Concepts of Throughput Accounting and Theory of Constraints

Financial Management

Kaizen – Understanding the Japanese Business Philosophy of Continuous Improvement

Operations Management

Role of Leaders in Shaping Organizational Culture

Management Principles

Organizational Culture – Development and Importance

Management Principles

Five Important Organizational Cultural Models

Management Principles

Efficiency of Material Handling Systems

The efficiency of material handling could be judged by the following principles: 1. “Equipment built for motion should be kept in motion; idle Equipment should be kept inexpensive”. 2.”Continuous material movement is most economical” This principle states that materials handling efficiency is Greatest when it approaches a steady flow of materials, in as straight as possible, with minimum interpretations and minimum backtracking and where movements approach continues rather than intermittent flow. It is not; always possible, in practice, to completely achieve the objective of this rule. However, it is the target towards which we Aim our thinking. Conveyors systems, both overhead and floor types, are excellent examples of the application of this idea. 3. “Materials’ handling economy is generally directly proportional to the size of load handled” We all recognize, however, that as the load size increases There is a point reached beyond which it becomes more costly, and less Continue reading

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Formulation of Linear Programming Problem

FORMULATION OF LINEAR PROGRAMMING PROBLEM (LPP): Formulation of a Linear Programming Problem involves constructing a mathematical model from the given data. This can be done only if the following requirements are met: There should be a clearly identifiable objective and it should be measurable in quantitative terms. E.g. In a manufacturing problem the objective can be maximisation of profit or minimisation of cost. The resources to be allocated in the problem should be identifiable and quantitatively measurable. E.g. The use of labour time, or raw material in the manufacturing process should be clearly stated. The relationships representing the objective function and the constraints equations must be linear. There should be a series of feasible alternative courses of action available to the decision maker. These are determined by the resource constraints. When all the above mentioned conditions are satisfied the problem can be expressed as L.P. problem. Then solve it for Continue reading

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Challenges Faced by International Advertising

International marketing can be a tricky business. With the increase in global trade, international companies cannot afford to make costly advertising mistakes if they want to be competitive and profitable. Understanding the language and culture of target markets in foreign countries is one of the keys to successful international advertising. Too many companies, however, have jumped into foreign markets with embarrassing results. Out of their blunders, a whole new industry of translation services has emerged. Faulty Translations The value of understanding the language of a country cannot he overestimated. Translation mistakes are at the heart of many blunders in international advertising. Since a language is more than the sum of its words, a literal, word-by-word dictionary translation seldom works. The following examples prove this point. Otis Engineering Company once displayed a poster at a trade show in Moscow that turned heads. Due to a poor translation of its message, the Continue reading

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Ethical Issues in Cost Allocation

A cost is generally understood to be that sacrifice incurred in an economic activity to achieve a specific objective, such as to consume, exchange, or produce. All types of organizations- businesses, not-for-profits, governmental- incur costs. To achieve missions and objectives, an organization acquires resources, transforms them in some manner, and delivers units of product or service to its customers or clients. Costs are incurred to perform these activities. For planning and control, decisions are made about areas such as pricing, program evaluation, product costing, outsourcing, and investment. Different costs are needed for different purposes. In each instance, costs are determined to help management make better decisions. When incurred, costs are initially reviewed and accumulated by some classification system. Costs with one or more characteristics in common may be accumulated into cost pools. Costs are then reassigned, differently for specified purposes, from these cost pools to one or more cost objects. Continue reading

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Differences Between Term and Permanent Life Insurance

Life insurance is an essential financial product with the life of the insured being the subject of protection. There are two types of life insurance: term and permanent. Term life insurance begins a low premium that increases upon renewal and pays a death benefit to the beneficiaries only if the insured dies within the policy term. On the other hand, permanent life insurance has a fixed premium and is designed to offer coverage for the insured’ s entire life. Both the insurance company will pay a death benefit to the designated beneficiary after the death of an insured. Although term and permanent life insurance behave as protections to ensure the beneficiary’s benefit, they have different features: convertibility, cost, and cash surrender value. For instance, term and permanent policy offer different periods of validity. Term life insurance provides guarantees for a limited set of years, generally between 10 to 30 years. Continue reading

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Relationship Between Financial Leverage and Risk

Not to be confused with operating leverage, financial leverage involves the use of debt in the firm’s financial structure. Though it may be operationally defined and measured in a variety of ways, it essentially entails the use of debt to extend the earning power of funds committed by the firm’s shareholders. When used properly financial leverage magnifies returns on committed funds. Because of the nature of financial leverage, it carries within it not only the general types of risk associated with operating leverage, but also two others that have rather specific implications. First, there is the risk of default-the inability to meet debt obligations as they come due. By definition, as financial leverage increases, cash flow requirements necessary to service additional debt increase as well. The risk of inadequate cash flow is, therefore, a primary concern in strategic decisions regarding financial structure. This, of course, suggests that liquidity and leverage Continue reading

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