BA101 Midterm 2
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