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

Use of Logistics Channel and Public and Private Distribution Facilities – For Material Sources

Use of Logistics Channel The procurement cycle occurs at the manufacturer/supplier interface and includes all processes necessary to ensure that materials are available for manufacturing to occur according to schedule. During the procurement cycle, the manufacturer orders the components from suppliers that replenish the component inventories. The relationship is quite similar to that between a distributor and manufacturer, with one significant difference: whereas retailer or distributor orders are triggered by uncertain customer demand, component orders can be determined precisely once the manufacturer has decided what the production schedule will be. Component orders are dependent on the production schedule. Of course, if a supplier’s lead times are long, the supplier has to produce to forecast because the manufacturer’s production schedule may not be fixed that far in advance. In practice, there are several tiers of suppliers, each producing a component for the next tier. A similar cycle would then flow back Continue reading

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Special Drawing Rights (SDRs)

Special Drawing Rights (SDRs), also known as the paper gold, are a form of international reserves created by the International Monetary Fund (IMF) in 1969 to solve the problem of international liquidity. They are not paper notes or currency. They are international units of account in which the official account of the IMF are kept. Origin of  Special Drawing Rights Special Drawing Rights  were created through the First Amendment of the Fund Articles of Agreement in 1969 following persistent US deficits in balance of payments to solve the problem of liquidity. Until December 1971, an SDR was linked to 0.88867 gram of gold and was equivalent to US $1. With the break down of fixed parity system after 1973 when the US dollar and other major currencies were allowed to float, it was decided to stabilize the exchange value of the SDR. Accordingly, the value of SDR was calculated each Continue reading

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Indian Banking Sector Reforms: Asset Liability Management System

The critical role of managing risks has now come into the open, especially against the experience of the recent East Asian crisis, where markets fell precipitously because banks and corporate did not accurately measure the risk spread that should have been reflected in their lending activities. Nor did they manage such risks or provide for them in their balance sheets. In India, the Reserve Bank has recently issued comprehensive guidelines to banks for putting in place an Asset Liability Management System. The emergence of this concept can be traced to the mid 1970s in the US when deregulation of the interest rates compelled the banks to undertake active planning for the structure of the balance sheet. The uncertainty of interest rate movements gave rise to interest rate risk thereby causing banks to look for processes to manage their risk. In the wake of interest rate risk, came liquidity risk and Continue reading

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Product Line Pricing

Since almost every firm has several items in its product line, product line pricing becomes an important  phase of pricing policy. The problem of product line pricing is to find the proper relationship among the  prices of numbers of a product group. Product line pricing may refer to product group. Product line  pricing may refer to products physically the same but sold under different conditions. This gives the seller  an opportunity to charge different prices. Thus use differentials (e.g. hot coffee versus cold/iced coffee),  seasonal differentials (e.g. night fights or night telephone calls), and style cycles differentials are all  phases of product line pricing. The rationale for this heterodox approach to pricing is that the essential  economic features of the product line is the cross-elasticity of demand that exist among parts of the  seller’s output. General Approach to Product Line Pricing The underlying principle in product-line pricing is that demand Continue reading

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Key Elements of Strategic Management

Strategic management is defined as a process of specifying the objectives of the organization, developing policies and planning to achieve the objectives, and then allocating resources so that plans can be implemented. Strategic management is considered to be the highest level of managerial activity that the top management of the organization performs and also the executive team. Strategic management normally provides the overall direction of the entire organization. Strategic management is a set of actions and decisions that result to the formulation and implementation of approaches designed to achieve the objectives of the organization. This is a continuous process that is normally involved with the attempt of matching the organization with the changing environment in a manner that is advantageous. Strategic management is extremely critical in the survival of the organization. Elements of Strategic Management Organizations are supposed to select the directions in which it will move towards. Strategic management Continue reading

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Line Balancing in Production Management

A production line is typically associated with continuous or flow production  system. Production lines are particularly appropriate for high volume operations. In a  production line work is divided into individual tasks and assigned to consecutive  workstations on the line. In mass production on progressive assembly line the workload  between various machines or workstations should be balanced. The need for balancing  the line becomes obvious when it is considered that the output to be received from the  line is determined by the maximum time involved in the performance of work at one  particular workstation. The imbalances existing in the line would lead to wastage of  time at all other work stations when one work station holds up the total output rate.  Therefore, it is necessary to level out or balance the cycle times at each workstation. Line balancing refers to the apportionment of sequential work activities into  workstations in order to Continue reading

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