Account and Budget & Quality Control

What is the first thing you need to make a budget?

1st thing needed to make a budget is Revenue sales (revenue, sales, income is the same terms) how much money bring in to make the budget.

What is the balance sheet

3. Balance sheet: Statement which shows financial conditions of a business at a particular date (one point in time) this statement once to know how much debt you are in compare to your assets, liabilities and capital (equity owners interest)

6 sigma have three steps which is measure of variation, philosophy of wanting to eliminate the source of variation, and using DMAIC explain in depth the process

6 sigma is three things: 1. Statistical measure of variation (how much variation is in your process) remember variation is the change of the product and we want the product to remain consist and increase in quality to have the customer scarification. Variation is the enemy it cause defects and extra work on the organization and problems. Sigma is a statistical unit of measurement used to (use to measure standard deviation achieving six sigma (6 standard deviations from the mean) means there is little variation in a process) 2. Philosophy of wanting to eliminating the source of variation (For example let's say you are producing parts on production line and you have yield 90% which means 1 out of every 10 is failing you can actually find out what is actually causing the variation in your process because sometimes your process work 9 out 10 times but 1 out 10 it doesn't an that is cause by a source of variation. 3. Structure problem solving approach using DMAIC.

What is six sigma? What is it goal?

6 sigma is used in business across the world to improve business quality throughput and overall production not only in manufacturing but also in healthcare and other businesses (helps organizations focus on developing and delivering near to prefect products and services. If you can determine how many errors occur in a process you can systematically determine how to eliminate them and get as close to zero as possible A data driven approach and technique for eliminating defects and reducing variations (errors) in any process

How does the budget allow them to plan and control?

A person having a fixed (static budget) or a flexible budget depends on the nature of the business Budgets allow you to plan and control

What is the desirable turnover rate ratio? What does it mean when have high ratio What does it mean when have low ratio Why is low ratio not a good thing? What is the cost of goods sold?

A turnover rate of 2-4 time per month is often desirable High ratios = limited inventory is being kept Low ratios indicate large amounts of money are tied up in stock (don't want low ratios because food can spoiled Remember turnover means how often the inventory is going out so if have high ratio this means the inventory is leaving quickly can mean selling, wasting or goods being stolen Low ratio means the inventory is not being sold the Cost of goods sold: is how much it cost to buy the products that you are selling measures how often an inventory is consumed and replenished got inventory having low ratio is not good

What is the accrual basis? Provide example of the forms of payment:

Accrual Basis: recognizes revenue when earned and expenses when incurred regardless of when the actual cash is received or dispersed) Example: you earned money but it not received yet probably it is going to be received at the end of the month Consumer pays with a credit card the business don't have the money yet but it's already their when the credit goes through.

How does forecasting production reduce cost?

Another way to save cost of food is forecasting production step in estimating how many food used.

What is an asset? Provide examples: What and why is account receivables an asset? What is the difference between and long term invest /asset and current asset provide examples?

Asset: Something that is probable future economic benefit that is obtained or controlled by a particular entity as a result of past transitions or events. Even if the asset is probable and not guaranteed we can add it to the balance sheet as an asset. Examples: are goods and production owned, cash, inventory, account receivable (money that is owe to you amount all the people didn't pay cash and you are waiting to received payment so we know it's not 100 certain that you would receive this money but if we just think it's probable can go ahead a record as an assets So on balance sheet can have current asset which are cash, account receivables, inventory (so basically things that are already cash or things expected to turn into cash within the next year or operation cycle) Long-term invest: which are invest that is not expected to turn into cash within the next year or so. (Example: equipment, building, machinery) Intangibles: trademarks, Patton's things you can put your hands on but that is probable future economic benefit So these are the types of assets that you can see on a balance sheet and remember that an asset is anything that has probable future economic benefit something that in some point in the future you will get some benefit from example machinery you going to use to the machinery at some point to make money (economic benefit) you would have had to control it obtained it or own it as a result of past transition or an event.

What is benchmarking? How can benchmarking improve the business? Also why must you compare your business to the same types of business?

Benchmarking Comparing our performance against best performance in the field. Have to compare apples to apples you can't compare the nursing dept. to one hospital to the nutrition dept. to another hospital because they don't compare. It have to be the nutrition dept. to one hospital and the other nutrition dept. to the other hospital Same thing when it comes to the restaurants won't compare an Italian restaurant to an Mexican Restaurant because they both restaurants but not selling the same cuisine and remember have to be the best. What is benchmarking: Making meaningful comparisons to others and identifying opportunities to improve If you are the one doing a benchmarking study then you are the one that need to decide what is meaningful and you need to decide what is the peer group you want to compare it to and you need to find opportunities to improve. Benchmarking is use to compare best in class (is use to identify the current leader in the field and identify the gap way of that letter and take action to close the gap

What is budget projection? What does the budget projection inform the business owner?

Budget projection: Determine cost for this year (or old budget) and then multiple expected increase for next year Or you can think of it this way too) Budget projections = ( old budget X % increase) + old budget

What is a budget? What form of management is budget done in? Why must the budget be flexible and adjustable? How often is budget review?

Budget purpose: give the manager a basis for control (which budget is done on the control function of management) Budget allows the management to estimate future needs. Budget is made to control the cost. The budget must be flexible and adjustable according to change Usually review monthly

What is the capital budget? What is the return time period of the items?

Capital Budget: Capital expenditures such as improvement, expansions and replacements in building, equipment, computers, software, and lands Includes expenditures whose return should last more than one year The capital budget plans for the funds we needs to build and maintain our hard physical assets Think if capital budget as larger purchases (like the mortgage if think from a personal standpoint) because like mortgage many of the larger assets are paid off within more than a year with interest) Examples: roads, water plants, buildings, machinery, other equipment. This one have the big ticket items (More than 5000 dollars like big equipment)

What are capitals/equity? When it comes liabilities and capitals/equity which ones have the first assets to the claims?

Capitals/Equity: Interest of the owners in the company (owners) compare to the liabilities (which is the lenders) So the Capitals/Equity is the residuals interest in the assets of an entity that remains after the deducting of the liabilities (because the liabilities must always get their payment first) Asset = Liabilities + Stockholder Equity (capital) So all we are saying is let's take the Assets of the business lets deduct the liabilities because the lenders have first assets to the claims and then whatever is left over is the stockholder equity

What is the cash basis? Provide Examples of form of payment.

Cash Basis - a major accounting method that recognized revenues and expenses at the time cash its received or paid out ( This means the person is getting the money in cash or a debit card right away and it hits consumer bank account right away) This is the money have immediately Think: Cash right away!!!!

What is the continuous quality improvement (CQI) What does it focus on? Provide examples of CQI. Why is CQI under the umbrellas of TQM?

Continuous Quality Improvement (this is looking at the organization rather than the customer so what can you as employee to better the organization) C = if you close it looks like O this is for organizations Reviewing operations on a routine basis, providing leadership, structure and training to continually improve the process and outcome of the organization rather than the customer Example: CQI in the hospital setting Example: Food service director provides monthly training to staff that has helped the department reduce FTEs by 18% increase productivity by 25% and decrease food cost 15% The idea behind Continuous quality improvement is that there is always room for improvement. The organizations have to take the time to adopt the CQI process to increase improvement and save time. Continuous Quality Improvement: (CQI) is an approach to program management that ask us to always look for how we can be doing better. The goal is to improve the efficiently of the systems at the programs that can better service the customers/patients/ clients. CQI: Seen in healthcare because hospitals are charge with caring for the patients that are sick. The goal is to have high quality short efficient experience. Example: short wait times, competent nurses, competent doctors so if the hospitals are thinking about ways they can improve that can provide those qualities to their customers. CQI is under TQM because the TQM is looking to improve the customer experience and CQI is looking for way to improve the organization if you improve the organization we are sense going to improve the customer experience as well.

What is a cost benefit? What is the cost benefit looking at regarding buying something

Cost Benefit (Should we invest on it) Comparing the benefit of the product to how much it will cost you. Compares the cost and financial benefit of project or decision Example: Incorporate a central ingredient room, which will result in food cost reduction If the benefit outweigh the cost than go for it but if the cost outweighs the benefit then probably shouldn't buy the product because doesn't have a good cost benefit ratio. Example how a question will be ask: If you buy this software it's going to save you 6 dollars per person but it costing you 3 dollars to make per person. So I am making 6 dollars but it's costing me 3 dollars to make per person 6- 3 = 3 profit so it is good. If the benefit is greater than the cost the program/ service is economically efficient

View how a create a cost benefit analysis?

Cost Benefit Analysis: How to Conduct A CBA 1. Determine the cost 2. Calculate Benefits (labor save, energy save, increase productivity) things that don't have immediate cost in benefit but overtime will) 3. Compare Alternatives (consider what will happen if you invest in that product etc. and what will happen if not invest in the product) and compare so you subtract the cost from the benefits and see how these things rate against each other 4. Report and plan action (make recommendation base on the analysis figure out what you want to do)

What is the cost effectiveness? What is cost effectiveness looking at in regards in using an investment

Cost Effectiveness You assume that the goal of the project is worthwhile (this is you already invest in the product but want to know how will get to your goal) Provides a comparison of alternative courses of action in terms of their cost and effectiveness in attaining a specific objective The goal is to show what works best for whom and for what cost Already need the product so made the investment but want to know how should buy the product and how to use the product to increase effectiveness and also still remain product quality Looks at which method is most effective in achieving the end goal Example: Compare food cost, labor cost and customer acceptability of mashed potatoes made from scratch vs frozen (ready to serve) Example Buy a head of lettuce or buying the lettuce precut. You already know you need lettuce but now what to know how you should buy the lettuce which one will save you money and time (increase productivity and reduce cost) should buy it not precut to save money on the lettuce or should you buy precut to save on labor Think effectiveness: Do things the right way (making sure you are reducing cost and increase productivity

What is the cost of sales?

Cost of sales: Cost of raw food and beverage sold or product sold same as cost of goods sold

What is cost profit? How does this pricing benefit the business owner?

Cost profit: Price the product to ensure a predetermined % of profit with each sale Example: Pricing a product to cover the cost of goods (how much you paid for the product and to make a product

Six sigma use the process DMAIC. What does this stand for?

D = define the problem M = Measure the problem or the value stream to understand how it works. A= Analyze this for when we get to the root cause of the problem so we can put counter measures or solutions in place I= Improve and solve the root of the problem (come with the best ideas you and team have to make changes to the process and eliminate the variation. C = Control and maintain perfection (locking the gains of the new process you putting in standard work making the process visual and follow up as a leader in the team to make sure the process is running the way you want and that variation that was causing the problem is gone.

What does the daily food cost report? What should happen when the foods cost percentages is not within limit?

Daily Food Cost Report(food cost percentage) : Tells us about what percentage of the income was spent on the food sold Food cost % = daily food cost / daily income Every food service organization has its own standard or level of percent income to spent on food cost percentage varies within day to day within reasonable limits there is little cause of concern but if the average of several food cost percentages not in line with the desirable it indicate the need to investigate to determine the reasons

What is the first step in decision making /solving a problem Explain the other steps

Decision Making and Problem Solving Techniques Steps on Decision Making and Problem Solving 1. Recognize and analyze the problem 2. Determine possible solutions (what are the alternatives) 3. Gather the data (information that will help to choose the correct alternative) 4. Choose one of the alternatives 5. Follow up

Market Segmentation discuss demographic, geographic, psychographic, and behavioristic variable? Provide examples

Demographic variable: age, gender, race, education, social class, income, etc. Geographic variable" urban, suburban, climate, resources, cultural values Example: Tex-Mex food accepted in the New York City Psychographic Variable: Lifestyles (What is important to them and their mode of living), motive (the reason the customer makes a purchase) Variables: Psychographic variables include lifestyle, attitude, personality, and values think psychology= values and personality motive how you think Behavioristic Variable: Loyalty to the product, Knowledge of the product, Buyer readiness to buy Example: Frozen meals packed in single servings to meet needs of people who live alone Example People that love Apple products they are loyal to the product don't buy anything else because they know the product and love the product. think behavior is the company know your loyal to them example Sophia always loyal to T mobile even tho they suck

What is direct (variable) flexible cost? what is this cost direct? What are some examples of flexible cost?

Direct, Variable, Flexible cost: Fluctuate as the level of product output changes Variable cost is directly affected by sales so you have to be flexible Variable cost is a cost that changes based on the level of activity (number of units/services or the number of hours work) as the activity level increase their going to result in change in cost. Example: China, food, laundry, repairs These are directly by the sales because if you don't have high sales will not use a lot of china, foods and laundry or repairs but if you have a lot of sales those things will increase.

What is direct and indirect cost regarding buying something for business/investment ? Explain and provide examples

Direct: increase in sales due to new software Indirect: Money available to invest on new equipment (includes the savings) Direct vs indirect can also go with health You have a program that helps me manage Diabetes Example: Direct: blood glucose levels are going to get control and have more energy Indirect: Miss less days at work and decrease doctor visits

How do you conduct an income statement? What are you looking at and what is the end result Explain when the income is positive, negative or breakeven?

Example: Income Statement ABC Corp for the quarter ended 6/30/2015 (have to know income statement for when doesn't matter what happen before the quarter before that or after what to know the quarter for this time period) So it began March 31st and now it is ending 06/30/2015 (3 months) so we want to dig in to figure out what was the revenue, expenses during that quarter. Revenue: Sales = 100 Interest = 3 Expenses: Cost of goods sold (cost to buy the toys) = 40 Interest Expenses (money borrow/loans) = 6 Selling general and administrative expense (shipping/ salaries) = 15 In conclusion we have a summary of all the company expense and revenue that this company had for this quarter let summarizes them and come up with a final number called net income. So we will add up all the revenue which is total 103 and subtract the expenses 61= 42 net income (also called profit so the net income talks about what happen to this business during the quarter period of 06/30/2015 (So this is showing what was the income for this quarter in this case the income was in the positive but sometimes can be in the negative or breakeven)

What is the different in sales and profit? Provide an example: What happens when the expenses is higher than the sales? How does the income statement factor in the expenses, profit and sales?

Example: Open business to a Bookstore Start selling books So a person came and purchase a book and gave you 20 dollars for a textbook that 20 dollars is sales revenue. Profit is what you get after you deduct all the expenses that it took to get you that 20 dollars. Sales 20 dollars but to get that 20 dollars we had to subtract out rent, wages, utilities, and also had to buy the book (which is call cost of goods sold, which is the cost of the things we sold) so let's just say it cost us 10 dollars for the book Utilities - 2.00 Wages - 3.00 Rent - 1.00 Expense total 16.00 20 - 16 = 4 .00 profit (the bottom line) so when you get the sales you have to take that and pay the expenses and the ending of that will result in the profit. If we are lucky because if the expense is a higher number than sales this can result in a loss which is a negative. This information use to file an income statement because the end result in profit in other words income the money you are taking home after the deductions.

What is the fixed budget (static budget)? What type of business does a fixed budget (static budget)?

Fixed Budget (Static Budget) It is prepared at one levels of sales or revenue Static budget is the budget doesn't change over the given period budgets for the departments of the company are set and must be follow regardless of changes in the period. Static budgets may work well for a short periods of time and or for organizations that work with predictable revenue and expenses. Example: It does not expect major change in patient or customers during this year

What is the flexible budget? Why would you use a flexible budget? What is the benefit of flexible budget?

Flexible Budget: Adjusted to various levels of operation or sales Example: Closing a floor for renovation or sales increase or decrease in the business Flexible budget allows you set expenditures goals as percentages of revenue. This allows and organization to manage spending base on more recent information rather than looking at the year ahead a hoping circumstances don't change SO in summary the flexibly budget is just adjusted budget based on the change various levels of operation or sales they give high to low ranges of budget base on the activity of the organization Just because you have a traditional budget doesn't mean you budget can't be flexible

What does the food cost per meal depends on? Explain?

Food cost per meal: Will vary depending on the quality of the item chosen, quantity purchased and waste discarded

What is the food cost the most readily control item? How does the food cost plan the menu? Why is menu planning important for a restaurant? How can type of service reduce cost and which type of service reduce the most cost? What type of purchasing method can reduce cost?

Food cost: most readily controlled item (subject to the greatest fluctuation) Factor: how you plan the menu? Menu planning is important because it make the operating run smoothly and reduce cost Type of service can also reduce cost selective menu reduce waste and cost (will learn more in Domain 4) Purchasing methods: when buy in group buying this reduce cost (think Sam's. Costco)

How do you create a operating budget? (What expenses are you looking at to create a operating budget) What are the 2 steps

Forecast the revenue, expenses and profit for a specific period of time so you looking at what is my food cost, what is my revenue for example if the restaurant need toaster/ silver ware the little things go into the operating budget. The steps in creating an operating budget: 1. Forecast sales revenue (income) portion 2. Then budget expenditures labor, food, operating expenses related to the projected level of revenue (labor, food, operating expenses are the 3 major cost in food service) Labor is the most expensive (semi variable cost), food cost is variable cost can be adjusted and operating cost is variable cost as well depends on the sales and the business)

Out of the frontline workers and a big project which one will makes the most potential improvements?

Fun fact: that 80% of potential improvement comes from frontline employees. The other 20% might come from a big project but it actually the contributions small changes from everyone that makes the difference. You see Kaizen although small should not be underestimated. Example like the tortoise and the hare we not looking for the big break but small constant change that over time when the race. Kaizen is the way of life because everything can benefit from improvement Kaizen starts with you. So remember to engage in small improvement over time.

What is a general ledger?

General ledger: Records and reports transitions categorized by account numbers. Summary of all expenses and revenues for the month by category like meat, fruit and diary (meat is the most expensive)

What is the gross profit? What is the formula? How does gross profit differ from net profit?

Gross Profit: profit shown after deducting raw food and beverage (cost of sales) from sales (revenue) Gross profit is after food and beverage Example you made 100 dollars but you spent 50 on food and beverages so your gross profit is just 50 dollars it's not the total 100 because you're taking out what you spent for food. Gross Profit = net sales - cost of good sold (how much it cost you to buy the goods) Or Revenue - cost of goods sold = gross profit So it is profit after accounting for the cost of making or buying the product. If the business is a restaurant the cost of goods will be buying the raw foods to make the product The reason this is different from net profit because you are not factoring operational cost (such as insurance, rent, utilities, salaries all of the things the make your business run)

Why is having a market niche important?

Having a niche is important because if you try to cater to everyone your overall marketing and message won't speak to anyone. Your niche can also be linked to who your ideal client is. So, it's important you have a targeted niche market and speak to a customer or client in a certain way which they can really relate to

What is histograms? What are histogram use to show? How is a histogram plotted explain what is the interval and the frequency

Histograms A bar graph that are used to display graphically the frequency distribution of data (they are not bar graphs that are space) This is use to show the bell curve (what to see if the bell curve is good) Histogram is a bar graph that represent a frequency distribution. The width represent the interval and the height represent the corresponding frequency. There are no spaces between the bars. The interval have the same width in size as you can see the above example on the X axis have 10 intervals. So to giver the frequency you will count how many times you see the numbers listed in that intervals (how often you see the number) and then you plot the numbers Once plot you can see the mode, median but the most important is to see the bell curve the mean

What does the line graphs show?

If you want to follow trends use the line graph Example obesity trends in time from 1950 to 2022 this will show the increase and decrease the best

Why are you looking at the sales and the expenses through an income statement? What is the goal of income statement?

Income Statement: A summary of results of company's operations (sales/expenses) over a particular period of time (can be a quarter can be a year or a month the time doesn't matter just taken a summary of the results and viewing to see what happen the operations example what happen to sales last year). What was sales last period or the expenses last year The goal of the income statement/ profit loss statement /revenue /expenses is to analyze operational effectiveness want to see is the business thriving

What is the traditional/incremental budget looking at to create? What is added to the budget and why? Why does this budget works well in a stable environment? Why does it often leads to overgrowing budgets?

Incremental Budgets: Essentially reviewing and adding to last year budget (you start with the budget from last year and you add on to the additionally activities you want to complete for the current year and add/ consider the inflation factor) but this budget is assuming you don't have any change to the program/ business. Works well in stable context Often leads to overgrowing budgets (The incremental budget leads to the budgets that keeps getting bigger because you taking last year budget add to the budget.

What are fixed (indirect cost)? why is the fixed and indirect cost? what are some examples of fixed (indirect cost)?

Indirect, Fixed Cost Do not vary with the number of good or services a company produces Fixed cost is indirectly affected by sales (You need to pay no matter what): Not affected by sales volume (number of people served) not directly evident In day to day activities requires the business to exist even if it produces nothing cannot be readily changed It doesn't matter if the sales increase or the sale decrease these are things that can't not be paid because you didn't have a good month in sales (stay fixed within the range of sales volume) Fixed Cost: Have you ever heard someone say that a fixed cost there nothing we can do about that So what is a fixed cost: remain constant regardless of the changes in activity level? (Number of sales, units/sales or services) Example: rent, taxes, insurance, interest on debt)

What is the inventory turnover ratio? Why is inventory turnover ratio good thing to observe how does this determine how good the business is going?

Inventory Turnover Ratio: indicates company's pass ability to sell its goods. Converting inventory into cash is critical for a company to pay its obligations when they are due the goals is to show are using efficiently using the assets to produce more income. ( want to show can produce income with the investment of inventory)

How does the Gantt chart works and created? What is the benefit of the Gantt chart?

Is one of the widely use project planning tool. Is the icon for project management Created by Henry Gantt The Gantt chart plots time along the horizontal axis and on the vertical axis we list all the task and activities that need to be done to accomplish the project. Now once you create graph you represent each activity by a bar and the length of the bar represent the duration of the task and the position of the bar represent the scheduling of the task. If one task follow the other than the bar follows the previous bar. And so what we often see is on the Gantt chart is these long diagonally of one activities after the next in time because each task is depending on the completion of the pervious task to get started. And we might have other work stream that run parallel. The shape you might see is a small diamond that represent a mile stone (could mean a decision point or completion) Also can have vertical line stating the date so at any point in time we can read off where we should be in our project and then assess the level of completeness Must have a key that indicate what the symbols and bar mean mean Sometimes call a bar chart represent our project plan by making each task into a bar and putting those bars onto a time schedule. Your Gantt chart is a powerful tool to help you think through your plan and to communicate it and to monitor it during deliver

What is the traditional/ incremental budget?

It consider last's year's budget as a base plus and inflation factor Use last year budget to base off budget for the current year (this year) always include the inflation factor which is thinking everything is more expensive as time goes by. (Example food cost or labor cost increase by 5%)

What is the semi variable cost?

It is an expense that contains indirect and direct cost Example: Labor, maintains, utilities A semi-variable cost, also known as a semi-fixed cost or a mixed cost, is a cost composed of a mixture of both fixed and variable components. Costs are fixed for a set level of production or consumption, and become variable after this production level is exceeded

What is the meaning of the word Kaizen what is the culture background

Kaizen embrace the lean culture (eliminating waste), engaging people that are solving problems and making things better. Kaizen is a Japanese word and it has two part there is Kai which means change and zin which means good and if you put them together you get an idea of a good change but when translated in English we say continuous improvement so that what kaizen is it's continuous improvement. Making changes for the better. But the better way to understand kaizen not just any kind of improvement but actually small improvements for the better you see kaizen is incremental its small process that over time amounts to major results In fact there is a saying that is said about kaizen that everyone every day and everywhere! No one is off the hook in making small changes every day to make changes and every place.

Why is labor cost less controllable than food cost? What percentage of the budget does operational cost cover? What is standardized portions use for?

Labor cost: Less controllable than food costs Operational Cost: Cover 12-18% of budget in utilities (electricity), laundry, cleaning Why standardized portions use is: To control cost and want to control the cost and customer satisfaction everybody gets the same size

why is labor a semi variable cost?

Labor have the salary worker which is fixed and the hourly workers which are flexible (depending on the time of the year example seasonal workers)

What is quality and why is it important for business?

Quality is important for financial success and customer satisfaction

What are liabilities?

Liabilities: Amount you own to others Debt/ borrow money is the easy example but liabilities can also be salaries (to pay the workers), taxes you owe. So anything is payable. Summary: Anybody we owe some type of economic benefit and we will have to sacrifices keep that money and transfer asset (money) or provide service to another person in the future as result of past transitions or events

What is a liquidity ratio? What things are liquidity ratio looking at in time of paying them? What does it mean when a person have high or low liquidity ratio?

Liquidity Ratio: Ability to meet current obligations. Assess ability to meet short term debt (pay bills when due) Current assets, and current liabilities Example: Rent at end of the month When looking at the short term obligations (are you going to pay the rent at the end of the month) Example paying your workers every two weeks If you high liquidity ratio that means won't have a problem paying the workers but if have a low liquidity ratio will have problem paying the workers. That means the cash flow budget is not good and having problem paying the workers at the end of the week. Think low is failing and not have a lot money in the bank

What is loss leader pricing? Provide an exmaple

Loss leaders: items priced lower to draw people in the hope that they will purchase other items at normal price Example: In the Grocery store buy hot chocolate for 50% off and right next to it will be coffee cups and marshmallows (So you in up buying more than the hot chocolate)

What is Kaizen? How does it play a factor in quality control and improvement? How does Kaizen involve self improvement? provide an example.

Make continuous small changes to improve the process on a day to day basis rather than large revolutionary changes Think of small changes to improve the everyday activities. Kaizen is Self-improvement Example always late to work and notes not getting done on time because you're late. Well to improve can make the small change to get to work on time to get notes done on time

What is the market niche? Why is this the first step in marketing planning?

Market Niche: Identify a need to fill (First step in the marketing plan) A niche market is the subset of the market on which a specific product is focused example women's shoes \. The market niche defines the product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that it is intended to target. It is also a small market segment. Here are five steps that any business owner or entrepreneur can use to find that perfect niche. Do some soul-searching. Survey your target market. Research the competition. Assess potential profitability. Test your idea.

What is market segmentation? What does segmentation means

Market Segmentation - divide total market into groups of people with similar needs, wants, and behavior Segmentation - separating people into their interest. Looking at the person lifestyle and deciding on why the person is making the purchase. Example working with low income looking at their current problems and cost friendly High income: looking for goals and long-term change cost is not a factor. 6 months to 1 year

What is a marketing analysis?

Marketing Analysis Process of identifying a need, assisting potential clients in recognizing that need and filling that need This is studying the market and determine what is needed and how to filling a need to make a profit

What is the marketing channel?

Marketing Channel It's the medium through which a change in ownership moves commodity from producer to consumer (producer, processor, distributor, supplier, and customer) The product or service is anything you offer in exchange for money or something else of value Think: channel = equal movement between two people producer transfer the product to the consumer, and consumer transfer money to the producer

What are the marketing strategies? How does this align with the marketing mix the (four P's)

Marketing Strategies: Create and maintain an appropriate marketing mix (the four P's) (route chosen to reach goals)

Go in depth what is the product, price, place and promotion? Provide examples What is a signature brand? Also what is the different in place and placement (how is placement beneficial)

Marketing mix: Product: A good service or idea (includes use, design, feature, quality) Signature brands refer to unique items your business has developed Example: RD creates a diabetes management program for diabetic clients Place (Market Place) where you exchange service or goods (retail, phone, chat, digital, multi-channel options) This Is where you sell your products this is not the same as placement (placement is when you place products in certain are to gain traction (example placing candy by the cash register for the kids to ask for candy) Example: Online is the place of virtual Dietitian Price: The monetary exchange of a product Example: Discount, price list, payment plan Promotion: Consists of content, communication and exposure to persuade audience to purchase the product of service Example: Publicly, run a contest, sales promotion, news release (provides info about your product sent to the local media, news, ratio, and TV)

What is the marketing objectives?

Marketing objectives: Quantifiable, attainable goals number of clients or sales volume you wish to achieve. think we quantity because we want me to make money

What is a market place? Examples:

Marketplace: where service is being offered A marketplace is any location, whether in person or online, that facilitates the exchange of goods between buyers and sellers. A marketplace is a platform where vendors can come together to sell their products or services to a curated customer base. The role of a marketplace owner is to bring together the right vendors and the right customers to drive sales through an exceptional multi-vendor platform - sellers have a place to gain visibility and sell their products, and the marketplace owner earns a commission from each sale Examples for marketplaces are large companies with huge inventories like Amazon, Rakuten or eBay or niche platforms like Etsy (handmade crafts), Runnics (sportswear for running) or Shop.Mar

What is a net profit? What is the equation? How does it differ from gross profit?

Net Profit: Profit shown after all expenses have been deducted from sales Net profit = gross profit - operational expenses So the gross is 50 but you still have to account for the utilities and the labor and all the other expenses so let just say those expenses are 30 dollar which leaves you will 20 dollar for net profit Net profit is really the final amount taking home this is the income that you take home

What is the net worth ratio (solvency) What is net worth looking at in things paying off? What is the time frame?

Net worth Ratio (Solvency): Measures the ability to meet long term debts. Example: car payments/loans or educational loans Example will buy a big equipment and have to pay for it every month till it is paid off 30,000 loan to start the restaurant if you have high net worth (Solvency) this means your good and can pay the loan. But if you low net worth ratio this means probably going to go into bankrupt because cant pay the long term debt Think low no money in the bank to pay of debt

What is the benefit of having a zero based budget?

Once you do a zero based budget you can switch to a traditional/incremental budget for the next year if you didn't have a business to start with The benefit of doing an zero base budget is you are paying for the things you want to complete for the current year and not just adding in things from last year budget that doesn't align with the budget you want to complete this year (this is why traditional/ incremental budget keeps growing because adding things to the budget that may not necessary apply to the current budget or the budget may be wrong)

What is the Pareto Chart?

Pareto Chart (use the bar graph) SO 80% problem comes from 20% of your input. Often called the 80 -20 rule (80% of outcomes comes from 20 % input) Manager should focus on the tallest bar first since it is the biggest concern and should be addressed first Focus on the biggest concern first Example: Wait time do a scramble cafeteria to decrease time

What is the payback period? What is the formula? why is the shorter payback period better?

Payback Period: Is the time it will take to earn back the money you invested in an assets How long is it going to take you to pay back on an investment you made? Formula: payback period = total cost of service / total cost saved An investment with a shorter payback period is better

What is the Zero Based Budget: (Base line budget)? why is the zero based budget planned oriented?

Planning oriented Current year budget is prepared from scratch. Each expenses must be justified Example" New department in an organization This is use if it's your first time doing a program etc. example first time doing a summer budget for meals (will have to do a zero budget because don't have a pervious budget to go off so have to start from ground zero. So if you have to buy 50 coolers have to justified why you buying the items

What is a position statement? How does this commutate with the target audience?

Position Statement: How you would like to market place to view your product A positioning statement is a brief description of a product or service and an explanation of how it fulfills a particular need of the target market. The goal of a positioning statement is to align marketing efforts with a company's brand and value proposition

What is the product mix? Provide an example

Product mix: is the group of items you will offer Product Mix, another name as Product Assortment, refers to several products that a company offers to its customers. For example, a company might sell multiple lines of products, with the product lines being fairly similar, such as toothpaste, toothbrush, or mouthwash, and also other such toiletries.

What is the marketing mix ( the 4 P's)

Product, Price, Place, Promotion

What is the Cash Budget (cash flow budget)? What is the cash flow budget looking at? What is the main purpose of creating a cash budget (cash flow)

Projected revenues and expenses showing inflow and output of cash Purpose is determine will fund be available when needed Project revenues (money getting in) and expenses (money being taking out) Are you going to have enough money over time to be in the positive in the business (How much money receiving and how much money is being taking out of the business) A cash budget is a company's estimation of cash inflows and outflows over a specific period of time which can be weekly, monthly, quarterly, or annually. A company will use a cash budget to determine whether it has sufficient cash to continue operating over the given time frame You want to have a good cash flow because want to make sure money is coming in to pay the expenses.

What is promotion pricing? How does this differ from promotion? which one is long term and short term? What is example of promotion pricing?

Promotion Pricing - sale or special price is done to increase sales during a slow period (this is not the same as promotion but it is under the same umbrella. Promotion pricing is only short term compare to promotion this is long term because you always want to promote your product for a sell. Example 2 for 1 Sale for the Labor Day weekend.

What is quality control? How does the production schedule increase quality control?

Quality Control (the quality of the product, production schedule to make sure stay on track)

What is reengineering? How does play a factor in quality improvement?

Reengineering Business Process Reengineering involves the radical redesign of core business processes to achieve dramatic improvements in productivity, cycle times and quality. In Business Process Reengineering, companies start with a blank sheet of paper and rethink existing processes to deliver more value to the customer

What is resource allocation ? Out of labor, food and operating expenses which one is the most expensive? Also

Resource allocation: efficient allocation of people, materials and equipment to meet the needs of the operating system can lead to cost savings. The CPM Critical Path Method helps plans and control an operation it identifies the most critical activates to best allocate limited resources (need to learn about the CPM) Remember: (labor, food, operating expenses are the 3 major cost in food service) Labor is the most expensive (semi variable cost), food cost is variable cost can be adjusted and operating cost is variable cost as well depends on the sales and the business

What is a revenue and gain and provide and example?

Revenue: Inflows enhancements of assets or settlement of liabilities from delivering or producing goods rendering services or other activities that are related to the firm's core business operations. This differs from a gain Revenue: Sales, interest, dividends, rent (in real estates) Gain: One time of money and not related to the firm's core business operations Example Owner of Restaurants what will be the revenue and what will be the gain Revenue: sell food, sell soda drinks, may be put some money in the bank and earn interest on the money Gain: work truck use every day have a put up but it gets old and what to sell it let's say you bought it for 100 dollars and now you selling it for 150.00 so you sell is for 50 dollars than what you pay for it so you have 50 dollar increase this is call a gain (when it equal to the income they both increase but the gain is one time thing and doesn't related to the firm's core business operations because you not in the busy in selling trucks (now if it was a car dealer ship it will be a revenue because in the business in selling cars etc) So if the flow of money is related to the core firm business it is a revenue but if its and increase of money that's not related to the core business operation it is a gain.

What is a scatter diagram what does this shows?

Scatter diagram Examine relationship (correlation) between two variables This is the R value

What is the operating budget? What are some operating budget examples?

Shows to manger, how much revenue is required to continue with the operation (Example: food, labor, maintenance) What do you need to operate business (day to day budget) the operating budget identifies all the money we need to provide all regions day to day programs expenses and services (think operating budget as monthly personal expenses food, utilities, clothing when looking at personal side point Examples: staff wages, office supplies, fuel, and utilities.

How does cash budget ( cash flow) makes sure the business stay open and take in to account when the business is running slow?

So in additional in that it's important to know how important it is to have a cash budget for a business. Because you might have the best idea in the world but if you run out of cash you are not going to have a business. You might say if you have a great business why would you run out of cash? Well there are things like seasonality for example of you run a ski resort if might be a good ski resort but you don't plan in the summer months we won't have any cash coming in you have to plan and budget for that so you have to cash when you need it.

What is the main goal of 6 sigma?

So in summary if you start by having a Philosophy of eliminating the source of variation you follow the DMAIC process to solve problems and fix them then you can see the results Statistical use control chart and other methods to see the amount of variation go down. And when variation goes down yield (final result of the product) and throughput goes up and you have a better product at lower cost and you can delight your customers The goal is in Six Sigma is to eliminate them and get as close to zero as possible

What is the balance sheet helping the business determine? Can you provide an example? Also when one side of the equation change what must happen to the other side of the equation?

So what is going on here? So asset is things that the business owns (example cost, buildings, equipment) but although the company owns these things there are claims on the assets which are liabilities (debt borrow money from a bank owe) and then Equity (claims by owners) Example: Business DJ at weddings Have to buy some equipment cost 5000 let say that this is the only thing you owe which is the equipment. So that equipment is an asset so if we would like at a balance sheet the equation Asset = liabilities (debt/borrowing) + Equity (which is the owner share of the assets) 5000 = 4000 +1000 So we have to figure out the liabilities and equity so we have to figure out the equipment was paid for So let's just say you took 1000 dollars out of your own pocket to put towards the business Well that is the equity portion that your claim of the assets of the business because you are the owner. So you got a 1000 dollars in equity. But how else was the equipment paid for? Well let's just say you borrow the remaining 4000 dollars from a bank so now this represent the liabilities (debt owe) But let's say for moment that you want to invest 200 cash to use for the future so now you have 5000 equipment in assets and 200 in cash asset but remember when the right side of the equation goes up so does the left side of the equation So now you have determine how was the 200 received did we borrow the 200 or did the owner have the 200? The owner had the 200 so the 200 will go towards the equity side of the left side of the equation. 5200 = 4000 + 1200 So whatever you do to the left hand side or the right hand side have to be corresponding change to the other side. Asset = liabilities + capital (Equity is the same as Capital) The fund invested by the owner in the business or the net amount claimable by the owner from the business is known as the Capital or Owner's Equity or Net Worth. This formula helps he company to be aware of how much money they have to pay for the things it owns (assets) by either borrowing money (taking liabilities) or taking in from the investor/self (equity)

What is the difference in social and business marketing? Provide examples

Social Marketing Social Marketing is used to develop programs that facilitate voluntary behavior change for improving social and personal wellbeing (principle to advance a cause idea or behavior) they aren't selling a product but selling the idea of a behavior change. Example: Got Milk campaign encourage you to drink more milk Example: designed to move by Snap -Ed a program to encourage you to stay active Business Marketing: Selling a program or service to fill customer's needs or desires not looking at behavior change but looking at filling the need of the customer. They don't target the general population but target the population that needs their service or products. Example software to sign documents Example: Steel Company marketing to companies who make buildings

What is social media marketing?

Social media marketing: Form of internet marketing using social media network

Profit and loss statement/income statement/ revenue and expenses statement (mean the same thing) Explain why.

Statement shows operating results over a period of time Shows that your net profit consists of revenue and expenses over a period of time Looking at the whole month of revenues and expenses and at the end of the month to balance the month out Summary lookin at how much you made from the business and your expenses to determine how much you brought home which is the net profit.

What is strategic marketing? How does strategic marketing lay down the foundation of the business. Explain SWOT analysis?

Strategic Marketing: It is the process of documenting or establishing a direction of your business (route chosen to reach the goal of business) Long term view of marketing (SWOT Analysis) Establishes your mission vision, goals and plan of action

What is sunken cost?

Sunk costs: already incurred and cannot be recouped by a new decisions or alternative cost involve in studying merits of a new computer (The money that is already gone)

There are three element of Lean: Eliminate waste, variation and over burning of the employees explain how this can improve quality and the organization? also Toyota lives by Lean explain this have help they to remain successful in the car manufacturing business?

Taiichi Ohno is the founding father of Lean which states the Toyota way isn't just one or two elements but several elements that work together as a complete system. So again is it a management system for running the whole business most people when ask what is Lean will say Eliminate waste and they are right that is one element of Lean but there are two more key elements 1. Eliminate Waste is number one (waste is any non-value activity) A core principle in lean methodology is the removal of waste within an operation. And in any business, one of the heaviest drains on profitability is waste. Lean waste can come in the form of time, material, and labor. But it may also be related to the utilization of skill-sets as well as poor planning. In lean manufacturing, waste is any expense or effort that is expended but which does not transform raw materials into an item the customer is willing to pay for. By optimizing process steps and eliminating waste, only true value is added at each phase of production. 2. Eliminate Variation in the process (the business have variation natural because people are involved) variation (a different or distinct form or version of something) or a change or different in a product the goal is to produce the same quality product that the customers enjoy 3. Eliminate overburdening the employees (Example people come to Toyota to think not to work which mean everyone in the company needs to be a problem solver Everyone in the company should be thinking how to make there part of the company better so can they work a little less hard In the part world everyone will come to work and the job will be easy while the product is coming out perfect smooth with no variations and no waste. Lean is companywide management driven method for running entire business. Which means from the top management to the employees they need to be actively involved in learning about what waste, variations and overburdening are helping to eliminate them in the company. Everybody needs to be doing Lean on everyday bases which will result in going from the average to exceeding other companies. Because in reality must organizations aren't doing lean everyday they say we are busy or we always done it that way must break that mode and make continuous improvement in the daily operation the business will go through the routine

What is a target market? How does this correlate with the market niche?

Target Market: Group of people with similar wants and needs to whom you create a marketing mix to meet those needs (is a groups of people or places with similar wants and needs and desires with the potential of purchase of product)

What is the balance sheet equation? What is the equation discussing?

The basic accounting equation: Asset = liabilities (debt/borrowing) + Equity/Capital (which is the owner share of the assets) The equation will always balance in fact this is something will see on the balance sheet. On any balance sheet the asset will be equal to liabilities and equity.

What is the total quality management? How does TQM differs from Continuum quality Improvement (CQI)? What is TQM focus on? Provide an examples

Total Quality Management (is the big umbrella and then CQI falls under TQM) Total quality management (TQM) is the continual process of detecting and reducing or eliminating errors in manufacturing, streamlining supply chain management, improving the customer experience, and ensuring that employees are up to speed with training TQM focus on the individuals and CQI focus on the group T= looks like 1 this is for individuals Processes are refined with the goal of improving performance in response to customer needs and expectations this is why focus on one person (customer rather the organization) Umbrella term to describe the effort to improve quality Example: Projects put in place to improve product or service while decreasing cost Example: Taco bell - fact is what customers wanted! (Fast service, accurate orders, cleanness, temperature) In the beginning Taco Bell wasn't successful they will change their menu items and still wasn't seeing an increase. So they decided to do a TQM study and ask the customer what the customers wanted and they found out (Fast service, accurate orders, cleanness, temperature) So they found out the customers really didn't care about new food products monthly. So that is what they did and that's why they are so successful

What are Gantt charts? What is it used for?

Type of bar graph that shows the time it will take to complete a task/project (horizontal bars) It's tracking the project or task but it's not looking on how much the project is going to cost you. Inman states use brackets but they sometimes don't use brackets (so don't use as a key word) TT (in the name)= Brackets They want to see how well you are maintain the task or completing the tasks

What is the Lean process? How does this play a factor of quality control and improvement? Provide examples. How can videotaping and using stop watches can help with the lean process?

Uses less human effort, less space, less capital and less time to make products exactly as customers wants with less defects and in less time to make products exactly as the customers wants with few defects. Example reduce food cost and increase efficiency and customer satisfaction They can use videotaping and stop watches to capture work being done. Reorganize workflow, duties and practices Remember the more humans involve increase more human error Example: improve flow of the kitchen by putting videotaping to capture work and identify ways to operate more efficient to be able to increase productivity and reduce cost have to see the mistakes that are being made and the stopwatches are looking at the time being spent on a task remember the goal is to always reduce cost and increase productivity and provide a good product to customers

why utilities a semi variable cost?

Utilities (you pay them every month but sometimes the bill can be high or be lower depending on the sales or the business (depends on the units that are used) Example in the summer can be high with AC

What is value analysis? What does it determine? Provide an example.

Value analysis: It's a process of investigating all aspects of a service to discover and eliminate unnecessary cost without interfering with the effectiveness of the service. Consider that standards of quality vary and that price is just one factor to be considered. In food service it is the relationship between the price paid for the item and it usefulness. Example: if purchasing a software with nutritional analysis features but if you will only use it vary occasion a similar version may have been a better choice Example: With unpopular item how can it be altered so the value will be increase? Useful in make or buy an item decisions should we make or buy lasagna or whole pineapple vs canned pineapple. Is it worth it? What can you do to eliminate unnecessary cost? Example: Let's say you going to invest on blast chiller (use in ready prepared freezer things really fast and they are expensive) Is it worth it for you to buy that blast chiller are you going to use it for full potential is it increasing productivity and reducing cost over the long term of the company because if it's not you should not buy or invest in the major equipment.

Does a zero based budget means starting with zero dollars?

Zero base budget - doesn't mean start with 0 dollars Start with what you want to do (work up from the bottom) Then think about what you need and how much it costs to complete those activities Don't believe that last year's budget was appropriate (or opening a new business and don't have a budget) The Zero base budget is much more in depth and take more time to development

What is an audit?

format study that retrospectively monitors performance Way to document appropriate care patterns and for identifying areas needing improvement (did the performance meets the standards?)

Why is maintenance a semi variable cost and repair is a flexible cost?

maintenance (on the machines like clean the filters but if the filters have to be replace may cost a little more) this is why repairs is different from maintenance because a repair depends on the repair (this is why flexible because direct by sales because you don't know when the stove for example will get broken but you don't have to repair it every month) and maintenance can be flexible or fixed because you have to do maintenance on equipment regardless but the type of maintenance can varies depending on the sales (variable)

What is the performance budget? What does the performance budget focus on? What are some other names of performance budget?

summarizes program activities performed in terms of the cost of specified accomplishments It is the budget on the evaluation of the productivity of the different operations in an organization. What It cost to perform an activity Example how much it cost to supervise the cafeteria) Lumps sum of money giving to the manager this Looking at budget to see how much it's going to cost you to do an activity Example If you want to do a program you will set aside that money for that program (but can't go over that budget) Think of it like a mini budget in a big budget because you may have budget for year 30,000 but for the program the budget is 5000. Performance budgeting also called functional and activity budgeting