BMGT110F quiz 4, BMGT110F quiz 3 review, BMGT110F Quiz 1 Study, BMGT110F Quiz 2

free trade agreements

Goal is to increase trade among countries by reducing tariffs (NAFTA - no tariffs between US, Canada, and Mexico)

Choosing a Strategy

Each company individually must try to preempt its rivals. Companies must collectively coordinate with each to be aware of the mutual effects of their actions.

stakeholder framework

Helps identify internal and external stakeholders Helps monitor and respond to needs, values, and expectations of stakeholder groups

product screening

Reduces the number of new products a firm is working on to focus on the most promising.

web 1.0

Refers to the World Wide Web during its first few years of operation between 1991 and 2003. - content supplied by site affiliates, consumed passive by end users

e-retailing

The selling of goods and services over the Internet.

inbound logistics

arranging the inbound movement of materials, parts, and/or finished inventory from suppliers

competitive advantage and value

as Michael Porter says: competitive strategy is about being different. this means to deliberately choose a different set of activities to deliver a unique mix of value

Management by Objectives (MBO)

goal-setting, cycle of discussion, review, and evaluation

top management

goals and vision for the firm example: president, vice president

key indicators of economic health

gross domestic product (GDP), gross output, business cycle, unemployment rate, inflation

common markets

group of countries imposing few or no duties on trade with one another and a common tariff on trade with other countries

focus groups

group of people who meet under the direction of discussion leader to communicate opinions

leading

guiding, motivating, and teaching employees

the scope of operations and supply chain strategy

has expanded to a global basis, particularly for businesses pursuing a global business strategy

Why is operations management important?

helps ensure that business operations are efficient and effective through the rational management of resources and distribution of goods and services.

price discrimination from a firm's perspective

ideally from the firm's perspective, the firm would be able to charge each person his or her exact willingness to pay for an item

perfect competition

identical sellers and product, no one can unilaterally influence price

sustainable operations has become a critical objective strategy

it should be approached by forming cross-functional teams that include suppliers. measuring and reducing the environmental, social, and economic impact in all phases of design, operations, and distribution are the path of action

push marketing

means to market to your direct customers - typically focuses on product attributes - examples including advertising, coupons, and direct mail

place

means to put the product in a place where people will buy it, where will you sell? to whom?

efficiency

measured by how much you produce given the amount of resources you use

Dimensions of quality in services: SERVQUAL

measurement of how much close a service is in these dimensions to what the customer expects

controlling

measurement, monitoring, correcting, and rewarding

Types of Competition

monopoly, oligopoly, monopolistic competition, pure competition

interest rates: lower rates

more borrowing by businesses and more spending by individuals

decentralized

more decisions made by employees and front-line management (democracy)

centralized

more decisions made by upper-level management (bureaucracy)

tall organizations

more levels of hierarchy with fewer employees at each level

Elton Mayo's Management Theory

promotes the hypothesis that workers are motivated by social and relational forces more than financial or environmental conditions

commercialization

promotion(what do you communicate), pricing (skimming, penetration)

Dimensions of quality in services: responsiveness

promptness, the degree to which the service satisfies the need

Herzberg's Two-Factor Theory

proposed that work satisfaction and dissatisfaction arise from two different factors - work satisfaction from so-called motivating factors and work dissatisfaction from so-called hygiene factors

market structure for business to business markets

relatively few potential customers, larger purchases, geographically concentrated

fixed assets

relatively permanent assets; also known as property, plant, and equipment

statement of cash flows

reports inflows and outflows of cash during the accounting period in the categories of operating, investing, and financing - VERY IMPORTANT IN UNDERSTANDING THE ABILITY OF THE FIRM TO MANAGE ITS OWN TRANSACTIONS OVER THE PERIOD REPRESENTED

products for business to customer markets

requires less technical products, sometimes requires customization, sometimes requires technical advice, delivery, and after sales services, no special training

inputs

resources invested in accomplishing a task, usually things like time, money, and effort

assets

resources the firm owns

Supply chain strategy objective innovative products: respond _____ to _____ demand

respond quickly to unpredictable demand

operating revenue

revenue from activities directly related to firm's core business (sales)

non-operating revenue

revenue from other sources (sales of assets, rent received, financial/legal windfalls) - this is the top line

operating income (or earnings before interest and taxes-EBIT)

revenue-cost of goods sold-operating expenses

profit=

revenue-costs

facility location and layout

the way a facility is arranged in order to maximize processes that are not only efficient but effective towards the overall organizational goal. timeutility,place utility shipping examples: walmart, amazon

control costs

related to activities to remove defects from the production stream

outbound logistics

related to the storage and movement of the final product

Milton Friedman

"Thought that there was only one social responsibility of business--to use its resources and engage in activities designed to increase its profits so long it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud"

organizational structure

"the relatively enduring allocation of work roles and administrative mechanisms that creates a pattern of interrelated work activities" (Jackson and Morgan, 1978)

eron scandal

(Ken Lay) Changed the books to make their stock prices more favorable, everyone else is struggling and they look like they are killing it , Lay was convicted for what he "should have known", he hired young go getters and created a culture, pressured Aurther Andersen and started Sarbanes Oxley

quality pioneers: deming

- all about process, not people - up to 85% of the total cost of quality was a management problem, which he meant that once quality issues get to the worker level, workers have little control - continuous improvement - statistical control (use of statistical techniques to control a process/ production method)

quality cycle

- allows firms to establish and check against standards and make corrections 1. define quality attributes on the basis of customer needs 2. decide how to measure each attribute 3. set quality standards 4. establish appropriate tests for each standard 5. find and correct causes of poor quality 6. continue to make improvements

what are the order winners in

- automobiles - phones - laptops - food

when information technology alters the workplaces: workers must

- become initiators, able to act without management direction - become financially literate so that they can understand the business implications of what they do and changes they suggest - learn group interaction skills, including how to resolve disputes within their work group and how to work with other functions across the company - develop new math, technical, and analytical skills to use newly available information on their jobs

supply chain improvement--> structure--physical stuff (products, locations, technology)

- changing suppliers - forward and backward integration -process simplification - physical location configuration - product redesign - outsourcing and off-shoring

competitive advantage

- comes from delivering a unique value, with a wider gap between willingness to pay and cost -allow a company to produce goods or services better or more cheaply than its rivals

operations management

- defined as managing the production of goods and services - the focus is on production within an organization, for example, production within the four walls of a factory or within multiple factories in a company - operations management focuses on decisions for the internal production of the firm's products or services

two quality pioneers

- deming argued that management needs to change for quality to improve - also advocated the aggressive use of statistical quality control techniques - juran advocated the quality trilogy: planning, control, improvement

bullwhip effect operational causes

- dependent demand processing - lead time variability - lot-sizing/order synchronization - trade promotion and forward-buying - anticipation of shortages

dimensions of quality in manufacturing

- design - conformance - availability - reliability - maintainability - field service

when information technology alters the workplace, managers must:

- instill commitment in subordinates rather than rule by command and control - becomes coaches, training workers in necessary job skills, making sure they have resources to accomplish objectives, and explaining links between a job and what happens elsewhere in the company - give greater authority to workers over scheduling, priority setting, and even compensation - use new information technologies to measure workers' performance, possibly based on customer satisfaction or the accomplishment of specific objectives

Corporation Pros

- limited liability - ability to finance - separation of ownership from management

logistics

- marketing function that firms must perform to optimize the movement of materials into, within, and out of the firm - planning, implementing, and controlling the physical flow of materials

bullwhip effect behavioral causes

- misuse of safety stock policies - misperceptions of feedback and time delays - panic ordering reactions after unmet demand

order winners will order qualifiers can

- order winners gain customers - order qualifiers can lose them if not satisfied (order qualifier: is a characteristic of a product that is required in order for the product to even be considered by a consumer)

level 1 metrics included in SCOR:

- perfect order fulfillment - order fulfillment cycle time - upside supply chain flexibility - upside supply chain adaptability - downside supply chain adaptability - overall value at risks - total cost to serve - cash-to-cash cycle time - return on supply chain fixed assets - return working capital

Sarbanes-Oxley Act

- prohibits accounting firms from providing certain non-auditing work (such as consulting services) to companies they audit - strengthens the protection for whistle-blowers who report wrongful actions of company officers - requires company CEOs and CFOs to certify the accuracy of financial reports and imparts strict penalties for any violation of securities reporting (e.g. earnings misstatements) - prohibits corporate loans to directors and executives of the company - establishes the five member public company accounting oversight board (PCAOB) under the Securities and Exchange Commission (SEC) to oversee the account industry - stipulates that altering or destroying key audit documents will result in felony charges and significant criminal penalties

products in business to business markets

- require technical, complex products - frequently require customization - frequently require technical advice, delivery, and after-sale services - buyers are trained

price discrimination

- selling the same product at different prices to different buyers (first degree)

supply chain improvement--> systems/ infrastructure-- roles, responsibilities, technology

- teams - partnerships - setup time reduction - information systems - cross-docking - minimizing risk: multiple-source, planning

Malcolm Baldrige National Quality Award

- to raise awareness of quality management and recognize U.S. companies that have successfully implemented quality management - focuses on results - includes examinations of strategy and info systems

purchasing cycle

- user requirements - specifications - make or buy - bidding - supplier selection - relationship management

other management issues with IT security and stability (and perception thereof)

- viruses - hacking - corporate espionage and cyberterrorism - privacy - resistance to change

HR management and IT skill sets evolving

- what do you need your workers to do? - what do they come in knowing how to do? - training

14 principles of management

-division of work -authority and responsibility -discipline -unity of command -unity of direction -subordination of individual interest -remuneration -the degree of centralization -scalar chain -order -equity -stability of tenure of personnel -initiative -esprit de corps

expectancy theory

1) can I accomplish the task? 2) what is the reward? 3) is the reward worth the effort?

the six d's of decision making

1. Define the situation 2. Describe and collect needed information 3. Develop alternatives 4. Decide which alternative is best 5. Do what is indicated 6. Determine whether the decision was a good one and follow up

retail, store retailing

1. Department stores (macy's sears, belk) 2. Discount stores (retails where they sell merchandise at discounted prices) 3. Supermarket 4. Warehouse club (costco) 5.Convenience stores (wawa) "Category killers" (walmart, a wide selection of merchandise) Outlet stores (factory outlet stores like nike factory outlet) Speciality stores (florists, bookstores)

new product development steps

1. Idea generation 2. Idea screening 3. Concept development and testing 4. Marketing strategy development 5. Business analysis 6. Product development 7. Test marketing 8. Commercialization

LLC Advantages

1. Limited liability 2. Choice of taxation 3. Flexible ownership rules 4. Flexible distribution of profits and losses 5. Operating flexibility

LLC Disadvantages

1. No stock 2. Limited life span 3. Fewer incentives 4. Taxes 5. Paperwork

packaging rules of thumb

1. attract the buyer's attention 2. protect the goods inside, stand up under handling and storage, be tamperproof, and deter theft 3. be easy to open and use 4. describe and give information about the contents 5. explain the benefits of the good inside 6. provide information on warranties, warnings, and other consumer matters 7. give some indication of price, value, and uses

Fayol's Principles of Organization

1. Unity of command 2. Hierarchy of authority 3. Division of labor 4. Subordination of individual interests to the general interest 5. Authority 6. Degree of Centralization 7. Clear communication channels 8. Order 9. Equity 10.esprit de corps

deming's 14 principles

1. create constancy of purpose 2. adopt the new philosophy by eliminating lex attitude 3. cease dependence on mass inspection 4. end price-based procurement decisions 5. improve constantly 6. training 7. focus management and supervisors on leadership 8. drive out fear 9. break down barriers between departments 10. eliminate programs that try to improve output without improving methods 11. eliminate arbitrary quotas 12. remove barriers to pride in work 13. encourage lifelong education and self-improvement 14. get everyone involved

there are three aspects of operations and supply chain management that require elaboration

1. decisions: since manager make decisions it is natural to focus on decision making as a central theme in operations. 2. function: operations is a major function in any organization, along with marketing and finance. 3. process: operations managers plan and control the transformation process and its interfaces in organizations as well as across the supply chain. this process view is a powerful basis for. the design and analysis of operations in an organization and across the supply chain.

principles of jidoka

1. discover an abnormality 2. STOP 3. fix the immediate problem 4. Investigate and correct the root cause - "five whys"-- keep asking why until you get to the bottom - example: a laptop won't turn on

The big 5 framework/ personality traits

1. extraversion (excitement seeking) 2. conscientiousness (self-disciplined) 3. openness to experience (feelings) 4. agreeableness (trust) 5. neuroticism (anxiety)

elasticity of demand above or below -1

1. if the elasticity is below -1, far from zero, then the demand is considered to be elastic. This means that consumers are relatively sensitive to changes in price 2. if elasticity is above -1, close to zero, then the demand is considered to be inelastic. This means that consumers are relatively insensitive to changes in price

three ethical questions to ask yourself

1. is my proposed action legal? 2. is it balanced? 3. how will it make me feel about myself?

the four different dimensions of quality mean that

1. quality is more than just good product design, it extends to the quality control of production, quality over the life of the product, and quality of field service after the sale

technology and strategy

1. where do we compete 2. what unique value do we bring 3. what resources/capabilities do we utilize 4. how do we sustain unique value

what is strategy? the 4 questions:

1. where do we compete? 2. what unique value do we bring? 3. what resources/capabilities do we utilize? 4. how do we sustain unique value?

partnership

A business in which two or more persons combine their assets and skills

Sole Proprietorship

A business owned by one person

quality business

A business that tries to meet its customers' needs through continuous improvement.

performance ratios

A group of ratios that consider how well the firm is performing in terms of profitability and turnover. They include the return on capital employed (ROCE) and the gross and net profit margins.

Gross Output (GO)

A measure of total sales volume at all stages of production

invisible hand

A phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits for all

socialism

A system in which society, usually in the form of the government, owns and controls the means of production.

S corporation

A unique government creation that looks like a corporation but is taxed like sole proprietorships and partnerships

Entrepreneurship

Accepting the risk of starting and running a business.

place utility

Adding value to products by having them where people want them.

Stakeholders

All the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address.

liability

An amount owed by a business

capitalism

An economic system based on private ownership of capital

lean manufacturing

An operation that strives to achieve the highest possible productivity and total quality, cost effectively, by eliminating unnecessary steps in the production process and continually striving for improvement.

moral hazard

Arises when people behave recklessly because they know they will be saved if things go wrong

factors of pricing products

Competitors' prices Production costs Distribution High or low price strategies

operating expenses

Costs involved in operating a business, such as rent, utilities, and salaries.

supply chain quality

Dimensions of Product Quality Quality Experts Quality Tools

theory x

Employees inherently dislike work and need to be constantly monitored and evaluated to ensure that they do what is expected

nonprofit marketing tactics

Fundraising Public Relations Special Campaigns

GAAP (the system used in the U.S)

Generally Accepted Accounting Principles

trade protection

Government intervention in international trade through imposition of trade restrictions to prevent the free entry of imports into a country and protect the domestic economy from foreign competition.

fiscal policy

Government policy that attempts to manage the economy by controlling taxing and spending.

deficit spending

Government practice of spending more than it takes in from taxes

Changes associated with each strategy product differences: Average forced end of the year markdown

Imitative Products: 0% Innovative Products: 10% to 25%

Changes associated with each strategy product differences: average stockout rate

Imitative Products: 1% to 2% Innovative Products: 10% to 40%

Changes associated with each strategy product differences: Average forecast error when production is planned

Imitative Products: 10% Innovative Products: 40% to 100%

Changes associated with each strategy product differences: contribution margin

Imitative Products: 5% to 20% Innovative Products: 20% to 60%

oversight and centralized vs. decentralized organization structures

In centralized organizations, primary decisions are made by the person or persons at the top of the organization. Decentralized organizations delegate decision-making authority throughout the organization. Daily decision-making involves frequent and immediate decisions.

the bullwhip, or accelerator, effect entails market demand being magnified through orders placed to upstream supply chain entities, such that the farther upstream an entity is, the greater is the variability in the orders received and inventory held.

Information time lags, retail pricing practices, human behavior, and long replenishment lead time account for the dynamics observe

product imitator

Low-cost business strategy, which is typical of a mature, price-sensitive market with a standardized product

potential reasons to engage in CSR:

Lower costs and risk (e.g. from litigation), appeal to consumers, reputation

liquidity ratios

Measures of the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash.

example of elasticity of demand

Michael Scott Paper Company sells 1,000 reams of paper at $50 per ream, then change to $75 per ream and sells 750 reams 1. % change in quantity = (750-1000)/(1000)= -25% 2. % change in price (75-50)/(50)= 50% 3. Elasticity of paper demand at a price of $50= -25/50= -0.5

return on equity

Net Income / Average Stockholders' Equity

Basic Earnings Per Share (EPS)

Net Income / Basic Weighted Average Shares Outstanding

Bernie Madoff

Operated largest ponzi scheme in American history., famous for the Ponzi Scheme in which he took billions from his investors ; responsible for largest criminal conspiracy in history; Sentenced to a life sentence.

finance strategies strategy product innovator

Product Innovator: - higher risks -higher profit margins

standardized processes

Quality and consistency of a product or service can often be improved by standardizing work activities through job descriptions and procedures

competitive bidding or negotiation

RFP , etc.

Supply chain resilience is the capability to quickly respond to unexpected disruptions in the supply chain, either natural or man-made.

Resilience is achieved by advanced plan-ning, early detection, and swift actions

supply chain strategy suppliers innovative products: selected for ____, _______, and quality.

Selected for speed, flexibility, and quality

supply chain strategy inventory innovative products: Deploy significant _______ of parts or finished _____. May have ___ turnover.

Significant buffers of parts or finished goods. May have low turnover.

The Internet is creating new types of businesses that facilitate transactions between firms (B2B) or between a firm and its customers (B2C).

The Internet is also improving supply chain performance by speeding up and reducing costs in order placement and order fulfillment processes. E-commerce and blockchain digital technologies are trans-forming supply chains.

prosocial motivation

The degree to which people are energized to do their jobs because it helps other people

strategic fit

The different activities in the firm have to be consistent with the overall strategy of the firm Example - if you are focused on delivering the lowest cost, most efficient commercial flight service, should you offer gourmet meals to your passengers? - this need for fit extends throughout the entire supply chain, and all partners need to be on board

production process

The steps that bring resources together to make goods and services. - turns inputs into outputs

Economics

The study of how people seek to satisfy their needs and wants by making choices

national debt

The sum of government deficits over time.

depreciation

The systematic write-off of the cost of a tangible asset over its estimated useful life. - in essence, it allows the firm to spread the expense of a tangible asset over the lifetime of the assert - recorded on the income statement as an expense - lowers the amount of taxable income, thereby lowering taxes

Sustainability is meeting present needs without sacrificing the needs of future genera-tions.

The triple bottom line refers to environmental, social, and financial responsibility.

full service merchant wholesaler

They buy goods, divide, store and deliver them to shops. they also take care of the financial part of reselling, promote their products and collect market information. they bear ALL risks of indirect sales

the wealth of nations

This is the 18th century book written by Scottish economist Adam Smith in which he spells out the first modern account of free market economies.

rfp

a business document that announces a project, describes it, and solicits bids from qualified contractors to complete it.

Corporate Social Responsibility

a business's concern for society's welfare

frame of reference

a complex set of assumptions and attitudes which we use to filter perceptions to create meaning. the frame can include beliefs, schemas, preferences, values, culture, and other ways in which we bias our understanding and judgement

C Corporation

a corporation that is organized to sell stock to the general public

the make-or-buy decision

a decision concerning whether an item should be produced internally or purchased from an outside supplier

intrinsic motivation

a desire to perform a behavior effectively for its own sake

extrinsic motivation

a desire to perform a behavior to receive promised rewards or avoid threatened punishment

Oligopoly

a few sellers, each with market power

income statements

a financial statement that shows you the company's income and expenditures.

supplier certification

a good way to ensure that suppliers have a quality system in place to prevent defects from occuring

formal organization

a group designed for a special purpose and structured for maximum efficiency

Theory Z

a management philosophy that stresses employee participation in all aspects of company decision making

theory z

a management philosophy that stresses employee participation in all aspects of company decision making

Equity

a manager should treat employees and peers with respect and justice

brand manager

a manager who has direct responsibility for one brand or product line

monopolistic competition

a market structure in which many companies sell products that are similar but not identical

high/low pricing

a pricing strategy that relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases

corporation

a separate legal entity owned by shareholders and guided by a board of directors

six sigma

a set of techniques and tools for process improvement - 99.99996% of all opportunities to produce some feature of a part are statistically expected to be free of defects - reduces variability, long term defects levels below 3.4 defects per one million opportunities

conflict of interest

a situation in which a person is in a position to derive personal benefit from actions or decisions made in their official capacity

Moral Hazard

a situation where one party engages in risky behavior or fails to act in good faith because it knows the other party bears the economic consequences of their behavior - example: government decides to bail out large corporations

principal-agent challenge: asymmetric information

a situation with asymmetric information in one in which parties in an interaction have information relevant to the interaction that other parties do not example: car sales, job interviews

balance sheet

a snapshot fo the financial state of a firm at a specific time - must reflect the fundamental accounting equation

firms with needs to be met have to balance the cost of creating:

a solution themselves vs. hiring a third-party vendor to create one. this requires a comparison of the costs (including opportunity costs) associated with each option

Esprit de corps

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

matrix organization

a structure in which there is more than one line of reporting managers

line organization

a supervisor exercises direct supervision over a subordinate

administered distribution systems

a system in which producers manage all the marketing functions at the retail level example: kraft does that for its cheeses

cross-functional team

a team composed of employees from different functional areas of the organization

product development requires

a thorough approach with plenty of analysis and testing

the us economy has become a service economy

about 80% of the value of the economy comes from services

buying procedures for business to consumer markets

accept standard terms for most purchases, uses personal judgement, informal process involving household members, impersonal relationships between marketers and consumers, rarely buy from multiple sources

preparing financial statements

accountants review the journal entries over the relevant period of time to find and aggregate the needed information for a given financial statement - they then condense this information into a digestible form for the target audience

economic cost

accounting cost plus opportunity cost

Types of Costs

accounting costs, opportunity costs, economic costs

facility location and layout are both crucial to

achieving efficiency in the supply chain

integrity based practices

adhere to external and internal standards, focused on empowerment and decision making

compliance based practices

adhere to external standards, focused on punishment as deterrent

costs of quality include prevention costs and failure costs

all of which must be planned for and mitigated ( which means to reduce the risk of loss from the occurrence of any undesirable event)

net profit or income

all revenues minus all expenses (including taxes) - the bottom line

promotions

all techniques used by sellers to inform people about buying their products - examples: advertising, personal selling, public relations, word of mouth, sales promotion

Clear communication channels

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

organizing

allocating resources, assigning tasks, following up

The supply chain practices of outsourcing and off-shoring change a firm's supply chain configuration by

allocating work performed internally to other firms within the supply chain either domestically or in other countrie

licensing

allowing foreign firms to manufacture your products or use your trademark for a fee

brand

allows firms to create product awareness and establish a reputation

owner's equity

amount of business owned by owners, or the value of the firm's assets that is left over after subtracting what is owed elsewhere

constrained optimization

an analytical tool for making the best (optimal) choice, taking into account any possible limitations or restrictions on the choice

free market economy

an economic system in which decisions on the three key economic questions are based on voluntary exchange in markets

comparative advantage

an economy's ability to produce a particular good/service at a lower opportunity cost than its trading partners. This gives a company the ability to sell goods and services at a lower price than its competitors and have stronger sales margins

the evolution from web 1.0 to web 3.0 has seen end users take a more active role and AI become

an integral part of content creation and dissemination

order winner

an objective that will win orders from customers in the target market

quality can both improve revenues

and reduct costs - the cost of quality measures the lack of conformance to customer requirements - quality costs can be divided into control costs and failure costs - control costs are due to prevention or appraisal - failure costs may be due to internal or external failures

planning function of management

anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives, where one of these objectives is to please customers - accomplishing other functions depends heavily on having a good plan

Subordination of individual interests

any individual's interest must be subordinated to the interests of the organization.

line-and-staff organization

approach where authorities establish goals and directives that are then fulfilled by staff and other workers

venture capitalists

aprivateequityinvestorthatprovidescaptialtocompanieswithhighgrowthpotentialinexchangeforanequitystake

leverage ratio

assesses the ability of a company to meet its financial obligations

the fundamental accounting equation

assets= liabilities +owner's equity

supply chain intermediaries

assist in moving goods and services from producers to consumers - often act as buyers and sellers -corporate vs. contractual vs. administrative distribution systems - moral hazard

Sole Proprietorship pros

autonomy, convenience, financial benefits

comparative advantage example

bake sale: david bakes 6 cakes or 3 pies in half a day while lawrence bakes 4 cakes or 3 pies in 1/2 a day. david's opportunity cost of making 1 pie is 2 cakes while lawrence's is 4/3 of a cake. David should specialize in cake while Lawrence in pie

Degree of Centralization

balancing centralized decision making from the top with letting employees make decisions

supply chain dynamics

baseball example, managing different parts of the supply chain retail: how would customers respond to a stockout? how would you respond to a wholesaler's stockout? wholesaler: how would retailers respond to a stockout? How would you respond to a manufacturer's stockout? manufacturer: same two questions yarn supplier: same two questions

the business cycle

boom, recession, depression, recovery

behavioral issues, a lack of information sharing, and operational inefficiencies (e.g. long lead times) lead to the

bullwhip effect, where fluctuations in inventories grow as you look further up the supply chain

fixed costs (part of the target cost)

business costs, such as rent, that are constant whatever the quantity of goods or services produced

foreign direct investment

buying permanent property and setting up branches or subsidiaries in foreign countries

scientific management

by taylor, theory of management analyzing workflow in order to improve labor productivity and economic efficiency

supply chain improvement

can be done at the structural or the systems level

supply chain performance

can be measured in terms of delivery speed, defect rate, flexibility in the face of change, and time between production and payment

current assets

cash and assets easily converted into cash, including accounts receivable (money owed to the firm) and inventory (goods that will be ready to be sold within the year)

variable costs (under target costing)

changed based on how much you produce or sell

third degree price discrimination

charging different prices based on observable characteristics, e. g. differently priced movie tickets based on age group

supplier selection

choose the supplier and nail down the contract

product mix

combination of product lines

What determines the prices that you see? *check textbook

competition, firm costs/profit targets, negotiation, value-- "total product offer"

international expansion strategies

comprises market entry strategy including crucial choices in regard to primary markets of focus, determination of target customer and channel strategy, resource allocation, product and service value offerings, brand positioning

testing

concept testing, beta testing--> users

operations

concerned with managing the process that converts inputs (in the forms of raw materials, labor, and energy) into outputs (in the form of goods and/or services)

business to business (B2B)

consists of all the individuals and organizations that goods and services use in producing other goods and services or to sell, rent, or supply foods to others. Examples of B2B include oil-dirlling, cash registers, public accounting

business to consumer or (B2C)

consists of all the individuals or households that want goods or services for personal consumption or to use and have the resources buy them

maturity (step 3)

constant sales, reducing costs, increasing profits - differentiates product to satisfy different market segments - stable competition that later declines

web 2.0

content supplied by site affiliates and/or many end users (Youtube, Wikipedia)

Web 3.0

content supplied by site affiliates and/or many end users, tailored by Al to match consumer's tastes

competitive advantage comes from

delivering a unique value, with a wider gap between willingness to pay and cost

advantages of centralized

control, advancement

risk

conventional wisdom and academic theory say that people who are more tolerant of risk are more likely to become entrepreneurs

what determines supply?

cost production, technology,(automobiles before vs after Henry Ford) alternative product prices, number of firms in the market

Corporation Cons

cost, double taxation, principal-agent problems

operations mission and objectives

cost, quality, delivery, flexibility

external failure costs

costs incurred due to product failures after they have been sold to customers - warranty - returned merchandise - complaints - allowances

prevention costs

costs incurred to prevent equality problems - quality planning - new product review - training - process planning - quality data - improvement projects

internal failure costs

costs of quality associated with product failures that are discovered before a product leaves the factory - scrap - rework - downgrading - retest - downtime

franchise cons

costs, shared profit, less autonomy, potential negative spillovers

leading function of management

creating a vision for the organization and communicating, guiding, training, coaching, and motivating others to achieve goals and objectives in a timely manner

development

creating prototypes

Systems improvements in supply chains can be accomplished by

cross-functional teams, partnerships, lean systems, and information systems.

challenges of adapting internationally

cultural, legal and political, financial, environmental, technological

example: a firm buys a new $40,000 delivery truck using $10,000 cash and $30,000 loans

current assets (cash) goes down by $10,000, fixed assets go up by $40,000, and notes payable goes up by $30,000

current ratio

current assets - current liabilities

Price to Earnings Ratio (P/E)

current stock price (per share) / earnings per share (annual)

supply chain management

deals with managing the flow of materials, information, and money across multiple organizations from the suppliers to operations to distribution to the final customer, along with reverse flows - the entire supply chain is included from the raw materials through suppliers, factories, warehouses, and retailers to the ultimate customers

operations and supply chain management

deals with the sourcing, production and distribution of the product or service along with managing the relationships with supply chain partners

helping buyers buy products

decreases the cost of search and decision by increasing access to information and reducing the time spent transacting

helping sellers sell

decreases the cost of search and decisions by increasing the access to information and reducing the time spent negotiating

measurement of supply chain performance should be made in four areas

delivery, quality, flexibility, and cost for each firm along with throughput time, cash to cash, and total delivered cost for the entire supply chain

measuring supply chain performance

delivery, quality, flexibility, time, cost

Dimensions of quality in services: dependability

dependable, accurate service without errors

organizing function of management

designing the structure of organization and creating conditions and systems in which everyone and everything work together to achieve the organization's goals and objectives

mind map

diagram that lays out ideas for a topic and how they are connected to one another

idiosyncratic

different for different people, as for example, someone would rather spend their evening eating at home while others prefer eating at the fanciest restaurants

cultural challenges of adapting internationally

different values, communication styles, HR policies and roles

agents and brokers

do not own the goods they handle, rather their entire function is to link buyers and sellers - represent buy side or sell side - earns commission for facilitating and negotiating deals

make or buy decisions

do we make it ourselves or buy it from someone else

non store retailing

e-retailing, micro-locations like carts or kiosks, direct selling

prevention vs cure in operations management

easier to and better to stop a problem from happening than to stop or correct it after it has started

What does elastic demand and inelastic demand imply about the firm's pricing strategy?

elastic demand--> increases revenue (though maybe not profit) with price decreases Inelastic demand--> increases revenue (though maybe not profit) with price increase

both kaizen and jidoka

emphasize continuous improvement and prompt error recognition and correction

advantages of decentralized

empowerment, more responsive

wholesalers and retailer are sales intermediaries that

enhance the ability of buyers and sellers to connect and to carry on business

controlling function of management

establishes clear standards to determine whether an organization is progressing towards its goals and objectives, rewarding people for a good job, and taking corrective action if not

product analysis

estimating costs and project sales

compliance-based ethics codes

ethical standards that emphasize preventing unlawful behavior by increasing control and by penalizing wrongdoers

EDLP

every day low pricing

for the fundamental accounting equation

every transaction that the firm engages in has to be recorded; this equation must stay balanced

Supply chain strategy manufacturing innovative products: Excess buffer ________ and short __________ time. May have ___ utilization of capacity

excess buffer capacity and short throughput time. may have low utilization of capacity

financial challenges of adapting internationally

exchange rates, sources of financing, protections

common goal

execute the strategy so everyone benefits

secondary data

existing information that was previously gathered for a purpose other than the study at hand

limited partnerships

exists when two or more partners go into business together, but the limited partners are only liable up to the amount of their investment

Dimensions of quality in services: tangibles

facilities and personnel

appraisal costs

fees a company pays to detect defects in its products ahead of delivering them to customers; form of quality control - incoming materials inspection - process inspection - final goods inspection - quality laboratories

flat organizations

fewer levels of hierarchy with more employees at each level

quality of field service after the sale

field service plays a role in efficiently allocating resources and improving overall productivity

customer orientation

finding out what customers want then providing

how to get capital

firms must at some time borrow (debt) or sell (equity)

bullwhip effect

fluctuations in demand at the retail level causes larger fluctuations in demand at the wholesaler, etc. bigger levels of the supply chain

profit orientation

focusing on the goods and services that will earn most profit

price discrimination second degree

for different quantities/ quality levels of a good, charging different prices that aren't just due to differences in cost e.g. different sized packages at the grocery store

depreciation can be misused in financial reporting

for intangible assets (amortization) and natural resources (depletion)

unemployment-rate

frictional (new) , structural (business, firm), cyclical (yearly cycle), seasonal (holidays)

possible funding sources for entrepreneurs

friends and family (most common), angel investors, venture capitalists, and crowdfunding

Liabilities

money the firm owes - notes payable: loans from banks - accounts payable: money owed to suppliers - bonds payable: long-term loans

there is a cycle of product or service quality--

from understanding customer needs through quality of design, production, and use by the customer. this cycle is controlled by specifying quality attributes, determining how to measure each attribute, setting quality standards, establishing a testing program, and finding and correcting causes of poor quality. continuous improvement of the system through prevention of defects is the preferred approach

types of merchant wholesalers

full service and limited service

demographic segmentation: market segmentation

gender, age, race, occupation, income

inflation

general rise of price of goods and services

types of segmentation

geographic (region, city, density), demographic (gender, age, education, income), psychographic segmentation (personality, values, lifestyle), benefit segmentation (comfort, convenience, durability), volume segmentation (usage, loyalty status)

supply chain strategy inventory imitative products: ____ turnover

high turnover

Supply chain strategy manufacturing imitative products: _____ utilization and _____- ____ production

high utilization and low-cost production

big data and analytics provide powerful tools for answering complex but

highly valuable questions, but they must be used wisely

quality pioneers: juran

his work in quality management led to the development of the widely practiced business methodologies referred to as Six Sigma and lean manufacturing - quality trilogy--> planning, control, improvement - new products are carefully tested before introduction - prioritize problems - statistical control

Dimensions of quality in manufacturing: field service

how easy is it to get help? how competent is help?

Dimensions of quality in manufacturing: maintainability

how easy is the product to repair or restore to like-- new? (related to MTTR)

Dimensions of quality in manufacturing: reliability

how long will the product last until it needs to be replaced? (related to MTBF)

Dimensions of quality in services: empathy

how much concern the business shows its customers

Dimensions of quality in services: assurance

how much employees inspire trust and confidence

brand awareness

how quickly you think of a brand when you think of a given product or service

Dimensions of quality in manufacturing: quality of design

how well do the product features meet the needs of the target market? what considerations are present here?

Dimensions of quality in manufacturing: quality of conformance

how well does the product match what the firm promises or the customer expects when purchasing it?

Dimensions of quality in manufacturing: availability

how well or often does the product work when i need to use it? - uptime divided by Uptime + Downtime - mean time between failures (MTBF) divided by mean time between failures + mean time to repair (MTTR)

value provided by intermediaries

if we got rid of intermediaries, people think, we could greatly reduce the cost of everything we buy? but is it that simple? for example, a box of cereal sells for $4 only available in Michigan. would the buyers all have to drive down to michigan to buy cereal? it doesn't make sense, as its much more cheaper and effective for intermediaries to bring the cereal to major cities though there might be costs of transportation and etc. But this adds value, the value of not having to drive down to michigan.

why is there a product life cycle

illustrates how the phases that products pass through and can be used to identify how and how much to invest in a product - profit starts to fall before sales reach their peak due to increase of price competition. when profits and sales start to decline, its time to come out with a new product

two common strategies, imitation and innovation, generate a very different set of emphases and objectives

imitation: low cost and process optimization innovation: better features and flexible processes

Changes associated with each strategy product differences: product (version) life cycle

imitative products: - greater than 2 years Innovative Products: - 3 months to 1 year

financial ratios

important tools for understanding the health of a firm and its ability to conduct business and discharge its obligations - need to be compared across firms (usually within an industry)

immersive internet

includes virtual worlds, augmented reality, and 3-D environments

what are the benefits of specialization

increases the productivity of and provide and advantage for a firm, eliminating costs

growth (step 2)

increasing sales, reducing costs ,some profits - improves products, keep product mix limited - growing competition

failure costs

incurred during the production process (scrap or rework) or after the product is shipped (returns) - incurred by an manufacturer when it produces defective goods

angel investors

individuals who invest in start-up companies with high growth potential in exchange for a share of ownership

microeconomics

the study of markets and individuals and organizations acting within markets

primary data

information collected through original research (whether it is through yourself or hiring someone),usually involves going directly to a source which would be customers or prospective customers in your target market, to ask questions and gather information

technological challenges of adapting internationally

infrastructure, innovation, sophistication of people

bank operations inputs and outputs

inputs: - tellers -staff - computer equipment Outputs: financial services (loans, deposits)

restaurant operations inputs and outputs

inputs: - cooks - waiters - food outputs: - meals - entertainment -satisfied customers

services

intangible

IFRS (what much of the rest of the world sees, worldwide system)

international financial reporting standards

free trade

international trade free of government interference

iso 9000

internationally accepted standards for quality management - procedures, policies, and training - quality manual and careful record-keeping, including process flowcharts, operator instructions, testing methods - customer satisfaction emphasis - continuous improvement processes

net neutrality would prohibit

internet providers from downloading content from different sources differently

Product (service) life cycle

introduction, growth, maturity, decline

quality control of production

is a system of inspection, analysis, and action applied to a manufacturing process by inspecting a small portion fo the product currently produced, an analysis of its quality can be made to determine what action is required on the operation in order to achieve and maintain the desired level of output

SCOR

is a system to help firms analyze the different components of their supply chains, characterize their strategies and activities, and identify opportunities for improvement

why is cloud computing important?

it allows organizations to scale, maintain flexibility, and focus their efforts on business operations - not managing complex IT infrastructure. One of the best ways to optimize cloud computing for your business is by working with a cloud partner.

SBA.gov

is a useful resource for starting a business

supply chain management

is concerned with the design and management of value-added processes that not only cut across organizational boundaries but must be tightly integrated to allow information and materials to flow and be deployed within and across them

supply chain resiliency

is crucial to staying afloat or even thriving during disasters--> planning, reacting, reevaluating and redesigning

strategic planning

is done by top management and determines the major goals of the organization and the policies, procedures, strategies, and resources in the need to achieve them

Unity of command

is the principle that subordinate members of a structure should all be responsible to a single commander.

Five Factors of Production

land, labor, capital, entrepreneurship, knowledge

legal and political challenges of adapting internationally

laws, IP, stability, political philosophy

incentives and motivation pushing in the same direction

leads to crowing out

incentives and motivation conflict

leads to shirking

customer relationship amangement

learning as much as you can about customers and doing what you can to satisfy or exceed their expectation

exporting

leaving operations in your own country but shipping your goods or services outside

interest rates: higher rates

less borrowing by businesses and more savings by individuals

disadvantages of centralized

less empowerment, slow to act

partnership cons

liability, disagreements, difficulty of extraction

franchising

licensing + some investment and training

LLC

limited liability company

protectionism

limiting the free market to protect domestic business through restriction of imports, such as tariffs, quotas, or embargos

intangible assets

long term assets with no physical form, such as patents and goodwill (assets that are worth something because they are perceived as being worth such as something, e.g. because of the reputation like brand names for example)

Disadvantages of Decentralization

loss of control, fewer chances for advancement

introduction (step 1)

low sales, high costs, no profits - offers market tested product, keep mix small - few competition

optimize system

making sure everyone in an organization is committed to customer satisfaction, integration of functional activities

Authority

managers must possess the authority to give orders and recognize that with authority comes responsibility

reverse logistics

managing the inflow of return products or packaging

outbound logistics

managing the outflow of finished product (from the firm's perspective) to customers

who are you marketing to? *check the textbook

manufacturers --> wholesalers --> retailers --> consumers

market structure for business to consumer markets

many potential customers, smaller purchases, geographically dispersed

direct selling

marketing products to ultimate consumers through face-to-face sales presentations at home or in the workplace

franchise pros

marketing, ownership, management assistance, financial assistance

Order

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

the supply chain consists of the physical flow of

materials, money, and information along the entire chain of suppliers, production, and distribution, and the reverse supply chain of recycled and returned products and information. the supply chain connects many different organizations

mayo and motivation theory

mayo believed that both social relationships and job content affect job performance

quality over the life of the product

means how well a product satisfied customer needs, to be of good quality, a product should be reliable and perform all its functions smoothly

pull marketing

means to market to the end customer - induces the consumer to find out about/ask for the product (focus on consumer needs) - examples include product placement, viral marketing, word-of-mouth

elasticity of demand

measures the sensitivity of the quantity demanded of a good or service to changes in the price of the service - % change in quantity/ % change in price - can be specific to the current price - usually varies by the market segment (IOW, can help segment the market)

firms identify needs and determine how to:

meet those needs through the purchasing cycle, including preparation of a clear set of specifications and working with potential suppliers to understand how those specifications can be satisfied and how much it will cost

contractual distribution system

members are bound to cooperate through contractual agreements 3 forms: 1. franchise systems 2. wholesaler-sponsored chains like Ace Hardware 3. Retail cooperatives such as associated grocers

Limited-Function Merchant Wholesaler

merchant wholesaler that provides a limited range of services 1. rack jobbers-- own until retail sells 2. cash and carry-- store for stores 3. drop shippers-- makes sales, don't handle

operations strategy consists of

mission, objectives, strategic decisions, and distinctive competence. these 4 elements must be tightly integrated with one another and with other functions

revenue

monetary value of a firm's receipts

Cost of goods sold (COGS)

monetary value of what is sold (cost of raw materials, production labor, freight, storage) - goods come out of inventory and not counted as expense until sold (inventory is recorded in the balance sheet in the assets section)

capital

money for investment

buying procedures for business to business markets

negotiates details of most purchases, follows objective standards, formal process involving specific employees, closer relationships between marketers and buyers, often buys from multiple sources

return on assets

net income/average total assets

implications for entrepreneurship

new and improved products, services, or technology form entrepreneurs enable new markets to be developed and new wealth to be created

product innovator

new product introduction (product leadership) emerging/growing market

Generic goods

nonbranded items, such as supermarket items like bread or icecream

macroeconomics

the study of the economy as a whole

entrepreneurs are less loss-averse but

not less risk averse

manufacturer's brand

not marketed to consumers by the manufacturer; instead, a distributor or retailer owns the brand name example: Kenmore, Craftsman

order qualifier

objectives that if met will not lead to customers won, but that if not met will lead to customers lost

economies of scale

occur when production increases leads to lower costs per unit of output example: -50,000$ for the building, $15k for an assembly machine -8 workers at $20 per figure produced with a capacity of 1,000 units - now we add one more machine and 8 more workers new capacity: 2000 units--> new cost would be $120k--> new average cost of $60 per unit

nonprofit organization

often make money, but they take that money and use it to advance a cause or to improve their business

corporate distribution system

one firm owns all the organizations in the channel of distribution. if the manufacturer owns the retail firm, it can maintain a great control over its operations. paint giant Sherwin Williams engages in all steps of process

price leadership

one or more dominant firms dictate how everyone in the industry prices

monopoly

one seller with total control over price and quantity

relationship management

ongoing interaction/ customization/ input

operations and its associated supply chain produces and delivers goods or services deemed to be of value to customers in a global economy.

operations and supply chain management is responsible for productivity, innovation, and GDP growth in aggregate. without operations and supply chain management a firm, industry, and country cannot prosper.

operations strategic decisions indicate how

operations objectives will be achieved. strategic decisions can be developed for each of the major decision areas ( process, quality systems, capacity, inventory, and supply chain)

three major activity areas for statement of cash flows

operations: the focal business activities of the firm investments: plant, property, and equipment financing: debt and equity

merchant wholesalers

own the goods they handle - buy from producers -sell to customers at a markup

distribution channel

part of the supply chain between manufacturer and consumer

alliances and joint ventures

partnering with a foreign company on a major project, sharing input, and control and investment

limited liability partnerships

partners not liable for (mis)behavior of other partners, with some exceptions

general partnership

partnership in which partners share equally in both responsibility and liability (unlimited)

contract manufacturing

pay a foreign manufacturer to build a version of your product which then has your brand put on it

shared language refers to

people developing understanding amongst themselves based on language to help them communicate more effectively. Shared language is critical to collaboration, and collaboration is critical to business and education

cost based pricing

per unit of product + markup

equity theory

perceptions of fairness matter, can work against rewards

psychographic segmentation -- market segmentation

personality, values, lifestyles

Maslow Hierarchy

physiological, safety, love/belonging, esteem, self-actualization

productivity equation

productivity is output divided by inputs, all in constant dollars productivity= output / (capital + labor)

four functions of management

planning, leading, organizing, controlling

Four Functions of Management

planning, organizing, leading, controlling

scor or supply chain operations reference

plans: processes that balance aggregate demand and supply to develop a course of action which best meets sourcing, production, and delivery requirements source: processes that procure goods and services to meet planned or actual demand make: processes that transform product to a finished state to meet planned or actual demand deliver: processes that provide finished goods and services to meet planned or actual demand, typically including order management, transportation management, and distribution management return: processes associated with returning or receiving returned products for any reason. These processes extend into post-delivery customer support enable: processes that support the other 5 steps

partnership pros

pooled resources and skills, lighter workload, financial benefits

the distinctive competence of operations should support the mission and differentiate operations from its competitors

possible distinctive competencies include proprietary technology, embedded organization culture, and any innovation in operations that can not be copied easily

psychological pricing

practice of using the power of psychology to push customers to spend. its a joint effort of pricing, marketing, and sales to build an attractive offer for the customer example: prestige pricing, BOGOF

Supply chain strategy objective imitative products: _______ supply at ____costs

predictable supply at low costs

what determines demand

preferences, prices, availability of related goods, income, by the number of consumers in the market

the role of the law in the market

prevent fraud and protect the honest

5 P's of Ethical framework

problem, possibilities, people, principles, priority

there are 5 key groups of decisions in operations and supply chain management

process, quality, capacity, inventory, and supply chain. these decisions need to utilize analytics when appropriate and account for contingencies, or special situations, because a best practice may not be best in all circumstances

marketing strategies strategy product imitator

product imitator: - mass distribution - repeat sales maximizing of sales opportunities

market conditions strategy product imitator

product imitator: - price-sensitive - mature market high volume

Market conditions product innovator

product innovator: - product-features-sensitive - emerging market - low volume

market strategies product innovator

product innovator: - selective distribution - new market development - product design

the four p's used by companies to identify key factors for the business

product, price, place, promotion

finance strategies strategy product imitator

productor imitator: - low risk - low profit margins

middlemen

provide place and time value, adds cost and value

what information can be gathered from the balance sheet

provides detailed information about a company's assets, liabilities, and shareholders' equity

control process/ function

provides feedback that lets managers and works adjust to deviations from plans and to changes in the environment that have affected performance

accounting ratios

quick calculations that provide information about a firm's financial health

crowdfunding

raising money for a project or venture by obtaining many small amounts of money from many people

supply chain steps

raw materials--> supplier --> manufacturer--> distributor--> retailer--> consumer

horizontal differentation

real or perceived differences in features of a product or service that are not broadly acknowledged as related to the true quality of the product, boils down to the customer's preferences example: pepsi vs coke

vertical differentation

real or perceived differences in quality (broadly acknowledged) - this can be price or quality

customer relationship management

recent growth in customer loyalty emphasis for example, card and programs made by companies and brands

decline (step 4)

reducing sales, constant costs, reducing profits - cut product mix, develop new product ideas - declining number competition

principal agent model

refers to the relationship between the principal and the agent to manage an asset on the owner's behalf

process

refers to what is done in order to accomplish a task

market segmentation (geographic segmenetation)

region, city, density

risk aversion vs loss aversion

related but not identical

product lines

related products intended for a similar market

accounting rules

rules have to be put in place to guide firms in identifying , classifying, and presenting information. the rules have to be consistent across firms and industries for accurate frames of reference

net sales

sales revenue-the deduction of returns, allowances for damaged or missing goods and any discounts allowed

social orientation

satisfying consumers with consideration for society as a whole

supply chain strategy suppliers imitative products: selected for ____ and quality

selected for cost and quality

market penetration

set a low price upon entry to build a reputation/clientele

skimming (another price strategy)

setting a high price upon entry - is most effective though when the product follows an inelastic demand curve, meaning the quantity demanded doesn't rise or fall - only works with inelastic demand curves

planning

setting goals and standards and figuring out how to reach them

benefits of depreciation

smooth expenses for more consistent income statements, lowers the amount of taxable income, thereby lowering taxes

made to order vs make to stock

specially made according to a customer's specifications vs a conventional production technique wherein producers produce commodities on a large scale in accordance with anticipated consumer demand

SWOT analysis

strengths, weaknesses, opportunities, threats

swot analysis

strengths, weaknesses, opportunities, threats

preferences can be based on many combinations of many different sources of utility (Check on textbook?)

such as fun, health, comfort, and ego

in many situations the basis of competition is not the firm but the entire supply chain

supply chain strategy is an extension of operations strategy that considers not only the firm but also the strategies and capabilities of its supply chain partners

target costing

take price as given by demand and decide on your need profit margin, figure out how cost efficiently you have to produce the product to hit that profit margin

goods

tangible

five dimensions define service quality

tangibles, dependability, responsiveness, assurance, and empathy. these measures can be obtained by surveying customers

materials handling

the storage and movement of inputs, work-in-progress inventory, and finished products within the firm

risk aversion

tendency of an economic agent to strictly prefer certainty to uncertainty

invisible hand

term economists use to describe the self-regulating nature of the marketplace

transformation system

that converts inputs into outputs. inputs to the system include energy, materials, labor, and information. process technology is then used to convert inputs into outputs.

remember that the buyer's reason for buying something and or the end us of the product is the thing

that determines whether a product is a C2B or B2B for example, if students buy yogurt for breakfast, it is a consumer product but if a company like Harvest Gold purchases the same yogurt and sells it to breakfast consumers, it would be a b2b product

jidoka

the emphasis on stopping the process when an error is discovered - is important because it ensures products are made with high levels of quality because defects are automatically detected throughout the process

kaizen

the Japanese system of total process improvement - it aims for improvements in productivity, effectiveness but people who practice this have other benefits such as less waste and employees become better/ experts at what they do - continuous improvement

comparative advantage

the ability to produce a good at a lower opportunity cost than another producer

absolute advantage

the ability to produce a good using fewer inputs than another producer

output

the accomplishment itself

marketing

the activities buyers and sellers perform to facilitate mutually satisfying exchanges

the agent

the agent has to put forth effort to use the resource to produce the good or service; he suffers a cost of effort (economic cost) that depends on how much effort he chooses to put forth

Scientific Management/taylorism

the application of scientific principles to increase efficiency in the workplace, advocated by Fredrick W Taylor

Division of labor

the assignment of different parts of a manufacturing process to different people to improve efficiency.

theory x

the assumption that employees dislike work, are lazy, dislike responsibility, and must be coerced to perform

utility

the benefit that individuals receive from consuming goods, services, or experiences

opportunity cost

the benefit that must be given up to use a resource in one activity as opposed to its most beneficial alternatives

the operations missions should be aligned with

the business strategy - possible missions for operations include low costs, fast new product introduction, fast delivery, or best quality

procurement

the buying and reselling of goods that have already been produced

risk (in finance)

the chance that an investment's actual return will be different than expected

abuse of power

the commission of an unlawful act, done in an official capacity, which affects the performance of official duties

switching costs

the costs that a consumer incurs when changing from patronizing one company to patronizing another

product differentiation

the creation of real or perceived product differences - allows firms to lower the intensity of competition and to target different market segements

product

the designing of a want-satisfying product, what are you going to sell? what are its attributes? what options will be available?

demand

the desire to own something and the ability to pay for it

value

the difference between the cost to produce a good and the amount the customer is willing to pay for it -adding value requires either increasing willingness to pay or decreasing costs

supply chain decision framework

the different activities in the firm have to be consistent with its overall strategy - as do the activities within the other firms in the supply chain

time utility

the increase in customer satisfaction gained by making a good or service available at the appropriate time

unlimited liability

the individual is responsible for all losses or debts

the future of marketing is

the internet, which is increasing the amount of insight companies are gaining into their customers' lives - understand behavior and preferences - gather data - engage in personalized marketing

the logistics function

the management of the movement and storage of materials and goods across organizations in a supply chain - choice of materials - packaging and materials handling - location and management of storage points

logistics

the management of the movement and storage of materials and goods across organizations in a supply chain; this includes decisions about what materials and packaging are used and storage locations

inbound logistics

the managing of inflow of raw materials and other inputs from suppliers to the firm

Willingness to pay

the maximum amount that a buyer will pay for a good

willingness to pay

the maximum amount that a buyer will pay for a good

there is no one best strategy for all operations and their supply chains

the mission, objectives, strategic decisions, and distinctive competence depend on whether a product imitator, product innovator, or another strategy is being pursued by the business

accounting cost

the monetary value of resources used

breakeven point (under target costing)

the number of units you have to sell your revenues to match your costs exactly (so that profit equals zero)

preferences

the ordering of relationships between different combinations of goods, services, or experiences (bundling) that demonstrates which given an individual more utility

distribution channels

the path through which products or services get to customers

Hierarchy of authority

the power structure and authority that increases at higher levels in the hierarchy

cloud computing

the practice of using a network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer

Equilibrium

the price at which the quantity demanded equals the quantity supplied

the principal

the principal hires another person to do the work necessary to produce the good or service using the resource

net neutrality

the principle that all Internet traffic should be treated equally by Internet Service Providers.

tactical planning

the process of developing detailed, short-term statements about what is to be done, who is to do it, and how it is to be done

market segmentation

the process of dividing the total market into groups whose members have similar characteristics

informal organization

the social system that develops spontaneously through the interactions between individuals in the organization - can help or hinder managerial efforts

environmental scanning

the process of identifying the factors that can affect marketing success

contingency planning

the process of preparing alternative courses of action the firm can use if its primary plans do not work out

operational planning

the process of setting work standards and schedules necessary to implement the company's tactical objectives

double-entry bookeeping

the process to ensure that every transaction is recorded in a way that balances this equation , aka the fundamental accounting equation

supply

the relationship between the amount of product sellers will produce and the price for which it is sold

franchises

the right to operate a business or to sell a product

wholesale

the sales of goods and services to businesses, either for use in the business or for resale to consumers

supply chain

the sequence of linked activities that must be performed by various organizations to move goods from the sources of raw materials to ultimate consumers

the value chain

the series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm's products

supply chain

the set of entities and relationships that cumulatively define the way materials and information flow downstream and upstream from the customer. the downstream flow facilitates transformation of materials and services into units of the final product sold to customer and information related to the product. the upstream flow facilitates return of defective units, recyclables, and information for planning purposes

limited liability

there is a cap on the amount of loss or debt the individual is responsible for

why is deming's 14 points important

they are a guide to the importance of building customer awareness, reducing variation, and fostering constant continuous change and improvement throughout organizations

conglomerate merger

two firms in unrelated industries with the purpose to reduce risk, spread costs, and scope advantages

the goal of the marketing mix

to please customers and make a profit

goal of process design

to produce as efficiently as possible, meaning to use as few resources as possible for a given target level of output

promotion

to promote the produce, how will you let your target market know about it? what wrinkles or gimmicks will you rely on to stimulate the demand?

the purpose of accounting

to provide accurate and essential information to the intended audience

financial account purpose

to provide investors, potential investors, and other interested parties with the financial information they need to understand how the firm is performing - profit and loss - debt and equity - cash flows

managerial accounting purpose

to provide managers with the financial information they need to oversee the firm and to make decisions - understand where money is being spent - inventory management - monitor payments to suppliers and revenue from customers

price

to set a price for the product how much will you charge? how will you charge for customizations/add-ons?

the operations and supply chain strategy must be linked

to the business strategy and other functional strategies, leading to a consistent pattern of decisions, unique capability, and competitive advantage for the firm

levels of management

top managers, middle managers, first-line managers

debt to owner's equity ratio

total liabilities/owner's equity

gdp

total value of final goods and services produced by economy in a year

first line managers

train and monitor employees - al.so called supervisory management, section leaders, supervisors

middle management

turns vision into action - plant managements, division heads, branch managers

vertical merger

two firms in different levels of the supply chain with a purpose to reduce costs

horizontal merger

two firms in the same industry and level of the supply chain with a purpose to reduce competition

benefits of intermediaries

types of utility: form-- change form of goods to produce new goods time-- makes products available when needed place-- makes products available in convenient locations possession-- facilitates transfer of ownership or other ownership functions information-- facilitates exchange of information between buyers and sellers service-- auxiliary functions to purchase (training, education)

consumer behavior

understanding how they make decisions - problem recognition and information search -learning reference group -culture and subculture -cognitive dissonance

consumer behavior * review by textbook

understanding how they make decisions - problem recognition and information search -learning reference group -culture and subculture -cognitive dissonance

Sole Proprietorship cons

unlimited liability, workload, financing challenges

volume segmentation--> market segmentation

usage, loyalty status

robotics in business

used in many aspects to help increase productivity and efficiency while lowering production costs

theory y

usefulness of empowerment and employee ownership in stimulating performance management by objectives: goal-setting, cycle of discussion, review, and evaluation

benchmarking

using comparable firms (i.e. competitors) to set your standard - helps organizations overcome complacency - they continuously strive to improve their performance standards in order to stay relevant in the market

why do people buy what they do?

utility

brandy equity

value of the brand name and associated symbols

Structural improvements in supply chains can be achieved by

vertical integration; major process simplification; changing warehouse, factory, and retail configurations; and major product redesign.

relationship of macro and micro

walking is a great way to understand the relationship: micro-- personal motivations, identity, the body and our interactions with people around us macro-- issues that influence whether and where people walk how walkable is your neighborhood? do your local streets have sidewalks?

big data and analytics

we can track and store anything now-- memory is cheap, tools are sophisticated, everything is done digitally - all these data have to be sifted through, but can provide excellent ground for unlocking the answers to important business questions - amazon - cancer

Competition-based pricing

we typically think of it as trying to set a lower price than competitiors

environmental challenges of adapting internationally

weather, regulation

distinctive competence

what a company can make, do, or perform better than its competitors

clarifications of specifications

what features and logistics (like training) are required?

brand association

what you think or feel when you come in contact with the brand

loss aversion

when one focuses more on what you lose in a bargain than what you gain

when there is unequal information between buyers and sellers leading to market failure

when sellers have information that buyers do not have

deciding firm boundaries

which activities are you going to keep in house and which are you going to hire out? example: legal, accounting, IT

user requirements

who needs it and what do they need it for?

what did mayo discover from the hawthorne experiment?

workers performed better because someone was paying attention to them

definitions of the 4 common operations objectives - cost - quality - delivery - flexibility

∙ Cost is a measure of the resources used by operations, typically the unit cost of produc-tion or the cost of goods or services sold. ∙ Quality is the conformance of the product or service to the customers' requirements. ∙ Delivery is providing the product or service quickly and on time. ∙ Flexibility is the ability to rapidly change operations

Supply Chain Decision Framework: Inventory

◦ How much inventory should be held? ◦ What should the order size and reorder frequency be?◦ Who should hold the inventory? ◦ How can the inventories of suppliers and customers be coordinated?

management supply chain quality

◦ Kaizen and jidoka ◦ Planning and training ◦ Supplier certification ◦ Incoming materials inspection ◦ Process inspection ◦ Final goods inspection

Supply Chain Decision Framework: Capacity

◦ What is the facility strategy for size, location, and timing? ◦ How should Sales and Operations Planning be implemented? ◦ How should variable demand be handled with capacity adjustments? ◦ What priority rule should be used for scheduling?

Supply Chain Decision Framework: Quality

◦ What should the quality standards be? ◦ How can quality be controlled and improved? ◦ What statistical approaches should be used? ◦ How should the suppliers and customers be involved in quality?

Supply Chain Decision Framework: Supply Chain

◦ What suppliers should be used for products and services? ◦ How should sourcing be conducted and evaluated? ◦ What form of transportation should be used? ◦ How should warehouses be used to allow economic flow of materials?

Supply Chain Decision Framework: Process

◦ What type of process should be selected? ◦ How should the service delivery system be designed? ◦ How should material and customer flows be managed? ◦ What principles of lean systems should be deployed? ◦ How should environmental and global goals be met?