Term
| Three Factors of Production |
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Definition
1) Raw materials or natural resources
2) Tools and machinery, and;
3) Labor or human resources |
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Term
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Definition
| A study of distributing resources for the production of goods and services within a social system |
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Term
| Capitalist or Private Enterprise System |
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Definition
| Individual citizens own and operate the majority of businesses and the market determines the distribution of resources |
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Definition
| The quantity of goods and services that consumers are willing to buy at different prices |
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| The quantity of goods and services that businesses are willing to provide at those prices |
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Term
| Private enterprise system requires the existence of four conditons |
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Definition
1) Private property;
2) Freedom of choice;
3) The right to keep profits, and;
4) An environment where fair competition can occur. |
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Term
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Definition
| Any mechanism that facilitates the exchange of goods and services between buyers and sellers |
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| A measure of how broadly or narrowly defined the range of included activites are; Creates an opportunity for greater efficiency and increased productivity. |
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| Having a lack of knowledge of what will happen--the unpredicatability about the consequences of your choice--in a decision situation |
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| The money spent implementing the decision |
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Term
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| The cost of what you gave up doing when you committed to the course of action you chose |
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Term
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| An organization or individual that seeks a profit by providing products that satisfy people's needs (or wants) |
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| A good, service, or idea that has both tangible and intangible characteristics that provide the satisfaction or benefits |
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Definition
| The basic goal of business and is the difference between what it costs to make and sell a product and what the customer pays for it |
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Definition
| Groups of people who have a vested interest ("stake") in the actions a business takes; Four major groups: owners, employees, customers, and citizens |
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Term
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Definition
| The activities designed to provide goods and services that satisfy customers; Include market research, development of products, pricing, promotion, & distribution |
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Definition
| The process that tracks, summarizes, and analyzes a firm's financial postition |
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Definition
| The activities and processes used in making products; Involve designing the production process and the efficient management and operation of those processes |
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Definition
| The activites concerned with funding a business and using resources effectively |
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Term
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Definition
| Determining what the organization needs to do and how to get it done |
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Term
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Definition
| Arranging the organiztion's resources and activites in such a way as to make it possible to accomplish the plan |
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Definition
| Enacting the plan, including guiding and motivating employees to work toward accomplishing the necessary tasks |
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Definition
| Measuring and comparing performance to expectations established in the planning process, and adjusting either the performance or the plan |
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Term
| Research & Development (R&D) |
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Definition
| Designs your product line; the department needs to invent and revise products that appeal to your customers' changing needs |
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Term
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Definition
| Department prices and promotes your products; interacts with your customers via its sales force and distribution system; also responsible for sales forecasts |
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Definition
| Department determines how many unites will be manufactured during the year. Is also responsible for buying and selling production lines |
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Term
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Definition
| Department makes sure your company has the financial resources it needs to run throught the year. The department can raise money via one-year bank notes, 10-year bonds or stock issues |
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Definition
| R&D works with Marketing to make sure products meet customer expectations |
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Term
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Definition
| R&D works with Production to ensure assembly lines are purchased for new products. If Production discontinues a product, it should notify R&D. |
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Term
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Definition
| Works with Production to make sure manufacturing quantities are in line with forecasts; market growth projections also help Production determine appropriate levels of capacity. If Marketing wants to discontinue a product, it tells Production to sell the product's production line. |
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Definition
| Works with Finance to project revenues for each product and to set the Accounts Receivable policy, which is the amount of time customers can take to pay for their purchases |
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Term
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Definition
Production tells Finance if it needs money for additional equipment.
If Finance cannot raise enough money, it can tell Production to scale
back its requests or perhaps sell idle capacity |
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Term
| Finance and All Departments |
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Definition
The Finance Department acts as a watchdog over company
expenditures. Finance should review Marketing and Production
decisions. Finance should cross-check Marketing’s forecasts and
pricing. Are forecasts too high or too low? Will customers be willing
to pay the prices Marketing has set? Is Production manufacturing
too many or too few units? Does Production need additional
capacity? Has Production considered lowering labor costs by
purchasing automation? |
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Term
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Definition
| To determine the needs of its customers |
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Term
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Definition
| To determine how to satisfy those needs through addressing product, price, place, promotion, and service |
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Term
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Definition
| To analyze its competitive advantages, plans, and actions |
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Term
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Definition
| To select specific markets to serve |
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Term
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Definition
| Focusing on understanding the needs of customers in a particular geographic area |
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Term
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Definition
| Focusing on the attributes of the market based upon gender, age, income, education, or other measurable factors |
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Term
| Psychographic Segmentation |
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Definition
| Identifying and promoting to groups of people based on lifestyle and behaviors that are most likely to buy the product. This may be based on interests, fears, behaviors, or actions that can be categorized into groups |
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Term
| Diminishing Return/Rate of Diminishing Return |
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Definition
| States that adding additional investment beyond a certain threshold will not add proportional returns |
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Term
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Definition
| Helps managers plan, operate, and control a company's activities; provides vital information about a company to internal users |
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Term
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Definition
| Provide a source of information about the company's performance; Gives information about a company to external users |
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Term
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Definition
| Summarizes its financial position on a given date; lists the company's assets, liabilities, and owner's equity; like a snapshot or where the company's wealth is at a given point in time; also called a statement of financial position |
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Term
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Definition
| The economic resources that a company owns and that it expects will provide future benefits to the company; Anything owned or under the direct control of a company is an asset |
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Term
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Definition
| The company's economic obligations (debts) to its creditors, including people outside the company, such as banks and suppliers, as well as the employees within the company. Anything that is owed by a firm is a liability |
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Term
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Definition
| The owner's current investment in the assets of the company includes the owner's original contribution to the company and any earnings (net income) that the owner leaves in the company; also called the stockholders' equity |
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Term
| Basic accounting equation/Balance sheet identity |
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Definition
| Assets = Liabilities + Owner's Equity |
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Term
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Definition
| Assets that can (will be) converted to cash within the year |
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Term
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Definition
| The amount your customers owe because they purchased from you on credit |
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Term
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Definition
| Assets that have a long-term use or value, including land, building, and equipment |
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Term
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Definition
| How much of the value of your plant and equipment you have used up while operating your business over time |
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Term
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Definition
| The loans that have to be paid back within a year |
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Term
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Definition
| The amount that you owe your suppliers for materials (inventory) that you purchased on credit |
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Term
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Definition
| The loans (part of a long-term loan) to be paid back this year |
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Term
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Definition
| The loans (or debt contracts) that you have to be paid back at some point in the future (in more than a year's time) |
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Term
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Definition
| Purchased materials or component parts to create the product you make |
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Term
| Work-in-process inventory |
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Definition
| When you are in the middle of producing or assembling a product for sale at any point in time, materials and labor committed to creating that product |
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Term
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Definition
| These are the finished products you have on hand, ready for sale |
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Definition
| Amount that owners reinvest back into the company |
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Term
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Definition
| Make payments out of profits |
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Term
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Definition
| The value of that asset on the balance sheet or the "books" of the company; Book Value = Owner's Equity / Number of Shares Outstanding |
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Term
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Definition
| The total of the prices charged to a company's customers for the goods or services the company provides to them |
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Term
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Definition
| The costs of providing the goods or services |
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Term
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Definition
| The excess of revenues over expenses, or the company's profit; a net loss arises when expenses are greater than revenues |
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Term
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Definition
| Description of the activity in transactions that affect the retained earnings account; tells a story about the activity of a company over a period of time |
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Term
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Definition
| Funds that come into the company from the sale of goods or services; can be sales that are in cash or on-account |
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Term
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Definition
| Costs that vary with the level of activity--the more products you make, the greater the total cost; made up of material costs, labor costs, & inventory carrying costs |
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Term
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Definition
| The cost of the materials (raw material & component parts) that are used in the products you sold |
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Term
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Definition
| The cost of the labor (human resources) used to produce the products sold |
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Term
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Definition
| The difference between the revenue brought in by sales and the cost of making the products for sale; the difference is what is left over to operate your business and as profit |
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Term
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Definition
| Costs that are fixed over a period of time; do not vary with the level of activity |
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Term
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Definition
| Revenues minus variable costs minus period costs minus interest expenses and taxes; synonymous with profit, earnings, "return", and "bottom line" |
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Term
| Three Basic Aspects to the Production Process |
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Definition
1) Quantity of the commodity produced;
2) Form of the good produced'
3) Temporal and spatial distribution of the commodity produced |
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Definition
| Employees and their skills involved in the production process |
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Term
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Definition
| The annual production capabilities of the facilities, technology, machinery, and equipment |
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Term
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Definition
| Occurs when the cost of each good produced decreases as the volume produced increases |
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Term
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Definition
| The act of monitoring and improving the quality of products and services produced |
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Term
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Definition
| Another quality-improvement technique; describes a method of evaluating performance by comparison with another specified level achieved by another entity |
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Term
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Definition
Each product’s promotion budget determines its level of awareness. A
product’s awareness percentage reflects the number of customers
who know about the product. An awareness of 50% indicates half of
the potential customers know it exists. From one year to the next, a
third (33%) of those who knew about a product forget about it.
Last Year’s Awareness - (33% × Last Year’s Awareness) =
Starting Awareness |
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Term
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Definition
First-shift capacity is defined as the number of units that can be
produced on an assembly line in a single year with a daily eight-hour
shift. An assembly line can produce up to twice its first-shift capacity
with a second shift. |
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Term
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Definition
As automation levels increase, the number of labor hours required to
produce each unit falls. The lowest automation rating is 1.0; the
highest rating is 10.0.
At an automation rating of 1.0, labor costs are highest. Each
additional point of automation decreases labor costs approximately
10%. At a rating of 10.0, labor costs fall about 90%. |
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Term
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Definition
| Is determined by the Marketing Department's promotion budget--the higher the budget, the higher the awareness. |
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Term
| December Customer Survey Score |
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Definition
| Indicates how customers in the segment perceived the products. The survey evaluates the product against the buying criteria |
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