BA 101 CH 1-4 – Flashcards
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free market/capitalism
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all aspects are based on supply and demand in market, government encourages free and fair competition
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requirements for free market
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private property, freedom of choice, fair competition, and right to keep benefits
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factors of production
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raw materials, tools/equipment, and labor
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two types of cost
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economic cost and opportunity cost
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marketing
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provide goods/services that satisfy customers, creating customer value
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accounting
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tracks, summarizes, and analyzes financial position
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production
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making products
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finance
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funding and using resource efficiently
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a market
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group of people who have similar needs, similar buying characteristics, and the ability to purchase
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four P's
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product, price, placement, and promotion
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results of competition between suppliers
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lower prices, newer/better products, and more efficient processes
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manager's four functions
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planning, organizing, leading/directing, and controlling
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market research
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determine needs of customer by gathering, recording, and analyzing data about consumers' likes, dislikes, and behaviors
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market mix
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determine how to satisfy those needs (4 P's+service)
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market strategy
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analyze its competitive advantages, plans, and actions to find the target market
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target marketing
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select specific markets to serve
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law of diminishing returns
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after a certain point spending money will result in a lower return per dollar
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consumer behavior
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process in choosing a product and how they use/dispose of it
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research and development
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invents new products and changes existing ones (repositions on perceptual map)
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R&D addresses...
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positioning of product in market segment on the perceptual map, # of products in each segment, age of products, and MTBF rating
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Customer Survey Score criteria
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product positing (performance/size), MTBF, price, age, awareness, accessibility, and accounts receivable policy
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product revisions/changes affect on age
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divide age by 2
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promotion budget creates
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awareness
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sales budget creates
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accessibility
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market growth estimate
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- for entire market = # of units sold x (1+growth rate) - for your product = # of yours units sold x (1+growth rate)
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seller market
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demand > sales, raise prices above range
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buyers market
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demand <= sales, lower prices to attract
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market share estimate
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calculate demand for next year --> multiply demand by actual/potential % share
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counting products method
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# of products in segment/ # of competitors = amount for each competitor to sell
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December customer survey score method
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add up DCS scores for all products --> divide your DCS by the total to get % --> multiply DCS share by next years total demand
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management accounting
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provide info that enables inside managers to make more informed and effective decisions on planning, operating, and controlling a company's activities
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financial accounting
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identifying, measuring, recording, accumulating, and communicating economic info about company for external users to analyze
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three key management accounting reports
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budgets, cost analysis, and manufacturing cost reports
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balance sheet
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"snap shot" on a given date, assets=liabilities+equity
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income statement
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results of operating activities over a period of time, tracks revenues and expenses
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cash flow statement
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do we have enough cash to answer financial obligations when due?
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retained earnings
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re-invested by owners
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common stock
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initial "paid in" by owners
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economies of scale
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when the cost of each good produced decreases as the volume produced increases
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just-in-time inventory
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reduces carrying costs
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supply chain management
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plan (manage resources needed), source (selection of suppliers), make (manufacturing steps), deliver (getting products/services through channel), return (return policy for customers)
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how to estimate production
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the most you should produce: take lowest forecast and add 2 months worth of sales the least you should produce: take highest forecast and add one unit -find number between range -subtract units already in inventory
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inventory requirements
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minimum = one unit maximum = 2 months of production
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as size of the product increases...
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material costs decrease
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# of total units able to produce =
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2 x capacity
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adding capacity formula
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(units x $6)+($4 x automation level x units)
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to calculate the value of a company
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# of outstanding shares x stock price
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Total Quality Management (TQM)
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improve product and production techniques
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TQM objectives
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- educate/train employees - encourage increased responsibility - discover production improvements
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complement
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# of workers - needed complement is the # of workers required to fill first shift without overtime
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caliber
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talent of workforce - more $ spent, the better quality workers
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training
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investment of time - each hour costs $20 and takes people off of the job
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Q: Sales forecasting is often challenging due to
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A: many unpredictable variables that influence decisions of your market customers
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Q: Primary focus of a business
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A: create wealth for owners
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Q: One attribute in competing in a private enterprise is that competitors are motivated to offer customers
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A: value
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Q: ____ determines what the organization needs to do and how to get it done.
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A: planning
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Q: Organizing may be described as
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A: arranging the organization's resources and activities in a way so that it is possible to accomplish the plan
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Q: Which business activity requires funding the business and using its resources effectively?
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A: finance
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Q: A free market system is also known as
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A: private enterprise/capitalism
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Q: Individual's self-interest promotes
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A: value, competition, and innovation
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Q: A change in mean time before failure MTBF has what effect on the age of the product?
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A: it has no effect on the age of the product
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Q: Price, place, promotion, and product are all aspects of what?
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A: marketing
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Q: Efficient means
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A: doing the things right
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Q: Distribution is best described as
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A: getting product to a place where customers can get it
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Q: Marketing strategy is most successful when it has
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A: customer orientation
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Q: In a capitalist market, individual citizens own and operate the majority of businesses and the ____ determines the distribution resources.
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A: market
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Q: The principal elements of economics include
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A: price, supply, and demand
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Q: What process allows managers to manage in an uncertain and risky environment?
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A: managing
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Q: How would you describe the concept of scarcity?
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A: our wants are greater than the resources available to satisfy them
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Q: What is the 5th aspect of marketing strategy?
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A: service
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Q: Debts of the business that will be repaid within one year are
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A: current liabilities
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Q: The ____ statement that includes assets, liabilities, and equity
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A: balance sheet
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Q: In Foundation variable costs are
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A: costs involving in producing the product
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Q: Adam Smith's invisible hand is
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A: a driving force that causes competition due to self interest and includes moral empathy towards others
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Q: What is a market?
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A: any mechanism that facilitates exchange of goods and services between buyers and sellers.
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Q: Primary market research is
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A: Conducting direct research with existing and potential customers
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Q: The private enterprise system requires the existence of four conditions including
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A: private property, freedom of choice, fair competition, and right to keep profits
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Q: Market segmentation identifies customers on the basis of their needs regarding
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A: geography, demographics, and psychographics
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Q: What is market segmentation?
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A: identifying and grouping potential customers by geographic, demographic, and psychographic attributes according to common characteristics and needs
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Q: In a command economy the governments job is to
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A: control what goods/services are produced , their quantity, and the prices (gov controls economy)
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Q: Measuring performance, comparing outcomes to the established plan, and adjusting for future success is
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A: controlling
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Q: The perceptual map evaluates and compares
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A: the position of products
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Q: What will change a products' position on the perceptual map?
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A: a change in size and performance
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Q: In Foundation which market segment is more sensitive to product position and less sensitive to price?
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A: high tech
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Q: The information presented in the income statement could be presented by this equation
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A: sales (revenue) = price per unit x units sold
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Q: Which of the following best describes the term retained earnings?
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A: profits reinvested in the business
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Q: The accounting system generates info about
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A: operating the business
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Q: What is the difference between contribution margin and gross margin?
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A: gross margin includes depreciation expense
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Q: What are examples of current assets?
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A: cash, accounts receivable, and invetory
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Q: What helps managers plan, operate, and manage a company's activities?
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A: management accounting
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Q: Financial document that shows revenues, expenses, and profits over a period of time is
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A: income statement
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Q: The two major classifications of those who have claims against affirms assets are
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A: The stockholders and those associated with the company's liabilities.
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Q: Contribution margin is calculated by
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A: total revenue - variable costs
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Q: The terms of a loan state that this debt must be paid back within the next 10 months. Therefore it is a
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A: current liability
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Q: Owner's equity account includes owners' investment and
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A: retained earnings
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Q: Capacity involves
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A: the ability of your machinery to produce a specified quantity of product each year
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Q: The collection of production partners such as manufactures,whole -salers, distributers, retailers, and online sales sites is referred to as
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A: the supply chain
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Q: The cost associated with the remaining number of products in inventory (stored in the warehouse) at the end of the year are
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A: carrying costs
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Q: In foundation what decisions can you make to improve your contribution margin without having a negative impact on the number of units you sell
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A: increase automation
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Q: In foundation what decisions can you make to increase your contribution margin?
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A: all of the above
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Q: Raw materials involve
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A: cost of goods to create produce
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Q: TQM expenditures beyond ____ over 2 or 3 years on a particular initiative push well into _____.
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A: 2 million dollars and diminishing returns
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Q: Investing in benchmarking will reduce
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A: Administration overhead
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Q: If you spend too much or too little ($) the returns in TQM may be modest
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A: True
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Q: The number of workers in the workforce is referred to as
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A: complement
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Q: In the broadest sense, TQM enables companies to improve
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A: efficiently and productivity
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Q: How is increasing the Account Receivable lag an investment in your company?
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A: form of promotion and will attract customers because they may have longer time frame before they need to pay you compared to your competitors
