business midterm

• Production


  The creation of goods using land, labor, materials, capital, entrepreneurship, and knowledge (factors of production)
• Production Management


  All the activities managers engage in to help firms create goods
• Operations Management


  A specialized area in management that converts or transforms resources into goods and services; includes inventory management and quality control
• Objectives of Operations Management

  Provide high quality goods and services in response to customer demand; helps solve facility location, planning and purchasing
• Production Process


  Inputs: Land, Labor, Materials

  Production Control: Planning, Scheduling, Follow up

  Outputs: Goods, Services, Ideas
• Process Manufacturing


  The part of production that physically or chemically changes materials
• Assembly Process


  The part of production that puts together components
• Continuous Processes


  Long production runs turn out finished goods over time
• Intermittent Processes


  Production runs are short and the producer adjusts machines frequently to make different products
• Computer Aided Design (CAD)


  The use of computers in the design of products; expensive, cuts up to 80% of time to program machines to make parts
• Computer Aided Manufacturing (CAM)


  The use of computers in the manufacturing of products
• Mass Customization


  Tailoring products to meet the needs of a large number of individual customers
• Remote Work


  Working home via computer
• Modular Layout


  Teams produce more complex units of final product
• Assembly Line Layout


  Workers do only a few tasks at a time
• Fixed Position Layout


  Allows workers to congregate around product
• Purchasing


  Searches for high quality material resources, finds the best suppliers, negotiates best price for goods and services
• Just in Time (JIT)


  Production process in which a minimum of inventory is kept and parts, supplies, and other needs are delivered just in time to go to the assembly line
• Quality Control


  Consistently producing what the customer wants while reducing errors before and after delivery
• Six Sigma Quality


  Quality measures that allow only 3.4 defects per million opportunities
• Lean Manufacturing


  Using fewer resources compared to mass production; takes half the human effort, 1/3 of engineering effort, half the space, and 90% less inventory
• PERT (Program Evaluation and Review Technique)


  Method for analyzing the tasks involved in completing a given project and estimating the time needed
• Gantt Chart


  Bar graph of current projects and completion status
• Accounting


  Concepts represented by numbers; recording, classifying, summarizing, interpreting of financial events and transactions in an organization to provide interested parties needed financial info
• Accounting System

  Inputs: Accounting documents, Processing: Recording/Journaling, Outputs: Financial Statements
• Accounting Progression


  Analyze source documents, record transactions, transfer to ledger, take a trial balance, and prepare financial statements
• Managerial Accounting


  Provides info and analysis to managers inside the organization to assist them in decision making
• Financial Accounting


  Financial info and analysis generated primarily for people outside the organization
• Annual Report


  Yearly statement of how the financial condition, progress, and expectations of the firm
• Assets =


  Liabilities + Owner Equity
• Profit =


  Revenue - Expense (not the same as cash!!)
• Balance sheet


  Assets, Liabilities, Owners Equity; tells the story of working capital, investing, and financing
• Income sheet


  Story of transactions over a specific time period
• Revenue transactions


  Business and its customers
• Expense transactions


  Business and its suppliers (people, capital)
• Net income


  Profit (loss); difference between revenue and expense - if the firm gives it to owners = dividend to stockholders, if the firm reinvests the income = retained earnings
• Variable costs


  Costs of goods sold; the more you make, the greater the cost - labor/material used to make product, and cost of keeping inventory
• Fixed costs


  Operating expense; cost of being in business that month - selling expenses, administrative expenses
• Cash Flow Statement


  Movement of cash in and out of a firm over a period of time and how much cash is available
• Investing


  What you do with the money; acquire assets to run a firm, or renting money to others