BA 101 > Midterm 2 > Flashcards

Midterm 2 Flashcards

(80 cards)

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1
Q

Operations Management

A

Converts resources into goods and services
Includes: Inventory management, quality control, production scheduling & follow-up services

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2
Q

Types of Production Operations

A

Process manufacturing (part of production that physically or chemically changes materials) & Assembly (Puts together components)

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3
Q

Operations Management Goal

A

Provide high quality goods in response to demand

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4
Q

Computer-Aided Design

A

Using computer to design products

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5
Q

Computer-Aided Manufacturing

A

Using computers to make the product/manufacturing

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6
Q

Computer-Integrated Manufacturing

A

Combines CAD & CAM

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7
Q

Mass Customization

A

Tailoring products to meet the needs of a large # of people

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8
Q

Operation Management Solves:

A

Facility location, facility layout, materials & inventory control

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9
Q

Different types of facility layouts

A

Modular, assembly line & fixed position

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10
Q

Just-In-Time Inventory Control

A

Minimum inventory is kept while needs are delivered

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11
Q

Six-sigma Quality

A

Quality measure that allows 3.4 defects per million

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12
Q

Lean Manufacturing

A

Using fewer resources compared to mass production

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13
Q

PERT

A

Program, evaluation & review technique
Method for analyzing the tasks involved in completing a project and estimating the time needed

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14
Q

Accounting

A

Recording, classifying, summarizing, interpreting of financial events in an organization to provide interested parties needed information

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15
Q

Parties interested in Accounting Information

A

Employees, business owners, creditors, unions, investors, gov.

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16
Q

Accounting System

A

Inputs (documents) -> Processing -> Outputs (Balance sheet)

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17
Q

Managerial Accounting

A

Providing financial information for people in business to help with decision making
Ex: Costs of production, cost of marketing, controlling budgets, minimizing tax liabilities

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18
Q

Financial Accounting

A

Financial information for people outside of business like investors
Ex: How much debt, able to pay bills, profitable?

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19
Q

Accounting Equation

A

ASSETS = LIABILITIES + OWNER’S EQUITY

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20
Q

Profit Equation

A

PROFIT = REVENUE - EXPENSES

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21
Q

Key Financial Statements

A

Balance sheet, income statement, cash flow statement

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22
Q

Balance Sheet

A

Contains Assets, liabilities and owner’s equity

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23
Q

Current Assets

A

Resources that can be converted to cash within a year

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24
Q

Fixed Assets

A

Long-term resources used for operation

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25
Liabilities
What a company owes
26
Owner's Equity
Original Investment or profit put back in
27
Common Size
Each item as a percent of total assets (makes it easier to compare firms of different sizes)
28
Income Statement
Transactions over a period of time
29
Variable Costs
Cost of goods sold (cost of keeping inventory, labor & materials)
30
Fixed Costs
Operating Expenses (Building factory rent)
31
Dividend
What a business chooses to pay its shareholders
32
Cash Flow
Movement of cash in and out of a firm over a period of time
33
Purpose of cash flow
Tells how much $ is available for use in a given period of time
34
Cash Flow Statement
Reconciles net profit back to cash
35
Cash Flow Circle
Cash -> Production -> Inventory -> Sales -> Cash
36
Benefits of Balance Sheet
Tells working capital (cash, accounts payable/recievable, inventory and debt), investing (plant and equipment, depreciation) and financing (total liabilities and total equity
37
Debt Financing
Borrow money from the market - bonds
38
Equity Financing
Taking on new owners
39
Bonds
Form of long-term debt for a firm
40
Production
The creation of goods using land, labor, materials, capital, etc.
41
Continuous vs. Intermittent Processes
Continuous: Long production turns out finished goods over time Intermittent: Production runs are short and the producer adjusts machines frequently to make different products
42
Nanomanufacturing
Manipulate material on the molecular level
43
PERT Steps
1. Analyzing and sequencing tasks 2. Estimating time needed to complete each task 3. Draw PERT network of first two steps 4. Identify critical path (Sequence of tasks that takes the longest to complete)
44
GANTT Chart
Bar graph of current projects and completion status
45
Accounting Progression
Analyze source documents -> Record transactions in journal -> Transfer journal entries to ledger -> Take a trial balance -> Prepare financial statements -> Analyze financial statements
46
Contribution Margin (Gross Margin)
Measures the efficiency of your production process Sales - Variable Costs
47
Operating Profit
Profit from running the business before paying interest and taxes Sales - All costs
48
Net Profit (Bottom Line, Net Income)
Amount of money left after paying all expenses including taxes and interest
49
Whose money is the net profit for?
Could be dividend to stockholders Income to partners/owner Retained earnings if reinvested
50
Primary Markets
Firm sells new issues of stock publicly for the first time to investment bankers
51
Secondary Markets
Owners trade previously issued shares of stock and bonds
52
Owner's Rights: Stock
You give the firm money (buying stock) Now own a piece of the firm Benefit when stock price increases Benefit when firm issues dividend
53
Book Value
Owner's Equity / # of shares
54
Earnings Per Share
Net income / Number of shares
55
Yield
Dividend / Price
56
Financial Ratios
Current Ratio Quick Acid Ratio Debt-Assets Ratio
57
Current Ratio
Assets / Liabilities (Tells ability to pay with assets)
58
Quick/Acid Ratio
(Assets - Inventory) / Liabilities Tells ability to pay with most liquid assets
59
Debt-Equity Ratio
Total Debt / Total Owner's Equity Compares financial leverage
60
Time Value of Money
Take the lump sum because you can invest it and grow more $
61
Leverage Ratios
Evaluate a firm's debt Most common ratio is debt-equity
62
Money
Anything people accept as payment for goods and services
63
Interest
The cost of borrowing money, typically a percent of the principal amount
64
Standards for Useful Money
Portability, divisibility, stability, durability and uniqueness
65
Falling Dollar Value
Amount of foreign goods/services you can buy with $1 DECREASES
66
Rising Dollar Value
Amount of foreign goods/services you can buy with $1 INCREASES
67
Impact of Falling Dollar
Tourism increases: Good for hotels, resorts, theme parks Overseas demand for US products rise Favorable exchange rate of US firms increases profits in foreign markets
68
Impacts of Rising Dollar
Tourism decreases: Bad for hotels, etc Overseas demand for US products decrease Unfavorable exchange rate of US firms decreases profits in foreign markets Problems for world that must purchase dollars for basic goods like food and energy
69
Inflation
Too much money chasing too few goods
70
Deflation
Price decreases because too many goods for too few dollars
71
Money Supply
Amount of money the Federal Reserve Bank makes available for people to buy goods and services
72
Reserve Requirement
Percentage of banks checking and savings accounts that must be physically kept in the bank
73
Open-Market Operations
Buying and selling of US government bonds by the Fed with the goal of regulating the money supply
74
Discount Rate
Interest rate that Fed charges for loans to member banks
75
Federal Reserves Dual Mandate
Maintain maximum employment while keeping prices stable
76
Inflation (Now)
COVID-19 spiked unemployment, risking recession Feds response was to slash discount rates
77
Inflation (70's)
Oil shortages spiked oil prices Low rates and high spending drove inflation Fed waited to long to raise hikes so inflation worsened High rates after led to recession and job losses
78
Inflation (2022)
Federal reserve increased rates at the fastest it ever has to combat a 8% interest rate Housing market was most quickly affected
79
Banking Crisis of 2008
Federal Reserve kept cost of borrowing too low Banks divided mortgages up and sold mortgage-backed securities Fed and SEC failed to issue proper warnings
80
Impacts of 2008 Banking Crisis
Sharp decline in home values because people were paying more for mortgages than the homes' value People stopped paying loans on homes Banks foreclosed on homes
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