2nd business midterm
Materials requirement planning (MRP)
A computer based operations management system that uses sales forecasts to make sure he did parts and materials are available at the right place/time
Revenue
A monetary value of water firm received for goods sold, services rendered, and other payments (rents received, interest earned)
The accounting cycle
A six step procedure, that results in the prep and analysis of the major financial statements
Financial statement
A summary of all the financial transactions that have occurred over a particular Period. They indicate the health instability of a business.
Fixed position layout
Allows workers to congregate around product. Example plane.
Ratio analysis
Assessment of a firms, financial condition, using calculations and financial ratios developed from the firms financial statements
Computer, integrated manufacturing (CIM)
Both CAD and CAM, expensive, cuts out 80% of time to program
Maintaining quality
Consistently producing what the customer wants while reducing errors before an after delivery
Key product process
Continuous or intermittent
Operating expenses
Costs involved in the operation process, such as rent, utilities, and salaries
Production
Creation of finished goods/services using the factors of production
Assets
Economic resources owned by a firm. Include equipment, buildings, land, furniture, motor vehicles, that generate income, as well as in tangible items (copyrights/trademarks)
Processing to the accounting system
Entries are made into journals, the effects of these journal entries are transferred or posted into ledgers (classifying), all accounts are summarized
Budget
Estimated revenue/expenses
Assembly line layout
Few tasks at a time example ice cream
Balance sheet
Financial statement, that reports of firms financial condition at a specific time
The outputs of the accounting system
Financial statements (include the balance sheet, income, statement, statement of cash, flows, other reports)
The three-step financial plan
Forecasting firms, short, and long-term financial needs, developing budgets to meet those needs, establishing financial controls to see whether the company is achieving its goal
Purchasing
Function that searches for high quality material resources find the best supplies and negotiate the best price for quality goods and services
Financial accounting
Generates financial information and analysis for people primarily outside the organization
Operations management planning
Helps solve problems in service and manufacturing sectors includes facility, location, facility, layout, materials, requirement, planning, purchasing, inventory control
Modular layout
Hi enterprise, objects move, not in a continuous line, more like a diagram
Operations management part two
High quality goods, and services in response to customer demand
Activity ratios
How effective management is turning over inventory
Return on equity
Indirectly measures risk by telling us how much a firm earned for each dollar invested by owners
Managerial accounting
Info and analysis to managers inside the organization to assist on decision making
The transformation process
Inputs (materials, labor, time, capital) conversion (procedures, equipment, knowledge) outputs (goods, services, ideas)
Sound financial management
Is essential to all businesses due to operating funds, never ending, consists of managing day by day, controlling, credit operations, acquiring need inventory, and making capital expenditures
Factors of production
Land, labor, capital, entrepreneurship, and knowledge
Bottom line
Located in the income statement, the net income, or loss the firm incurred from revenue minus sales, return, cost, expenses and tax over a period of time
Continuous process
Long production runs that turn out finished goods overtime
Capital expenditures
Major investments in either tangible long-term assets, such as land, buildings, and equipment, or intangible assets, such as patent's trademarks and copyrights
Mass production
Make a large number of limited variety of products at a low cost
Liquidity ratios
Measure a company's ability to turn assets into cash and pay It's a short term debts.
Leverage/dept ratio
Measure the degree to which a firm relies on borrowed funds in its operations
Cost of goods sold/manufactured
Measures the cost of merchandise, the firm sells or the cost of raw materials and supplies It used in producing items for resale.
Long term forecast
One, five, or 10 years of how many will go in and out of the business
Intermittent process
Only making certain amount of products, products run short as different products are made overtime
Facility layout
Physical arrangement of resources, including people, to most efficiently produce goods, and provide services for customers
Production control
Plan, route, schedule, dispatch, follow up
Trade credit
Practice of buying goods or services, and paying them later, most widely used source of short term, funding, the least expensive, and most convenient
Cash flow forecast
Predictions of how money will go in and out of business is usually within three months
Short term forecast
Predicts how many will go in and out of the next 4 to 12 months, one year or less?
Facility location
Process of selecting a geographic location for a company's operations
PERT
Program Evaluation and Review Technique, analyzing all the tasks involved in the critical path
Leverage
Raising needed funds through borrowing to increase of firms rate of return
Statement of cash flows
Reports cash receipts related to three major activities of a firm: operations, investments, financing
Goodwill
Represents the value attached to factors, such as a firms, reputation, location, and superior products
Financial managers
Responsible for paying company bills/collecting overdue payments to make sure company doesn't lose money to bad debts, particularly critical for small to medium size businesses
Auditing
Reviewing and evaluating the information used to prepare a company's financial statements.
Inputs to accounting system
Sales, purchasing, shipping, payroll, bank, travel, entertainment (accounting documents)
Financial planning
Short/long term money flows to, and from the firm, its overall objective is to optimize the firms profitability and make best use of money
Mass customization
Tailoring products to meet needs of a large amount of people and their individual needs
Cash flow
The difference between cash coming in and out of a business
Income statement
The financial statement that shows a firm's bottom line
Finance
The function of business that requires funds for the firm and managers them within the firm
Accounting
The recording, classifying, summarizing, and interpreting of financial events and transactions in an organization to provide management and other interested parties the financial info they need to make good decisions
Three. Most common ways a firm fails financially.
Undercapitalization, poor control, over cash flow, an adequate expense control
Computer, aided design
Use of computers in the design of products
Computer aided manufacturing
Use of computers in the manufacturing process
Just in time inventory control
Used to cut costs and keeps a minimum of inventory on the premises and delivers parts and supplies just in time to go on the assembly line
Lean manufacturing
Uses half human effort, 1/3 of the engineering, 1/2 floor space, and 90% less inventory
Equity
What you own
Liabilities
With the business owes to others
Telecommuting
Working from home via computer, it's a major trend in business
Debt financing
funds raised through various forms of borrowing that must be repaid
Critical path
in a PERT network, the sequence of tasks that takes the longest time to complete
Flexible manufacturing
production method that is designed to easily adapt to changes in the type and quantity of the product being manufactured
Process manufacturing
the part of the production process that physically or chemically changes materials
Factoring
the process of selling accounts receivable for cash
