratios developed from the firm's financial statements

secured loan

backed by collateral, something valuable such as property

inbound logistics

brings raw materials, packaging, other goods and services, and information from suppliers to producers

Title VII of the Civil Rights Act of 1964

brought the government directly into the operations of human resource management. Prohibits discrimination in hiring, firing, compensation, apprenticeships, training, terms, conditions, or privileges in employment

computer aided design (CAD)

businesses ranging from construction companies to carmakers to video game designers depend on 3D modeling software to create new products

financing (cash flow)

cash raised from the issuance of new debt or equity capital or cash used to pay business expenses, past debts, or company dividends

operations (cash flow)

cash transactions associated with running the business

investments (cash flow)

cash used in or provided by the firm's investment activies

ISO 14001

collection of the best practices for managing an organization's impact on the environment

economies of scale

companies can reduce their production costs by purchasing raw materials in bulk

benchmarking

compares an organization's practices, processes, and products against the world's best

Materials Requirement Planning (MRP)

computer based operations management system that uses sales forecasts to make sure needed parts and materials are available at the right time and place

computer-integrated manufacturing (CIM)

computers control the production processes

quality control

consistently producing what the customer wants while reducing errors before and after delivery

statistical quality control

continually monitor all phases of the production process and ensure quality is being built into the product from the beginning

production

creation of finished goods and services using the factors of production: land, labor, capital, entrepreneurship, and knowledge

Current Ratio

current assets/current liabilities ; do i have enough cash to pay my bills

unsecured bond

debenture bond, backed only by the reputation of the issuer

Intermediaries create exhange efficiency by

decreasing the number of contacts needed to establish marketing exchanges

production management

described activities that helped firms create goods

flexible manufacturing

designing machines to do multiple tasks so that they can produce a variety of products

formal organization

details lines of responsibility, authority, and position

organizing

determining what work needs to be done and then dividing up the tasks among the three of you

cash flow

difference between cash coming in and cash going out of a business

line organizations

direct two way lines of responsibility, authority, and communication running from the top to the bottom of the organization, with everyone reporting to one supervisor

unity of command

each worker is to report to one boss

self managed

empowered to make decisions without management approval Work best when leadership is shared

channels of distribution

enhance communication flows and the flow of money and title to goods

Office of Federal Contract Compliance Programs (OFCCP)

ensures that employers doing business with the federal government comply with the nondiscrimination and affirmative action laws

Fair Labor Standards Act

established a minimum wage and overtime pay for working more than 40 hrs a week for employees who are not otherwise exempt. Amendments expanded classes of workers covered, raised the minimum wage, redefined regular time work, raised overtime payments, and equalized pay scales for men and women

National Labor Relations Act of 1935

established collective bargaining in labor-management relations and limited management interference in the right of employees to have a collective bargaining agent

cash budget

estimates cash inflows and outflows during a particular period

performance appraisal

evaluation that measures employee performance against established standards in order to make decisions about promotions, compensation, training, or termination

financial managers

examine financial data prepared by accountants and recommend strategies for improving the financial performance of the firm

flat organizational structures

fewer layers of management and a broad span of control (many people report to each manager)

statement of cash flows

financial statement that reports cash receipts and disbursement related to the firm's three major activities

Where would you look to get information about a company's investment in themselves?

fixed assets

Civil Rights Act of 1964

for firms with 15 or more employees, outlaws discrimination in employment based on sex, race, color, religion, or national origin

capital budget

forecasts a firm's spending plans for major asset purchases that often require large sums of money, like property, buildings, and equipment

purchasing

function that searches for high quality material resources, finds the best suppliers, negotiates the best price for quality goods and services

core competencies

functions a firm can do as well or better than any other organization in the world

division of labor

functions are to be divided into areas of specialization such as production, marketing, and finance

rack jobbers

furnish racks or shelves full of merchandise

financial accounting

generates financial information and analyses for people primarily outside the organization

line of credit

given amount of unsecured short term funds a bank will lend to a business, provided the funds are readily available

flextime plan

gives employees some freedom to choose which hours to work, as long as they work the required number of hours to complete their assigned tasks

360 degree review

gives managers opinions from people at different levels to get a more accurate idea of the worker's abilities

risk/return trade off

greater the risk a lender takes in making the loan, the higher the rate of interest

cross functional self managed teams

groups of employees from different departments who work together on a long term basis

inverted organization

has contact people at the top and top management at the bottom

Operations Management Planning

helps solve many of the problems in the service and manufacturing sectors

change

how much higher or lower the price is today than yesterday

leverage ratio

how well you used owners' investment to create a bigger company and the degree to which the company financed growth through debt as opposed to equity; assets/equity

vestibule training

in classrooms with equipment similar to that used on the job to that employees learn proper methods and safety procedures before assuming a specific job assignment

fringe benefits

include sick leave pay, vacation pay, pension plans, and health plans that provide additional compensation to employees beyond base wages

merchant wholesalers

independently owned firms that take title to the goods they handle

managerial accounting

information and analysis to managers inside the org to assist them in decision making

orientation

initiates new employees into the organization

Affirmative Action

intended to "right past wrongs" by increasing opportunities for minorities and women

multilevel marketing

involves hiring independent contractors to sell products to their personal network of friends and colleagues and to recruit new salespeople in return for a percentage of their commissions

secured bond

issued with collateral, such as real estate, equipment, or other pledged assets

tall organizational structures

layers and layers of management

chain of command

line of authority that moves from the top of the hierarchy to the lowest level

continuous process

long production runs turn out finished goods over time

Where would you look to get information about a company's financing strategy?

long term liabilities and owners equity

capital expenditures

major investments in either tangible long term assets such as land, buildings, and equipment, or tangible assets such as patents, trademarks, and copyrights

time utility

making products available when consumers need them

authority

managers have the right to give orders and the power to enforce obedience

outbound logistics

manages the flow of finished products and information to business buyers and ultimately to consumers like you and me

factor

market intermediary that agrees to buy the firm's accounts receivable at a discount for cash

agents/brokers

marketing intermediaries that bring buyers and sellers together and assist in negotiating an exchange but do not take title to the goods

wholesaler

marketing intermediaries that sell to other organizations

order

materials and people should be placed and maintained in the proper location

net sales to total assets

measures a company's ability to generate sales in relation to assets; net sales/total assets

Liquidity Ratios

measures a company's ability to turn assets into cash to pay in short term debts

return on assets ration (ROA)

measures a company's profit for each dollar of assets it owns; net income/total assets

return on sales ration (ROS)

measures a company's profit for each dollar of sales it makes; net income/total sales

debt to total assets ratio

measures percentage of funds that represent debt provided by creditors; total debt/total assets

average collection period ratio

measures the average number of days it takes to collect accounts receivables; credit sales/accounts receivable

accounts payable period ratio

measures the avg number of days it takes to pay its accounts receivable; purchases/accounts payable

Quick (Acid Test) Ratio

measures the cash, marketable securities (such as stocks and bonds) and receivables of a firm compared to its current liabilities ; (current assets - inventories)/current liabilities

debt to owners' equity ratio

measures the degree to which the company is financed by borrowed funds that must be repaid; total liabilities/owner's equity

times interest earned ratio

measures the extent to which earnings can decline before the company is unable to meet its annual interest costs; EBIT/Interest

average inventory turnover ratio

measures the number of times average inventory is sold out, during the accounting period; costs of goods sold/inventory

debt to net worth ratio

measures what the business owed compared to what its worth; total debt/tangible net worth

CPA

meets state requirements for education and experience, find careers as private or public accountants

contractual distribution system

members are bound to cooperate through contractual agreements

venture capital

money invested in new or emerging companies that some investors believe have great profit potential

equity financing

money raised from within the firm, from operations or through the sale of ownership in the firm

unsecured loan

more difficult to obtain because it doesn't require collateral

materials handling

movement of goods within a warehouse, from warehouses to the factory floor, and from the factor floor to various workstations

earnings per share

net income/number of shares

enterprise resource planning (ERP)

newer version of MRP, combines the computerized functions of all the divisions and subsidiaries of the firm into a single integrated software program that uses a single database

shares

number of outstanding shares of stock

corporate distribution system

one firm owns all the organizations in the channel or distribution

book value

one share's claim against the profit of the company

Information Utility

opening two way flows of info between marketing participants

span of control

optimal number of employees a manager supervises or should supervise

retailer

organization that sells to ultimate consumers

bureaucracy

organization with many layers of managers

Marketing Intermediaries

organizations that assist in moving goods and services from producer to business and business to consumer

Age Discrimination in Employment Act of 1967

outlawed employment practices that discriminate against people 40 and older

process manufacturing

part of production that physically or chemically changes materials

contingent workers

part time, temporary, seasonal workers, independent contractors, interns, and co-op students

why does marketing need intermediaries?

perform marketing functions faster and cheaper than most manufacturers

place utility

placing products where people want them

logistics

planning, implementing, and controlling of the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit

short term forecast

predicts revenues, costs, and expenses for a period of one year or less

cash flow forecast

predicts the cash inflows and outflows in future periods, usually months or quarters

financial control

process in which a firm periodically compares its actual revenues, costs and expenses with its budget

Human Resource Management

process of determining human resource needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals

selection

process of gathering information and deciding who should be hired under legal guidelines to serve the best interests of the individual and the organizations

factoring

process of selling accounts receivable for cash

form utility

producers change raw materials into useful products

administered distribution system

producers manage all of the marketing functions at the retail level

intermittent process

production run is short and the producer adjusts machines frequently to make different products

term-loan agreement

promissory note that requires the borrower to repay the loan with interest in specified monthly or annual installments

Comprehensive Employment and Training Act of 1973

provided funds for training unemployed workers

public accountant

provides accounting services to indivivudals or businesses

service utility

providing fast, friendly service during and after the sale and teaching customers how to best use products over time

Intensive distribution

puts products into as many retail outlets as possible, including vending machines

assembly process

puts together components to make a product

ISO 9001

quality and assurance standards

leverage

raising funds through borrowing to increase the firm's rate of return

cost of capital

rate of return a company must earn in order to meet the demands of its lenders and expectations of its equity holders

restructuring

redesigning an organization so it can more effectively and efficiently serve its customers

debt financing

refers to funds raised through various forms of borrowing that must be repaid

Occupational Safety and Health Act of 1970

regulates safety and health conditions in most private industries and some public sector organizations

line personnel

responsible for directly achieving organization goals and include production workers, distribution people, and marketing personnel

auditing

reviewing and evaluating information used to prepare a company's financial statements

telemarketing

sale of goods and services by telephone

wholesale sale

sale of goods and services to businesses and institutions like schools and hospitals for use in business or to wholesalers or retailers for resale

online retailing

selling goods and services to ultimate consumers online

direct selling

selling to consumers in their homes or workplaces

critical path

sequence of tasks that takes the longest time to compete

cash and carry wholesalers

serve mostly smaller retailers with a limited assortment of products

Six Sigma Quality

sets a benchmark of 3.4 defects per million opportunities, detects potential problems to prevent their occurrence

real time

simply means the present moment or the actual time in which an event takes place

drop shippers

solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer (bulky products)

matrix organization

specialists from different parts of the organization work together temporarily on specific projects, but still remain part of a line and staff structure

Equal Pay Act of 1963

specified that men and women doing equal jobs must be paid the same wage

espirit de corps

spirit of pride and loyalty should be created among people in the firm

Hierarchy

system in which one person is at the top of the organization and there is a ranked or sequential ordering from the top down of managers and others who are responsible to that person

informal organization

system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority separate from the formal organization

mass customization

tailoring products to meet the needs of a large number of individual customers

production process

taking the factors of production and using those inputs to produce goods, services, and ideas. Planning, routing, scheduling, and the other activities are the means to accomplish the objective - outputs (goods, services, ideas)

dividend

the cash disbursement of profit to owners

finance

the function in a business that acquires funds for the firm and manages those funds within the firm

financial management

the job of managing a firm's resources to meet its goals and objectives

ISO

the nongovernmental organization established to promote the development of world standards to facilitate the international exchange of goods and services

departmentalization

the process of setting up individual departments to do specialized tasks

management development

the process of training and educating employees to become good managers, and then monitoring the progress of their managerial skills over time

lean manufacturing

the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, less defects, and less engineering time to develop a new product

retail sale

the sale of goods and services to consumers for their personal use

computer aided manufacturing (CAM)

the use of computers in the manufacturing of products

channel of distribution

the whole series of marketing intermediaries, such as agents, brokers, wholesalers, and retailers, that join together to transport and store goods in their path from producers to consumers

just-in-time inventory control

to cut costs, JIT systems keep a minimum of inventory on the premises, and deliver parts, supplies, and other needs just in time to go on the assembly line

tax accounting

trained in tax law and is responsible for preparing tax returns or developing tax strategies

job sharing

two or more part time employees share one full time job

exclusive distribution

use of only one retail outlet in a given geographic area

networking

uses communications technology and other means to link organizations and allow them to work together on common objectives

selective distribution

uses only a preferred group of the available retailers in an area

close

value of a share at the end of a trading day

Market Capitalization

value of the company in the market

organizational chart

visual device that shows relationships among people and divides the organization's work

Utility

want-satisyfing ability, or value, that organizations add to goods or services by making them more useful or accessible to consumers than they were before

centralized authority

when decision making is concentrated at the top level of management

decentralized authority

when decision making is delegated to lower level managers and employees more familiar with local conditions then headquarters management could be

organization culture

widely shared values within an organization that foster unity and cooperation to achieve common goals

compressed workweek

work schedule that allows employees to work a full number of hours per week but in fewer days

subordination of individual interests to the general interest

workers are to think of themselves as a coordinated team

private accountant

works for a single firm, government agency, or nonprofit organization

job specifications

written summaries of the minimum qualifications required of workers to do a particular job


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