Production & Operations
The creation of goods using land, labor, materials, capital, entrepreneurship, and knowledge (factors of production)
What is production?
What does CAD mean?
Computer-Aided Design: the use of computers in the design of products.
What are the 3 financial statements from class?
Balance Sheet, Income Statement, Cash Flow
What are 2 types of financing?
Debt Financing: Borrowing money from a financial institution (bank, savings and loan, etc.) or borrowing money from the market (bonds)
Equity Financing: Rather than borrowing funds, it involves taking on new owners
What is the revenue of a company that sold 450 units of an item at $23 per item?
Revenue = # of units sold x price of item
Revenue = 450 x 23 = $10,350
All the activities managers engage in to help firms create goods
What is production management?
What does CAM mean?
Computer-Aided Manufacturing: the use of computers in the manufacturing of products.
What are the 2 types of accounting?
Managerial and Financial
Leverage ratios evaluate...
a firm's debt
My company's income statement reflects sales of $50,305, variable costs of $23,460, and fixed costs of $12,200. What is my contribution margin?
CM = sales - variable costs
CM = 50,305 - 23,460 = $26,845
A specialized area in management that converts or transforms resources into goods and services
What is operations management?
What does CIM mean?
Computer-Integrated Manufacturing: use of both computer-aided design and computer-aided manufacturing.
What is the equation used to represent the balance sheet?
Assets = Liabilities + Owner Equity
What is the Debt to Equity Ratio?
Total Debt / Total Owner's Equity
*compares amount you owe to the amount you own. The lower the ratio, the less you owe
A company has current assets of $240,000 and current liabilities of $120,000. What is the company’s current ratio?
Current Ratio = Current Assets / Current Liabilities
Current Ratio = 240,000/120,0000 = 2.0
What are the 3 types of facility layouts?
Modular, Assembly, Fixed-Position
The production process in which a minimum of inventory is kept and parts, supplies, and other needs are delivered just in time to go on the assembly line.
What is Just-In-Time Inventory Control?
What is the equation used to represent the Income Statement?
Profit = Revenue - Expenses
What is the Current Ratio?
Current Assets / Current Liabilities
*higher number is better, more assets than liabilities
A company has current assets of $180,000, inventory of $60,000, and current liabilities of $90,000. What is the company’s quick/acid ratio?
(Current Assets - Inventories) / Current Liabilities
Quick/Acid Ratio = (Current Assets - Inventories) / Current Liabilities
Quick/Acid Ratio = (180,000-60,000) / 90,000
Quick/Acid Ratio = 1.33
What is the Production Process (+ an example of each step)?
Inputs (land) --> Production Control (planning) --> Outputs (goods)
Quality measure that allows only 3.4 defects per million opportunities.
What is Six Sigma Quality?
This financial statement shows a company’s revenues and expenses over a specific period of time to reveal whether it made a profit or a loss.
What is the income statement?
What is the Quick/Acid Ratio?
(Current Assets - Inventories) / Current Liabilities
*measure of liquidity, how fast can company cover liabilities with short term assets?
A company has total debt of $450,000 and total owner’s equity of $300,000. What is the company’s debt to equity ratio?
Debt to Equity Ratio = Total Debt / Total Owner's Equity
Debt to Equity Ratio = 450,000 / 300,000
Debt to Equity Ratio = 1.5