Principles Of Mgmt Exam 3

Front 1

Break-Even Analysis

Back 1

Process of generating information that summarizes various levels of profit or loss associated with various levels of production.

Front 2

Basic Ingredients of Break-Even Analysis

Back 2

1. Fixed costs
2. Variable costs
3. Total costs
4. Total revenue
5. Profits

Front 3

Fixed costs

(Basic Ingredients of Break-Even Analysis)

Back 3

Expenses incurred by the organization regardless of the number of products produced.

Some examples are real estate taxes, upkeep to the exterior of a business building, and interest expenses on money borrowed to finance the purchase of equipment.

Front 4

Variable costs

(Basic Ingredients of Break-Even Analysis)

Back 4

Expenses that fluctuate within the number of products produced.

Examples are costs of packaging a product, costs of materials needed to make the product, and costs associated with packing products to prepare them for shipping.

Front 5

Total costs

(Basic Ingredients of Break-Even Analysis)

Back 5

The sum of the fixed and variable costs associated with production.

Front 6

Total revenue

(Basic Ingredients of Break-Even Analysis)

Back 6

All sale dollars accumulated from selling manufactured products or services. Naturally, total revenue increases as more products are sold.

Front 7

Profits

(Basic Ingredients of Break-Even Analysis)

Back 7

The amount of total revenue that exceeds the total costs of producing the products sold.

Front 8

Shop-floor control activities

Back 8

Include input/output control, scheduling, sequencing, routing, dispatching, and expediting.

Front 9

Inventory control activities

Back 9

Ensure the continuous availability of purchased materials.

Front 10

Inventory control

Back 10

Specifies what, when, and how much to buy

Front 11

Inventory control subsystems

Back 11

Work-in-process and finished-goods inventory

Front 12

Materials control

Back 12

operations control activity that determines the flow of materials from vendors through an operations system to customers.

Front 13

Potential Pitfalls of Budgets

Back 13

1. Placing too much emphasis on relatively insignificant organizational expenses.
2. Increasing budgeted expenses year after year without adequate information.
3. Ignoring the fact that budgets must be changed periodically.

Front 14

variable budget

Back 14

also known as a flexible budget, outlines the levels of resources to be allocated for each organizational activity according to the level of production within the organization.

Front 15

Zero-base budgeting

Back 15

Planning and budgeting process that requires managers to justify their entire budget request in detail rather than simply referring to budget amounts established in previous years.

Front 16

budget

Back 16

Financial plan outlining how funds in a given period will be obtained and spent.

Front 17

Budgetary control

Back 17

Ensuring that income and expenses occur as planned.

Front 18

Successful Characteristics of JIT (Just In Time) Programs

Back 18

1) Closeness of suppliers.

2) High quality of materials purchased from suppliers.

3) Well-organized receiving and handling of materials purchased from suppliers

4)Strong management commitment

Front 19

Layout Strategy

Back 19

Plan of action that outlines the location and flow of all organizational resources around, into, and within production and service facilities.

Usually last part of the operations strategy to be formulated.

Front 20

Layout

Back 20

Overall arrangement of equipment, work areas, service areas, and storage areas within a facility that produces goods or provides services.

Front 21

Three basic types of layouts

Back 21

1. Product layout
2. Process (functional) layout
3. Fixed-position layout

Front 22

Product Layout

Back 22

Designed to accommodate high production volumes, highly specialized equipment, and narrow employee skills.

Front 23

Process (functional) Layout

Back 23

Layout Pattern that groups together similar types of equipment. Good for organizations with a large number of different tasks.

Front 24

Fixed-position layout

Back 24

One in which the product is stationary while resources flow. Appropriate for organizations involved in a large number of different tasks that require low volumes, multipurpose equipment, and broad employee skills. Large products.

Front 25

Location strategy

Back 25

Plan of action that provides the organization with the competitive location for its headquarters, manufacturing, services, and distribution activities.

Front 26

Types of processes

Back 26

1) Continuous process
2) repetitive process
3) job-shop process

Front 27

Continuous Process

Back 27

Product-oriented, high volume, low-variety process used.

ex: producing chemicals, beer, and petroleum products.

Front 28

Repetitive Process

Back 28

Product-oriented production process that uses modules to produce items in large lots.

ex: mass production - auto industry

Front 29

Job-shop Process

Back 29

Used to produce small lots of custom designed products such as furniture. High variety, low volume system.

ex: spaceship and weapon systems production.

Front 30

Capacity Strategy

Back 30

Plan of action aimed at providing the organization with the right facilities to produce the needed output at the right time.

Front 31

Operations Management

Back 31

Performance of managerial activities entailed in selecting, designing, operating, controlling, and updating production systems.

Front 32

Automation

Back 32

The replacement of human effort by electromechanical devices in such operations as welding, materials handling, design, drafting, and decision making.

Front 33

Production

Back 33

The transformation or organizational resources into products.

Front 34

Productivity

Back 34

Relationship between the total amount of goods or services being produced (output) and the organizational resources needed to produce them (input)

input -> transformations -> output

Front 35

Transformational strategies for increasing productivity

Back 35

1. Improving the effectiveness of the organizational workforce through training.

2. Improving the production process through automation.

3. Improving product design to make products easier to assemble.

4. Improving the production facility by purchasing more modern equipment.

5. Improving the quality of workers hired to fill open positions.

Front 36

transformation

Back 36

Set of steps necessary to change organizational resources into products.

Front 37

Four Ratios

Back 37

1. Profitability
2. Liquidity
3. Activity
4. Leverage

Front 38

Profitability

Back 38

ex: Return on investment

Productivity of assests

Front 39

Liquidity

Back 39

ex: Current Ratio

Short term solvency / How fast it turns into cash

Front 40

Activity

Back 40

ex: Inventory Turnover

Efficiency of inventory management

Front 41

Leverage

Back 41

ex: Debt Ratio

How a company finances itself