Free Essay

Business Management

In: Business and Management

Submitted By tovinay
Words 3357
Pages 14
Chapter 3: Process flow measures

3.3 Solutions to the Chapter Questions

Discussion Question 3.1

The opposite of looking at average is looking at a specific flow unit’s flow time, and the inventory status and instantaneous flow rate at a specific point in time. Because flow times change from flow unit to flow unit, it is better to look at the average over all flow units during a period of time. Similar for inventory and throughput.
[pic]

Discussion Question 3.2

In practice, one often tracks inventory status periodically (each day, week, or month). Flow rate is typically also tracked periodically (even more frequently than inventory status because it directly relates to sales). It then is easy to calculate the average of those numbers to obtain average inventory and throughput during a period.

In contrast, few companies track the flow time of each flow unit, which must be done to calculate the average flow time (over all flow units during a given period).
[pic]

Discussion Question 3.3

First, draw a process flow chart.
Second, calculate all operational flows: throughput, inventory, and flow time for each activity.
Third, calculate the financial flow associated with each activity. If the activity incurs a cost (or earns a revenue), the cost or revenue rate is simply the throughput times the unit cost or revenue. If the inventory incurs a holding cost, the inventory cost rate is simply the average inventory times the unit holding cost.
Fourth, summing all revenue rates and deducting all cost rates yields the profit rate, directly broken down in terms of the relevant throughputs and inventory numbers. The latter thus are the minimal set of operational measures to predict financial performance.
[pic]

Discussion Question 3.4

For the department of tax regulations we have Average inventory I = 588 projects, Throughput R = 300 projects/yr (we assume a stable system).
Thus,
Average flow time T = I / R = 588 / 300 = 1.96 yr.
This is larger than six months. So we should disagree with the department head's statement.

[pic]

Discussion Question 3.5

If GM and Toyota have same turns, and we know that turns = 1/flow time = 1/T, it follows that their average flow times are the same. We also know that Toyota's throughput is twice that of GM. Thus, from I=RT it follows that Toyota has twice the inventory of GM. Thus, the statements are inconsistent, both companies have the same flowtime but Toyota has higher inventory than GM.
[pic]

Discussion Question 3.6

Yes, low inventories means few flow units are held in the buffer. In contrast, fast inventory turns means short flow times; i.e., flow units do not spend a long time in the process. As such, one can have high turns with high or low inventories (it all depends on what the throughput is).
[pic]

Discussion Question 3.7

A short cost-to-cash cycle means that it does not take long to convert an input into a sold output. Clearly, this is good because we do not need to finance the input for a long time before it earns revenue (i.e., lower working capital requirements).
Short cost-to-cash cycle requires short flow times, which imply low inventories (for a given throughput), or high throughput (for a given inventory).

[pic]

Exercise 3.1 (Bank)

For the bank we have Average inventory I = 10 people, Throughput R = 2 people/min (we assume a stable system).
Thus,
Average flow time T = I / R = 10/2 min = 5 min.

[pic]

Exercise 3.2 (Fast-Food)

For the fast food outlet we have Average inventory I = 10 cars.
Throughput evaluation is as follows: Cars attempt to enter the drive through area at a rate of 2 cars/min. However 25% of cars leave when they see a long queue. Thus, cars enter the drive through at a flow rate R = 75% * 2 cars/min = 1.5 cars/min. Thus Average flow time T = I / R = 10/1.5 min = 6.67 min.

[pic]

Exercise 3.3 (Checking Accounts)

For a checking account we have Average inventory I = average balance = $3,000 Turns = 6 per year. Average flow time T = 1 / turns = 1/6 year = 2 months.
Thus
Throughput R = I / T = 3,000/2 = $1,500 / month.

[pic]

Exercise 3.4 (ER)

First draw the flowchart with all the data given:

We assume a stable system. This implies that average inflow equals average outflow at every stage. In this case you are given inventory numbers I and flow rate R = 55 patients/hr. There are two flow units:

(1) Those that are potential admits: flow rate = 55*10% = 5.5/hr. (2) Those that get a simple prescription: flow rate = 55*90% = 49.5/hr.

To find the average flow times, we use Little's law at each activity for which the flow time is unknown:

(1) Buffer 1: R = 55/hr (both flow units go through there), I = 7, so that waiting time in buffer 1 = T = I/R = 7/55 hr = 0.127 hours = 7.6 minutes.

(2) Registration: flow time T = 2 min = 2/60 hr. All flow units flow through this stage. Thus flow rate through this stage is R = 55 / hr. Average inventory at registration is given by I = RT = 55*2/60 = 1.83 patients.

(3) Buffer 2: R = 55/hr (both flow units go through there), I = 34, so that waiting time in buffer 2 = T = I/R = 34/55 hr = 0.62 hours = 37.1 minutes.

(4) Doctor time: depends on the flow unit: 4a: potential admits: T = 30 minutes 4b: prescription folks: T = 5 minutes

OK, now we have everything to find the total average flow times: find the critical path for each flow unit. In this case, each flow unit only has one path, so that is the critical path. We find its flow time by adding the activity times on the path:

(a) For a potential admit, average flow time (buffer 1 + registration + buffer 2 + doctor) = 7.6 + 2 + 37.1 + 30 = 76.7 minutes
(b) For a person ending up with a prescription, average flow time (buffer 1 + registration + buffer 2 + doctor) = 7.6 + 2 + 37.1 + 5 = 51.7 minutes.

The answer to the other questions is found as follows:

1. On average, how long does a patient spend in the emergency room?
We know the flow time of each flow unit. The average flow time over all flow units is the weighted average: 10% of total flow units spend 76.7 minutes while 90% spend 51.7 minutes. Thus, the grand average is:

T = 10% * 76.7 + 90%*51.7 = 54.2 minutes.

2. On average, how many patients are being examined by a doctor?
This question asks for the average inventory at the doctor's activity. Again, first calculate inventory of each type of flow unit: (a) Potential admits: R = 5.5 patients/hr, T = 30 min = 0.5 hr, thus, I = RT = 5.5/hr*0.5 hr = 2.75 patients (b) Simple prescription: R = 49.5 patients/hr, T = 5 min = (5/60) hr, thus I = RT = 49.5*(5/60) = 4.125 patients
Thus, total inventory at the doctor is 2.75 + 4.125 = 6.865 patients.

3. On average, how many patients are in the ER?
This question asks for total inventory in ER = inventory in buffer 1 + inventory in registration + inventory in buffer 2 + inventory with doctors = 7 + 1.83 + 34 + 6.865 = 49.695 patients.

[pic]

Exercise 3.5 (ER, triage)

(The solutions shown here are for an arrival rate of 50, which indeed is inconsistent with exercise 3.4.) The process flow map with the triage system is as follows:

The inventory, and time spent in various locations are as follows. In each case the calculated quantity is italicized.

Throughput through ER, R = 50 patients / hour = .8333/min. Average inventory in emergency room, I = sum of inventory in all stages = 49.75 patients Average time spent in the emergency room = I/R = 49.75/.8333 = 59.7 minutes. For patients that are eventually admitted, average time spent in the emergency room = time in buffer 1 + registration + buffer 2 + triage nurse + buffer 3 + doctor (potential admit) = 75 minutes.

Exercise 3.5 (ER, triage)

(The solutions shown here are for an arrival rate of 55, consistent with exercise 3.4.) The process flow map with the triage system is as follows:

The inventory, and time spent in various locations are as follows. In each case the calculated quantity is italicized.

Throughput through ER, R = 55 patients / hour = .8333/min. Average inventory in emergency room, I = sum of inventory in all stages = 49.75 patients Average time spent in the emergency room = I/R = 49.75/.8333 = 59.7 minutes. For patients that are eventually admitted, average time spent in the emergency room = time in buffer 1 + registration + buffer 2 + triage nurse + buffer 3 + doctor (potential admit) = 75 minutes.

[pic]

Exercise 3.6 (ER, triage with misclassification)

In this case the process flow map is altered somewhat since there are some patients sent from simple prescriptions to buffer 3.

(We will assume that the doctor "instantaneously" recognizes misclassification so that a misclassified patient does not spend 5 minutes with the doctor. However, if you assume such person also spends 5 minutes, the entire methodology below follows, only increase the relevant flow time by 5 minutes.)
The inventories, throughputs and flow times are as follows:

Throughput through ER, R = 55 patients / hour Average inventory in emergency room, I = sum of inventories in all stages = 37.46 Average time spent in the emergency room T = I/R = 37.46/.9167 = 40.86 minutes.

To calculate flow times, we should distinguish three types of flow units: 1) those that are correctly identified as potential admits the first time: flow rate = 55*9% = 4.95/hr. Average flow time = time in buffer 1 + registration + buffer 2 + triage nurse + buffer 3 + doctor (potential admit) = 56.82 minutes 2) those that are first mis-identified as simple prescription and later corrected and redirected to potential admits: flow rate = 55*1% = 0.55/hr. Average flow time = time in buffer 1 + registration + buffer 2 + triage nurse + buffer 4 + buffer 3 + doctor (potential admit) = 74.80 minutes (3) those that are correctly identified to get a simple prescription the first time: flow rate = 55*90% = 49.5/hr. Average flow time = time in buffer 1 + registration + buffer 2 + triage nurse + buffer 4 + buffer 3 + doctor (simple prescription) = 38.89 minutes

For patients that are eventually admitted, that is types (1) and (2), average time spent in the emergency room is the weighted average of their flow times. Type (1) is fraction 4.95/(4.95+0.55) = 90% of those admitted and type (2) is 0.55/(4.95+0.55) = 10% of those admitted. Thus, average flow time for patients that are eventually admitted is 90%*56.82min + 10%*74.80.8min = 58.62 min.

Note that the overall average flow time over all patients is: 9%*56.82min + 1%*74.80min + 90%*38.89.8min = 40.86 min, in agreement with the number derived directly from Little's Law above.

[pic]

Exercise 3.7 (Orange Juice Inc)

First let us notice that there are two periods in the day:

1. From 7am-6pm, oranges come in at a rate of 10,000kg/hr and are processed, and thus leave the plant, at 8000kg/hr. Because inflows exceed outflows, inventory will build up at a rate of

ΔR = 10,000-8,000kg/hr = +2,000 kg/hr.

Thus, because we cannot have oranges stored overnight, we start with an empty plant so that inventory at 7am is zero: I (7 am) = 0. Because inventory builds up linearly at 2,000kg/hr, the inventory at 6pm is I(6pm) = 2,000 kg/hr * 11 hr = 22,000kg.

[pic]

2. After 6pm, no more oranges come in, yet processing continues at 8000 kg/hr until the plant is empty. Thus, inflows is less than outflows so that inventory is depleted at a rate of

ΔR = 0 - 8,000 kg/hr = - 8,000 kg/hr.

Thus, since we have that I(6pm) = 22,000kg, we know that inventory depletes linearly from that level at a rate of -8,000 kg/hr. Thus, to empty the plant, inventory must reach zero and this will take an amount of time Δt where:

22,000 kg - 8,000 kg/hr Δt = 0,

or

Δt = 22,000/8,000 hr = 2.75 hr = 2 hr 45min.

Thus, the plant must operate until 6pm + 2hr 45min = 8:45pm.

This can all be graphically summarized in the inventory build up diagram shown above.

3. Truck dynamics: for this the inventory diagram is really useful. Notice that we have taken a total process view of the plant, including the truck waiting queue. Thus, inventory is total inventory in the bins + inventory in the trucks (if any are waiting). So, let's draw the thick line on the inventory build-up diagram, representing the bin storage capacity. First inventory builds up in the bins. When the bin is full, then the trucks must wait. This happens at:

2,000 kg/hr Δt = 6,000kg,

so that the first truck will wait after Δt = 6,000/2,000 hr = 3 hr, which is at 10am. Now, the last truck that arrives (at 6pm) joins the longest queue, and thus will wait the longest. That "unfortunate" truck will be able to start dumping its contents in the bins when the bins start depleting. This is at

22,000 kg - 8,000 kg/hr Δt = 6,000,

or after Δt = (22,000-6,000)/8,000 hr = 2 hr, after 6pm. Thus, the last truck departs at 8pm and the maximum truck waiting time is therefore 2 hours.

Now, among all the trucks that do wait (i.e., those arriving after 10am), the first truck waits practically zero minutes, and the last truck waits 2 hours, culminating in an average of (0 + 2)hrs/2 = 1 hour.

Notice that the trucks arriving before 10am do not wait. Thus, the overall average truck waiting time is

(# trucks arriving before 10am * 0 + # trucks arriving after 10am * 1hr)/(total # of trucks).

Because input rate is 10,000kg/hr and each truck carries 1,000 kg/truck, the truck input rate is 10 trucks/hr, so that the overall average truck waiting time is:

(10 trucks/hr * 3hrs * 0 + 10 trucks/hr * 8hrs * 1hr)/(10 trucks/hr * 11 hrs) = 8/11 hr = 43.63min.

Average waiting time can also be calculated by noticing that the area of the upper triangle in the build-up diagram represents the total amount of hours waited by all trucks:

Area = (22,000 - 6,000)kg * (8pm - 10 am) /2 = 16,000 kg * 10 waiting hr /2

= 80,000 kg waiting hrs = 80,000 kg waiting hrs / (1,000 kg/truck) = 80 truck waiting hrs.

Now, we just calculated that there are 80 trucks that do wait, hence the average waiting time among those trucks that do wait is 80 truck waiting hrs/ 80 trucks = 1 hour.

[pic]

Exercise 3.8 (Jasper Valley Motors)

Part a.

TURNStotal = 1/Ttotal so Ttotal = 1/8 years = 1.5 months

Itotal = RtotalTtotal = 160 vehicles/month * 1.5 months = 240 vehicles, which is the answer.

Typical errors: wrong units and stating that “I = 160*(1/8) = 20 vehicles.”

Part b.

Similar to part a, we have Tnew = 1/7.2 years = 1.667 months and Tused = 1/9.6 years = 1.25 months.

Inew = 0.6 * 160 vehicles/month * 1.667 months = 160 new vehicles

Iused = 0.4 * 160 vehicles/month * 1.25 months = 80 new vehicles

Total monthly financing costs then 160*$175 + 80*$145 = 28,000 + 11,600 = $39,600/month.

Cost per vehicle are then $39,600/month ((160+80) = $165 per vehicle per month, which is the answer.

Typical errors:
1. Not realizing that the cost driver is inventory, not throughput. (Taking a throughput-weighted average would yield 60%* $175 + 40%*$145 = 163, instead of the correct inventory-weighted.)
2. Not taking a weighted average. Clearly, the answer must fall between $145 and $175.
3. Giving total monthly costs instead of per vehicle.

Part c.

From Little’s Law, cutting time 20% while holding R unchanged will reduce inventory by 20%. From part b, average monthly financing costs for new vehicles is 160*$175 = $28,000/month. A 20% drop gives $5,600 per month, which is the answer.

Typical errors:
1. Assuming the service works also on used cars, leading to 20%$39,600/month= $7920/mo.
2. Only stating the value per car per month: We reduce Tnew from Tnew = 1/7.2 years = 1.667 months by 20%*1.667mo = 1/3 mo. This saves 1/3mo * $175/new car,mo = $58.33/new car. (Multiplying by 96new cars/mo would have yield the correct $5600/mo.)
3. Reducing the flow time by 20% does not mean that turnover is increased by 20%. (On the contrary, actually, turnover increases here from 7.2 to 9, which is 25%.)
[pic]

Exercise 3.9 (Cheapest Car Rentals)

Part a.

| |Customers |Clean area |Repair area |
|Throughput |300/week |240/week |60/week |
|Inventory |200(0.5 + 100(2 = 300 cars |100 cars |120 cars |
|Flow Time |1 week |0.42 weeks |2 weeks |

Part b:

Number of cars owned by Cheapest = 300 + 100 + 120 = 520 Number of cars on rent = 300 Revenue per week = (#of cars on rent for short term) x $200/week + (#of cars on rent for LT) x $120/week = I_ST x $200/wk + I_LT x $120/wk Recall from [5a] that I_ST = R_ST x T_ST = 200/wk x 0.5 wks = 100 and I_LT = 100x2=200 = 100($200 + 200($120 = $44,000/week Cleaning cost per week = 240($5 = $1,200/week Repair cost per week = 60($150 = $9,000/week Depreciation per week = 520($40 = $20,800/week Profit per week = 44,000 - (1,200 + 9,000 + 20,800) = $13,000/week

Part c:

Decreasing flow time in repairs by 1 week will lower the inventory in repairs from 120 to 60. This will reduce the number of cars required by 60 and thus weekly depreciation by $2,400. All other revenues and costs will be unchanged.

Decreasing repair cost per car by $30 lowers weekly repair cost by 60(30 = $1,800.

Decreasing the flow time in repairs is thus more effective since it results in larger savings.

[pic]

Exercise 3.9 (The Evanstonian)

Part a.

Answer: __162 of each type__

For Leisure Travelers we have:
RL = 135/3 = 45 guests/night and TL = 3.6 nights → IL = RL TL = 45 × 3.6 = 162 guests

For Business Travelers we have RL = 135 × 2/3 = 90 guests/night and TL = 1.8 nights → IL = RL TL = 90 × 1.8 = 162 guests

Part b:

Answer: __12.5/month___

The total inventory is then IT = 324. We then have Turns = RT/IT = 135/324 = 0.4167 turns per day = 12.5 turns per month.

An alternative approach: The average stay is TT = (1/3) × 3.6 + (2/3) × 1.8 = 2.4 days. Turns = 1/TT = 1/2.4 = 0.4167 turns per day = 12.5 turns per month.

Part c:

Answer: $____230/day______

From the analysis above on the average night, 324 rooms are occupied with half of the guests being leisure travelers. Thus the average rate that The Evanstonian receives per occupied room is:

½ × 250 + ½ × 210 = $230.
[pic]

Exercise 3.11 (ABC Corporation)

2004 Factory flow time = I/R = 20,880/97,380 = 0.2144 years (must use COGS dollars) AR flow time = 21,596/99,621 = 0.2168 years (must use sales dollars)

2005 Factory flow time = I/R = 25,200/98,350 = 0.2562 years AR flow time = 22,872/110,644 = 0.2067 years

Performance in the factory has worsened while that in AR has improved. Overall, net income has increased so that at the aggregate corporate level we have an improvement.

-----------------------
[pic]

[pic]

[pic]

[pic]

Similar Documents

Premium Essay

Business and Management

...org/ijbm International Journal of Business and Management Vol. 5, No. 9; September 2010 A Study of the Impact of Business Process on the ERP System Effectiveness Wen-Hsien Tsai (Coresponding author) Department of Business Administration National Central University, Jhongli, Taoyuan 320, Taiwan E-mail: whtsai@mgt.ncu.edu.tw Shu-Ping Chen Department of Business Administration National Central University, Jhongli, Taoyuan 320, Taiwan E-mail: irwin26@mail2000.com.tw Elliott T.Y. Hwang Department of Information Management Chung Yuan Christian University, Jhongli, Taiwan 320, Taiwan E-mail: eliott01@ms3.hinet.net Jui-Ling Hsu Department of International Trade Feng Chia University, Taichung 407, Taiwan E-mail: jlhsu@fcu.edu.tw Abstract An ERP implementation takes many years to complete and requires a large amount of IT investment and their effectiveness is hard to evaluate. Companies implement ERP systems to integrate the business processes of a company, and help organizations obtain a competitive advantage. In each ERP implementation stage, Business Process Reengineering (BPR) plays different important roles. This study examined the process problems (system process / business process), BPR and performance of ERP systems by using the questionnaire survey and AVOVA analysis. We also examined the relationship between degree of BPR and ERP system performance using regression analysis. Keywords: Enterprise Resource Planning (ERP), Business Process Reengineering (BPR),......

Words: 6246 - Pages: 25

Premium Essay

Business Management

...Business Man 1 Intro to Bus Man as science - Study Unit 1 & 2 Man science uses a scientific approach to solver many problems. Used in variety of orgs to sove different types of problems. Encompasses a logicical mathematical approach to problem solving 1.1 Man science process • Observation - Identification of a problem that exists in the system or organization. • Definition of the Problem - problem must be clearly and consistently defined showing its boundaries and interaction with the objectives of the organization. • Model Construction - Development of the functional mathematical relationships that describe the decision variables, objective function and constraints of the problem. • Model Solution - Models solved using management science techniques. • Model Implementation - Actual use of the model or its solution. 1.2 Factors of production Natural resources i.e. crude oil Capital i.e. investors Labour i.e. technical and academic Entrepeneurship i.e. takes capital and link labour and natural resouces combined with risk to provide goods and services. Knowledge i.e. to determine wants and needs quickly and to respond to them with products and services. 1.3 3 Most NB Economic systems = Capatalism, Socialism and Communism 1.3.1 Capatalism Free market system Built on principles of private ownership Is based on the right to make a profit, right to compete and the right to own property. System is market driven and the solutions to a country's economic......

Words: 9542 - Pages: 39

Premium Essay

Business Management

...Page » Business and Management Business Strategy In: Business and Management Business Strategy Section B: Strategic Management (50 Marks) Objectives: (a) To develop an understanding of the general and competitive business environment, (b) To develop an understanding of strategic management concepts and techniques, (c) To be able to solve simple cases. Contents 1. Business Environment General Environment–Demographic, Socio-cultural, Macro-economic, Legal/political, Technological, and Global; Competitive Environment. 2. Business Policies and Strategic Management Meaning and nature; Strategic management imperative; Vision, Mission and Objectives; Strategic levels in organisations. 3. Strategic Analyses Situational Analysis – SWOT Analysis, TOWS Matrix, Portfolio Analysis – BCG Matrix. 4. Strategic Planning Meaning, stages, alternatives, strategy formulation. 5. Formulation of Functional Strategy Marketing strategy, Financial strategy, Production strategy, Logistics strategy, Human resource strategy. 6. Strategy Implementation and Control Organisational structures; Establishing strategic business units; Establishing profit centres by business, product or service, market segment or customer; Leadership and behavioural challenges. 7. Reaching Strategic Edge Business Process Reengineering, Benchmarking, Total Quality Management, Six Sigma, Contemporary Strategic Issues. The Nature of Strategic Management ......

Words: 380 - Pages: 2

Premium Essay

Business & Management

...1 Case Study : Sinosteel Strengthens Business Management with ERP Applications  SUMMARY:  China’s state owned strategic resources enterprise Sinosteel Corporation uses Oracle Enterprise Resource Management (ERP) to strengthen its business management and global reach.  Case:  Sinosteel Corporation (abbreviated as Sinosteel) is a central enterprise under the administration of the State-Owned Assets Supervision and Administration Commission. There are 76 subsidiaries under the administration of Sinosteel, among which 53 are in China and 23 abroad, the revenue from core businesses reaches RMB 111 billion in 2008. Chinese currency is called the Renminbi (RMB), and it is currently trading at .146 US dollars in 2009.  Sinosteel is mainly engaged in developing and processing of metallurgical mineral resources, trading and logistics of metallurgical raw materials and products, and related engineering technical service and equipment manufacture. It is a large multinational enterprise with core businesses engaging in resources development, trade & logistics, engineering project and science & technology, equipment manufacturing and specialized service, providing comprehensive auxiliary service for steel industry, especially steel mills.  Sinosteel is organized as decentralized, multi-business unit firm. Like most rapidly growing global firms, Sinosteel has grown through the acquisition of hundreds of small companies, and many medium to large size companies. In the...

Words: 1481 - Pages: 6

Premium Essay

Business to Business Relationship Management

...BUSINESS TO BUSINESS RELATIONSHIP MANAGEMENT Strategic Sourcing and Supply Chain Management 04/25/11 CONTENTS Abstract 3 I. Stages of Buyer-Supplier relationships 4 II. Types of buyer-supplier collaboration 5 III Supplier evaluation and selection 6 IV. Steps to establishing a Buyer-Supplier Collaboration 8 V. Barriers to establishing a succesful Buyer-Supplier relationships 9 VI. Benefits of a successful Buyer-Supplier Collaboration………………………………………………………..9 Conclusion 10 References 11 Abstract In today’s competitive business world, having the right kind of buyer-supplier relationship is critical to the success of most companies. Most manufacturing organizations spend over 50% of their revenue on supply chain. Considering the fact that customers are more price sensitive than ever, companies have to squeeze out potential profit margins from their supply chain investment. Manufacturers are also becoming increasing dependent on their suppliers; this has led to a general increase in level of collaboration between buyers and supplier. In fact, having the right source of supply can actually be a source of competitive advantage especially when both parties are bonded by an exclusive contract. For example, Dell computer was the first computer manufacturer to recognize the potential benefits of a collaborative supply chain relationship. Dell was so confident that building a...

Words: 1738 - Pages: 7

Premium Essay

Business Management

...BALM111 BCD140 BSB203 PRINCIPLES OF BUSINESS MANAGEMENT CAT 1 BALM/NRB/5120/13 Dorothy Awuor Obura Submitted to: Mbiyu Muhugura 15TH February, 2014 1) Describe management in terms of its functions (5 marks) Ans. According to Mary Parker Follett, “Management is the art of getting things done through other people” (Medical and Urwick 1941). Below are various functions of Management 1. Planning: This is a managerial function that determines in advance what should be done. It involves looking for the future. It is the determination of what is to be done, how and where it is to be done, who is to do it and how the results are to be evaluated. 2. Organizing: This involves arranging the way/manner in which organizational structure is established, how authority, responsibilities and duties are given to the managerial team. 3. Directing/Leading: Once the structure has been established and staffing done, the next step in any organization is to move towards achieving the objectives of the organization. It’s a process whereby the management guides and influences the staff by arousing the desires in their minds to give their best to the organization. 4. Controlling: Through controlling, the manager has to ensure that everything is done in conformity with the plans adopted as well as the established principles. In controlling, the management must establish standards of performance, measure performance and compare it......

Words: 2470 - Pages: 10

Premium Essay

Business Management

...corporate style to manage these units in order to add value, and potentially more value than other parents could add and prevent these businesses being handicapped by the centre. Essentially, ‘putting one's eggs in different baskets" may reduce the risk in the overall portfolio but requires that the firms management possess the strong capabilities necessary to successfully execute this strategy. This in mind, the Goold and Campbell style that I would adopt is the strategic control style based on…. Because the company has many unrelated businesses, in many industries and in many geographic regions, it is quite unlikely that corporate centre management would be adept at the capabilities required to manage these businesses. Most corporate managers have experience in only one industry (or a few) and none realistically can be an expert in the wide variety of unrelated industries represented in a conglomerate. The business units' management is close to the markets in the different regions, familiar with the different cultures that exists in those markets, and is more likely to have intimate specialist knowledge of their particular businesses. They also need to be flexible and nimble at business-level decision making. As such at the centre we will focus on financial control, which does not require a lot of rich, industry-specific knowledge. Therefore the centre will impose a strict financial discipline of the sort GE's former chairman and CEO, Jack Welch imposed on all......

Words: 1364 - Pages: 6

Premium Essay

Business Management

...International Journal of Management Reviews (2007) doi: 10.1111/j.1468-2370.2007.00215.x XXXX utilitarian, ORIGINAL XXX International Publishing Management theories IJMR 2007managerial and relational Reviews of corporate social responsibility © Blackwell Journal of Ltd 2007 1460-8545 Oxford, UK ARTICLES Blackwell Publishing Ltd Utilitarian, managerial and relational theories of corporate social responsibility Davide Secchi Concepts and theories of corporate social responsibility (CSR) have been examined and classified by scholars since the mid-1970s. However, owing to the evolving meaning of CSR and the huge number of scholars who have begun to analyze the issue in recent years fresh efforts are needed to understand new developments. Since there is a great heterogeneity of theories and approaches, the task remains a very hard one, mainly because heterogeneity derives from multi-disciplinary diversity. The criterion for selection is to consider the role that theorists confer to the firm. Following this idea, three groups of theories have been discerned: (1) the utilitarian group, in which the corporation is intended as a maximizing ‘black box’ where problems of externalities and social costs emerge; (2) the managerial category, where problems of responsibility are approached from inside the firm (internal perspective); (3) relational theories, or those in which the type of relations between the firm and the environment are at the center of the analysis. The three......

Words: 16348 - Pages: 66

Premium Essay

Business Management

...and Ronald MacAlpine. They provided maintenance services for bus services and the company considerably grew over the years. By 1997, this company had grown to be the largest in the Australian market for automobile parts mostly brakes and steering parts. Consequently, they became a preference for General Motors Holden and Mitsubishi. Toyota came on board later on in 2003. MetalEx started off as a family business but as time went by some of its shares belonged to bank and insurance companies. They counted up to 7% of decisions. The companies had faced a lot of problems by 1995. However, the company had a turnaround in 1996. A new plan for the business was made. This plan was meant to put MetalEx back on its feet. By 2000 the business had transformed with the purchase of new assets and businesses. The purpose of the acquisition of the new businesses was to establish a pacific rim beachhead for the German parent company, Greothe Industries. At that same time, the rationalized business would bring forth cash flow, infrastructure and economies of scale for the expansion of the business into the rapidly growing markets of China, Indonesia, The Phillipines, and later on India. However, in 2014, this company faced a worse situation than it was in earlier. Dollar fluctuations and increase in costs led to lose of a large client base. There was also a increase in costs of production due to the rise in labour costs in Austarlia. This greatly hurt companies in Australia. Pestel analysis......

Words: 3172 - Pages: 13

Premium Essay

Business Management

...THE BERNIE MADOFF'S SCANDAL Jayne Egharevba RES/351 February 16,2015 Business Management/Human Resources The Bernie Madoff’s Scandal The Bernie Madoff scandal is widely recognized as an example of an unethical business research, Bernie Madoff managed to build a multibillion-dollar investment firm based on skewed research and false financial data. The wealth management eluded the SEC and other authorities for decades before finally being shut down in 2008. Unethical business research played a large role in the company’s ability to hide their criminal conduct. However, the actions of the business were uncovered and federal charges were filed against Madoff. The incident has provided one of the best examples of how additional safeguards can be implemented to prevent similar actions from happening in the future. Madoff wealth Management Company skewed research and performance results, and this is an example of unethical research behavior. Highly positive outcomes were provided to new potential investors to attract new money to be invested in the firm. ( Henriques 2011). However, these findings were completely factious. In fact, there many companies in the wealth management industry that viewed this outcome with suspicion, and refused to conduct businesses with Madoff’s company. When financial downturn of 2008 started to get worse, investors began to withdraw their funds at an accelerating rate. Had the research data been reported accurately, the investor can make a......

Words: 707 - Pages: 3

Premium Essay

Business Management

...non-observation of the Recommendations of MCCG 2012, including the reasons thereof, has been included in this Statement. Principle 1 – Establish Clear Roles and Responsibilities 1.1 Clear Functions of The Board and Management The Board leads the Group and plays a strategic role in overseeing the Group’s corporate objectives, directions and long term goals of the business. The Board is responsible for oversight and overall management of the Group. The Board Committees are established to assist the Board in discharging its responsibilities. The Board delegates specific responsibilities to three (3) principal Committees, namely the Audit Committee, the Nomination Committee and the Remuneration Committee. All committees have written terms of references and operating procedures and the Board receives reports on their proceedings and deliberations. The Chairman of the respective Committees shall report the outcome of their meetings to the Board. Minutes of all Board Committee meetings are circulated to the Board members so that they are kept abreast of proceedings and matters discussed at Board Committee meetings. Independent Non-Executive Directors provide unbiased and independent views in ensuring that the strategies proposed by the Management are fully deliberated and examined objectively, taking into perspective the long term interests of shareholders, other stakeholders and the community at large. The Board recognizes the importance of the role of the......

Words: 6032 - Pages: 25

Premium Essay

Business and Management Business and Management Business and Management Business and Management Business and Management

...Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and management Business and......

Words: 321 - Pages: 2

Premium Essay

Business Management

...Name: Course name: Instructor’s name: Date: Business management plan Business success requires a breadth of knowledge and abilities and, in bringing together theory and practice. A business plan is an essential tool not only for those starting a business but also for those with existing businesses. A business plan is a guide to what a business will do, what it aims to achieve, how it will be accomplished and most importantly whether there is someone with the ability to do that. The business plan provides a complete description of a business idea, explaining its sales and marketing strategies, the management team, prediction of financial forecasts and operations. In short, a business plan enables a business idea to be transformed from the initial conception stage towards a fully reasoned and realistic plan of action (Blyth, M, 2013). A business plan also operates as a working document and essential management tool as it shows clearly how the business will proceed and the strategies it will employ. It enables possible obstacles to be avoided or minimized, targets to be focused upon and achieved, and effective structure to be put in place for a business strategies and finance. The business plan should be used as a guiding factor when it comes to decision making. It should be reviewed, modified and developed as the business evolves and progresses. It’s true that businesses that implement their business plan and keep it up to date can monitor their growth and are in a......

Words: 2092 - Pages: 9

Premium Essay

Business Management

...Academic World’s and The home and LEADING Professional Academic Business Management 2013-2014 Available on Complete range of global products plus many additional features! Fresh New look Enhanced Search functionality with intuitive search filters Create an Account to make the most of our resources Know about the latest from SAGE with our e-Mail Alerts Request Inspection Copies Browse our product Catalogues and register for a copy VISIT NOW and send your FEEDBACK to marketing@sagepub.in Watch out for MORE INNOVATIVE and exciting NEW FEATURES in the coming months! New & Forthcoming Titles! Please note that information is correct at time of print. Prices are subject to change without notice. Business & Management | 2013 / 2014 Contents Organizational Behaviour / Organization Studies ........... 2-6 Change Management .......................................................6-7 Leadership ...................................................................... 7-10 Human Resource Management.................................... 10-15 Coaching & Mentoring .................................................. 15-18 Strategy ......................................................................... 18-19 Entrepreneurship ...............................................................20 International Business ................................................ 20-22 Corporate Governance & Social Responsibility, Business Ethics & Sustainability......

Words: 63606 - Pages: 255

Premium Essay

Management in Business

...Management In Business Abstracts In business, there must be some form of management as to prevent chaos in the business. To make plans and implement them, to analyze, organize, cordinate and control. The skills of managing include leadership skills, and the human skills, interpersonal skills, conceptional skills. Without a management role in place for businesses with many departments, the business will not succeed. The difference though in good management and excellent management are vast. The experience a manager has in the management business will be of great significance in whether the next business he works for, or department succeeds. Management in Business The Vice President of the services division wants to hire a manager for the service division. To meet the requirements the Vice President has stressed, the candidate I choose for this position will meet those requirements as follows: This candidate will be filling the position of manager in our services department. This person will possess experience and skill in planning. In planning, she will set goals, establish strategies and cordinate activities. Some involvement in planning will be required of this person to keep providing excellent customer service. This......

Words: 854 - Pages: 4