April 25, 2016

Accounting: The Language of Business - Review Notes

Review of chapter of Horngren (Introduction to Financial Accounting) to be posted


Accounting is the information system that measures business activity, processes the data into reports,
and communicates the results to decision makers. Accounting is “the language of business.” The better you understand the language of business, the better you can manage your own business.

A key product of accounting is a set of reports called financial statements. Financial statements report on a business in monetary terms.

We can divide accounting into two fields—financial accounting and managerial accounting.
Financial accounting provides information for external decision makers, such as outside investors and lenders. Financial accounting provides data for outsiders.

Managerial accounting focuses on information for internal decision makers, such as the company’s managers. Managerial accounting provides data for insiders.

A business can be organized as one of the following:
● Proprietorship
● Partnership
● Corporation
● Limited-liability partnership (LLP) and limited-liability company (LLC)
● Not-for-profit

Accounts are maintained for each of them.

Accounting Concepts and Principles
The Entity Concept
The Faithful Representation Principle
The Cost Principle
The Going-Concern Concept
The Stable Monetary Unit Concept

The Accounting Equation
The basic tool of accounting is the accounting equation. It measures the resources of
a business and the claims to those resources.

Definition of  Accounting

Accounting is the process of analyzing, recording, classifying, summarizing and communicating the results of the economic events of an organization.  The economic events must be measurable in dollars, and are called transactions.

Transaction is an economic event that is a measured in dollars. Accounting is based on actual transactions, not opinions or desires. A transaction is any event that affects the financial position of the business and can be measured reliably. Transactions affect what the company owns, owes, or its net worth.

The Accounting Cycle

1.  Analyze each transaction (Decide which account is to debited and which account is to be credited)
2.  Record each transaction in a journal (ordered by date).
3.  Transfer each transaction to the accounts affected in the ledger.
     (The ledger is a set of accounts ordered by account number.)
4.  Summarize the transactions in the form of statements to help in taking decisions.

5. The overall performance of the organization is summarized in financial statements of the organization
     a.  Income Statement:  Shows the net income (profit) of the company.
     b.  Owner's Equity Statement:  Shows the owner's claim in the business.
     c.  Balance Sheet:  Shows the financial position of the company.
     d.  Cash Flow Statement:  Shows where cash came from and where it went during the period.

Similar statements can be prepared for various profit centers of the organization also.


Introduction to Financial Accounting
Professor Alexander Sannella
__________________

__________________
Rutgers Digital Accounting Web

Review notes - Very good detailed notes
http://seattlecentral.edu/faculty/moneil/A210/L1/Horngren01.htm

Presentation slides


http://wps.prenhall.com/wps/media/objects/1838/1883037/powerpoints/ch_01.ppt

Related chapter

http://cwx.prenhall.com/bookbind/pubbooks/horngrenacc5_ca/chapter99/medialib/corporate/ch1.pdf

Notes
http://fgamedia.org/faculty/jnava/ng_courses/1a-b/lec_mat/lec_01.htm

Foundation lecture for accounting course - PPT
www.schulich.yorku.ca/ssb-extra/intranet.nsf/Lookup/IntroductiontoAccounting/%24file/IntroductiontoAccounting.ppt

Book chapter from Pearson
http://media.wiley.com/product_data/excerpt/11/04700470/0470047011.pdf


Financial, Cost and Management Accounting - Review Notes List


Updated 25 Apr 2016,  12 Apr 2016,
8 Dec 2011

Accrual Accounting and Financial Statements - Review Notes

Review of chapter of Horngren (Introduction to Financial Accounting)


The first objective in this article  is to understand the types of adjustments typically made to the accounts, and why those adjustments need to be made.

Accrual Accounting

A simple definition of accrual accounting is:  "record all revenues in the period we earn them; record all expenses in the period we incur them."  It can also be explained as recording a business transaction as it happens without waiting for the cash payment or receipt.  For revenues, the basic approach is to determine when the revenue was earned. If  a service is performed, the revenue is accounted as earned during the period.

Expenses work in a similar way.  If an advertisement is run in the newspaper in a  month, the accounting transaction is entered in the journal, even though cash payment is done by the firm after two months,. The incurrence of the expense is recognized, rather than the timing of the cash payment.

Facts about Adjustments



Every adjustment affects one income statement account and one balance sheet account.  The income statement account will be a revenue or an expense.

Adjustments are only done at the end of an accounting period.  We will assume that the entire accounting cycle takes place in one month's time.  Therefore, the adjustments would be recorded at the end of each month.

The accountant has to  use good judgment in deciding if an adjustment is necessary.

Accrual accounting requires that adjustments be made to properly reflect periodic revenues and expenses.

There are two principles of accounting that are satisfied by the adjusting process. First, we want to make sure we record all revenues that were earned this period. This is called the revenue recognition principle. The revenue recognition principle says that "we must record all revenues in the period they were earned, regardless of whether the cash has been received."

Second, we want to match all expenses that we incurred this period to the revenues earned this period. This is called the matching principle. Some expenses such as rent expense involve paying cash for the expense. However, using up supplies is also an expense, one in which an asset other than cash is being consumed. Similarly, using up insurance and equipment are considered expenses in the adjusting process.

As the revenues and expenses come together on the income statement, these two principles are the foundation for computing net income according to accrual accounting rules.




Adjusting entries, unearned/accrued, revenue/expense
Rutgers Accounting Web
_______________

_______________





Adjusting the accounts - Review notes
http://seattlecentral.edu/faculty/moneil/A210/L3/Horngren03.htm

http://seattlecentral.edu/faculty/moneil/A210/L4/Horngren04.htm

Presentation slides

http://wps.prenhall.com/wps/media/objects/1838/1883037/powerpoints/ch_04.ppt


Flash card exercise

http://www.studystack.com/flashcard-48894

_________________



More flashcards and educational activitites at StudyStack.com
_________________


Financial, Cost and Management Accounting - Review Notes List

Updated 25 Apr 2016, 12 March 2016, 8 Dec 2011

April 24, 2016

Process Costing - Review Notes

In processes output can not be separated and accounted for as in discrete product manufacture. The production process is continuous. Therefore period costs are accumulated and they are charged to the output in a period. In the process there is work-in-progress. So at the start of a period there is beginning inventory and at the end of the period there is ending inventory. During the period, there is input of costs. From these three figures cost of production of a period is calculated and charged to the number of units produced during the period.

Process Costing Illustration
Assembly Department

Physical Units for Dec 2015

Work in progress, beginning inventory  (Dec 1)             0 units
Started during December                                                30 units
Completed and transferred to FG Stores                         30
WIP Ending                                                                       0

Total Costs for Dec 2015

Direct materials                                                               $12,000
Conversion Cost incurred in the process                           24,000
Total assembly department costs Dec 2015                       36,000

Hence assembly cost per unit of output is $36,000/30  =  $1200, itemized as:

Direct material cost     $400
Conversion cost             800
Total cost                    $1200




Bibliography

Detailed explanation of Process Costing and normal and abnormal losses in process
http://www.futureaccountant.com/process-costing/study-notes/characteristics-features-application-industry.php


Process Costing

__________________

__________________
Rutgers Accounting Web

Updated  24 Apr 2016,  8 Dec 2011

April 4th Week - MBA Management Knowledge Revision










------------------

22 April to 26 April 2016



Statement of Cash Flows - Review Notes
http://nraomtr.blogspot.com/2011/12/statement-of-cash-flows-review-notes.html

Financial Statement Analysis - Review Notes
http://nraomtr.blogspot.com/2011/12/financial-statement-analysis-review.html

Cost Accounting

23 April 2016
Role of Costing and Cost Accounting in the Organizations
http://nraomtr.blogspot.com/2011/12/role-of-costing-and-cost-accounting-in.html
Introduction to Cost Terms - Review Notes
http://nraomtr.blogspot.com/2011/12/introduction-to-cost-terms-review-notes.html

Traditional Cost Objectives and Their Utility
http://nraomtr.blogspot.com/2011/12/traditional-cost-objectives-and-their.html
Job Costing - Review Notes
http://nraomtr.blogspot.com/2011/12/job-costing-review-notes.html


Activity-Based Costing and Activity-Based Budgeting
http://nraomtr.blogspot.com/2011/12/activity-based-costing-and-activity.html
Process Costing - Review Notes
http://nraomtr.blogspot.com/2011/12/process-costing-review-notes.html


Cost Center Reports and Analysis
http://nraomtr.blogspot.in/2016/04/cost-center-reports-and-analysis.html
Cost of Sales Account Analysis
http://nraoiekc.blogspot.in/2016/04/analysis-of-cost-of-sales-accout.html

April 23, 2016

Data Analytics - Driving Digital Transformation of Organization




Digital Transformation
Issues                                                      -                  Outcomes

Shrinking Market Share                         -             Expanding Market Share

Pricing Pressures                                                   Enhanced Cost and Cash Advantage

Customer Defection                                              Customer Loyalty

Fragmentation and Complexity                             Speed to Insights

Inefficient Operations                                            Operational Excellence

Aged Platforms and Systems                                 Leading Edge Platforms

Employee Engagement                                          Winning the War for Talent

Fraud and Noncompliance                                      Reduced Risk and Fraud



https://www.accenture.com/us-en/analytics-cross-industry-journey.aspx

Advanced Data Analysis from an Elementary Point of View

by Cosma Rohilla Shalizi, CMU
http://www.stat.cmu.edu/~cshalizi/ADAfaEPoV/
E-Book will be permanently available even after print Book is published by Cambridge University Press.

April 17, 2016

Inventories and Cost of Goods Sold - Review Notes


Determining Cost (Accounting Value) of Inventory

Specific unit cost
 Mandated by AASB when inventory items differ (e.g. motor vehicles, jewellery)
 Average cost
 First-In, First-Out (FIFO)
 Oldest units sold first
 Last-In, First-Out (LIFO):

Calculate periodic inventory amounts under
FIFO, LIFO and average cost.

Journal Entry for Purchase of Inventory
January
Purchases (not inventory) 400
Accounts Payable (Cash) 400


FIFO

Beginning Inventory (1 @ 40)  = $40
Purchases (6 @ 45 + 7 @ 50)  = 620
Cost of goods available for sale (14 numbers)   =  660
Less: Ending Inventory (2 @ 50)   =   (100)
Cost of Sales  =  $560


LIFO
Beginning Inventory (1 @ 40)  =  $40
Purchases (6 @ 45 + 7 @ 50)   =  620
Cost of goods available for sale (14)  =  660

Cost of goods available for sale (14) =  660
Less: Ending Inventory  (1 @ 40 + 1 @ 45)  =  (85)
Cost of Sales  =   $575


Weighted Average
Beginning Inventory (1 @ 40)   =  $40
Purchases (6 @ 45 + 7 @ 50)  = 620
Cost of goods available for sale (14 @ 47 14) =  660 (14 @ 47.14)
Less: Ending Inventory (2 @ 47.14)  =  (94)
Cost of Sales  =   $566




Accounting Principles and Inventories

Several accounting principles affect inventories. Among them are consistency, disclosure, materiality, and accounting conservatism.


Consistency Principle

The consistency principle states that businesses should use the same accounting
methods from period to period. Consistency helps investors compare a company’s
financial statements from one period to the next.


Disclosure Principle

The disclosure principle holds that a company should report enough information
for outsiders to make wise decisions about the company. In short, the company
should report relevant, reliable, and comparable information about itself. This
includes disclosing the method being used to account for inventories. All major
accounting decisions are described in the footnotes to the financial statements.

Materiality Concept

The materiality concept states that a company must perform strictly proper accounting
only for significant items. Information is significant—or, in accounting terms, material—
when it would cause someone to change a decision. The materiality concept frees
accountants from having to report every last item in strict accordance with GAAP. For
example, $1,000 is material to a small business with annual sales of $100,000.
However, $1,000 isn’t material to a large company like Apple.


Accounting Conservatism

Conservatism in accounting means exercising caution in reporting items in the financial statements. Conservatism says,

● “Anticipate no gains, but provide for all probable losses.”
● “If in doubt, record an asset at the lowest reasonable amount and a liability at the highest reasonable amount.”
● “When there’s a question, record an expense rather than an asset.”
● “When you are faced with a decision between two options, you must choose the option that undervalues, rather than overvalues, your business.”

The goal of conservatism is to report realistic figures.

Lower-of-Cost-or-Market Rule
In addition to the FIFO, LIFO, and average costing methods, accounts must use the  the lower-of-cost-or-market rule (abbreviated as LCM).

LCM shows accounting conservatism in action and requires that inventory be reported in the financial statements at whichever is lower—
● the historical cost of the inventory, or
● the market value of the inventory.

For inventories, market value generally means the current replacement cost (that is, the cost to replace the inventory on hand). If the replacement cost of inventory is less than its historical cost, the business must adjust the inventory value. By adjusting the inventory down (crediting Inventory), the balance sheet value of the asset, Inventory, is at its correct value (market) rather than its overstated accounting value (cost).












Review Notes
Inventory Accounting
http://seattlecentral.edu/faculty/moneil/A210/L6/Horngren06.htm

Presentation slides

http://wps.prenhall.com/wps/media/objects/1838/1883037/powerpoints/ch_07.ppt

Financial, Cost and Management Accounting - Review Notes List

Updated 17 Apr 2016
8 Dec 2011

Long-Lived Assets and Depreciation - Review Notes

Measuring the Cost of a Plant Asset
The cost principle says to carry an asset at its historical cost—the amount paid for
the asset. The rule for measuring cost is as follows:
Measure the cost of a plant asset

Cost of an asset =
Sum of all the costs incurred to bring the asset
to its intended purpose, net of all discounts


Land and Land Improvements
The cost of land is not depreciated. It includes the following costs paid by the purchaser:
● Purchase price
● Brokerage commission
● Survey and legal fees
● Property taxes in arrears
● Taxes assessed to transfer the ownership (title) on the land
● Cost of clearing the land and removing unwanted buildings
The cost of land does not include the following costs:
● Fencing
● Paving
● Sprinkler systems
● Lighting
● Signs
These separate plant assets—called land improvements—are subject to
depreciation.


Measuring the Cost of Land
Purchase price of land ......................
Add related costs:
Property taxes in arrears...........
Transfer taxes...........................
Removal of building .................
Survey fee .................................
Total cost of land .............................

The cost of a plant asset is its purchase price plus taxes, purchase commissions, and
all other amounts paid to ready the asset for its intended use.



Buildings
The cost of a building depends on whether the company is constructing the building
itself or is buying an existing one. These costs include the following:

Constructing a Building
Architectural fees
Building permits
Contractor charges
Payments for material, labor, and overhead
Capitalized interest cost, if self-constructed


Purchasing an Existing Building

Purchase price
Costs to renovate the building to
ready the building for use, which
may include any of the charges listed
under “Constructing a Building”

Machinery and Equipment
The cost of machinery and equipment includes its
● purchase price (less any discounts),
● transportation charges,
● insurance while in transit,
● sales tax and other taxes,
● purchase commission,
● installation costs, and
● the cost of testing the asset before it is used.

After the asset is up and running, the company no longer debits the cost of insurance,
taxes, ordinary repairs, and maintenance to the Equipment account. From that
point on, insurance, taxes, repairs, and maintenance costs are recorded as expenses.


Furniture and Fixtures
Furniture and fixtures include desks, chairs, file cabinets, display racks, shelving,
and so forth. The cost of furniture and fixtures includes the basic cost of each asset
(less any discounts), plus all other costs to ready the asset for its intended use. For
example, for a desk, this may include the costs to ship the desk to the business and
the cost paid to a laborer to assemble the desk.

Capital Expenditures
Accountants divide spending made on plant assets into two categories:
● Capital expenditures
● Expenses
Capital expenditures are debited to an asset account because they
● increase the asset’s capacity or efficiency, or
● extend the asset’s useful life.
Examples of capital expenditures include the purchase price plus all the other costs
to bring an asset to its intended use, as discussed in the preceding sections. Also, an
extraordinary repair is a capital expenditure because it extends the asset’s capacity or
useful life.

Depreciation

depreciation is the allocation of a plant asset’s cost
to expense over its useful life. Depreciation distributes the asset’s cost over the time
(life) the asset is used. Depreciation matches the expense against the revenue generated
from using the asset to measure net income.

Measuring Depreciation
Depreciation of a plant asset is based on three main factors:
1. Capitalized cost
2. Estimated useful life
3. Estimated residual value
Capitalized cost is a known cost and, as mentioned earlier in this chapter,
includes all items spent for the asset to perform its intended function. The other two
factors are estimates.

Depreciation Methods
There are many depreciation methods for plant assets, but three are used most
commonly:
● Straight-line
● Units-of-production
● Declining-balance

Accounting for Research and Development
Costs
Research and development (R&D) costs are the lifeblood of companies such as Procter & Gamble, General Electric, Intel, and Boeing. In general, companies do not
report R&D assets on their balance sheets because GAAP requires companies to expense R&D costs as they are incurred.


Presentation slides

http://wps.prenhall.com/wps/media/objects/1838/1883037/powerpoints/ch_08.ppt



HBS Alumni excel tool on Depreciation methods
http://www.alumni.hbs.edu/new_alumni/toolkit/tools/depreciationcalculator.xls

Financial, Cost and Management Accounting - Review Notes List

Updated  17 Apr 2016

8 Dec 2011

Financial Accounting - Cost Accounting Revision Articles with Links


April Third Week (16 April 2016 - 19 April 2016)

Financial Accounting


Accounting: The Language of Business: http://nraomtr.blogspot.in/2011/12/accounting-language-of-business-review.html
Measuring Income to Assess Performance - Review Notes: http://nraomtr.blogspot.in/2011/12/measuring-income-to-assess-performance.html

Recording Transactions - Review Notes: http://nraomtr.blogspot.in/2011/12/recording-transactions-review-notes.html
Accrual Accounting and Financial Statements - Revision: http://nraomtr.blogspot.in/2011/12/accrual-accounting-and-financial_08.html


Accounting for Sales - Review Notes: http://nraomtr.blogspot.in/2011/12/accounting-for-sales-review-notes.html
Inventories and Cost of Goods Sold - Review Notes: http://nraomtr.blogspot.in/2011/12/inventories-and-cost-of-goods-sold.html

Long-Lived Assets and Depreciation - Review Notes: http://nraomtr.blogspot.in/2011/12/long-lived-assets-and-depreciation.html
Liabilities and Interest - Review Notes: http://nraomtr.blogspot.in/2011/12/liabilities-and-interest-review-notes.html

4th Week

22 April to 26 April 2016


Statement of Cash Flows - Review Notes: http://nraomtr.blogspot.in/2011/12/statement-of-cash-flows-review-notes.html

Financial Statement Analysis - Review Notes: http://nraomtr.blogspot.in/2011/12/financial-statement-analysis-review.html

Cost Accounting

21 April 2015
Role of Costing and Cost Accounting in the Organizations: http://nraomtr.blogspot.in/2011/12/role-of-costing-and-cost-accounting-in.html

Introduction to Cost Terms - Review Notes: http://nraomtr.blogspot.in/2011/12/introduction-to-cost-terms-review-notes.html
Traditional Cost Objectives and Their Utility: http://nraomtr.blogspot.in/2011/12/traditional-cost-objectives-and-their.html

Job Costing - Review Notes:http://nraomtr.blogspot.in/2011/12/job-costing-review-notes.html
Cost Allocation: Joint Products and By Products: http://nraomtr.blogspot.in/2011/12/cost-allocation-joint-products-and-by.html

Activity-Based Costing and Activity-Based Budgeting:http://nraomtr.blogspot.in/2011/12/activity-based-costing-and-activity.html
Process Costing - Review Notes: http://nraomtr.blogspot.in/2011/12/process-costing-review-notes.html


First Week  4 May to 8 May 2015


Cost Information for Pricing Decisions
Cost Behavior Analysis and Relevant Costs

Costing for Strategic Profitability Analysis
Cost Information for Customer Profitability Analysis

Costing for Spoilage, Rework and Scrap
Costing for Quality, Time and the Theory of Constraints

Costing for Inventory Management, JIT and Backflush
Cost Information and Analysis for Capital Budgeting

Cost Information for Management Control and Performance Control
Cost Information for Transfer Pricing

Second Week 11 May to 15 May 2015


Managerial Accounting or Management Accounting - Review Notes
Relevant Information and Decision Making - Marketing Decisions

Relevant Information and Decision Making - Production
Relevant Information and Decision Making - HR

The Master Budget - Accounting Information
Flexible Budgets and Variance Analysis - Review Notes

Responsibility Accounting for Management Control
Accounting Information for Management Control in Divisionalized Companies

Capital Budgeting - Accounting and Cost Information

Financial, Cost and Management Accounting - Review Notes List

Accounting for Sales - Review Notes

Revenue Recognition
•The timing of revenue recognition is important since itis critical to the measurement of income.

• Cash-basis
 –revenues are recognized when cash iscollected for goods or services.
• Accrual basis
 –recognition of revenue occurs at the point of sale
. Both IFRS and U.S. GAAP require the following two criteria be met for revenue recognition:
 –Revenue is earned–goods or services must bedelivered to the customer –Revenue is realized–cash or an asset virtually assuredto be converted into cash is received

Revenue Recognition
• Percentage of Completion Method
 –recognizes revenue on long term contracts as production occursand assigns the associated expenses to abide by thematching principle.
•US GAAP considers the usage of the methodappropriate only if:
 –the progress measures are dependable –contract obligations are explicit –both seller and the buyer are expected to meet their obligations.
•IFRS is not that specific with these requirements

Cash and Credit Sales Revenue
•Revenue is recorded at the present cash value of the asset received.

Sales Returns
• Sales Returns
-previously purchasedmerchandise returned to the seller for any reason

Sales Allowances
• Sales Allowance
 –reduction of the originalselling price mostly to settle customercomplaints

Cash and Trade Discounts
• Trade discounts
 –reductions to the gross salesprice for a particular class of customers or fordiffering order sizes.
• Cash discounts
 –reductions of invoice pricesfor prompt payment; rewards extended to thecustomers

Some Cash Discount Terms
• n/30
 –The full billed price (net price) due in 30days after the invoice date.•
15 E.O.M
. –The full price is due within 15 daysafter the end of the month of sale.•
2/10/n30
 –2% off invoice price, if paid within 10days of invoice date; net amount due in 30 daysafter invoice date.

Uncollectible Accounts
•Two methods to measure uncollectible accounts
 –
Specific Write-off Method
: assumes all receivablesare collectable until proven otherwise; is used bycompanies that rarely experience bad debts; writes-off the specific receivable when it is apparent that itwill not be collected.
•Pros: less costly, Cons: violates the matchingprinciple. –
Allowance method
: estimates the amount ofuncollectible accounts at year end; net income andreceivables are reduced to reflect potentialuncollectible accounts.
•Pros: better matching, Cons: prone tomanipulations

Assessing Accounts Receivable
•Cash sales produce cash instantly
•Credit sales generally cause sales to increasebut they also delay cash receipts.
 –Major credit cards
•Just a few days before credit card companytransfers cash to the company
•Some treat these receivables as cash equivalents –Company credit cards –using last year’s data
•How long did it take to collect receivables
•Is that length of time acceptable?






Review Notes  -  Merchandising Operations (Sales)
http://seattlecentral.edu/faculty/moneil/A210/L5/Horngren05.htm

Presentation slides

http://wps.prenhall.com/wps/media/objects/1838/1883037/powerpoints/ch_06.ppt

Financial, Cost and Management Accounting - Review Notes List


Updated 17 Apr 2016
8 Dec 2011

April 16, 2016

Measuring Income to Assess Performance - Review Notes

Measuring Income


Income is a measure of the increase in the “wealth” of an entity over a period of time.

Accountants have agreed on a common set of rules for measuring income and wealth.

Income is generated primarily through the operating cycle.

Operating cycle –average time taken by a firm in converting merchandize or raw material back into cash

•Income –key measure of performance and value; measure of increase in wealth over a
period of time

 –Calendar year vs. Fiscal year Operating cycle –average time taken by a firm inconverting merchandize or raw material back intocash

About 40% of large companies use a fiscal year that differs from a calendar year


Interim reports

Companies also prepare financial statements for interim periods
Interim periods may be for a month or a quarter (3-month period)



Measuring Income

Revenues
 –are increases in assets received inexchange for the delivery of goods or services to customers. Revenues increase owners' equity.•
Expenses
 –are decreases in assets as a result of goods or services being delivered to customers. Expenses decrease owners' equity.

Income
(profit, earnings) – excess of revenues over expenses in a reporting period.

Retained Earnings
 –total cumulative owners’equity generated by income or profits

Measuring Income

Cash Basis
 –revenues are recognized when a company receives cash and expenses are recognized when a company pays cash.
 –Ignores activities that increase or decrease assets other than cash

Accrual Basis
 –revenues are recorded as they are earned and expenses are recorded as they are incurred, regardless whether cash changes hands.
 –Ignores that a company can go bankrupt if it does not manage its cash properly, no matter how well it seems to be doing according to the other financial statements

Revenues Recognition
•Criteria to recognize revenues:
 –
Revenues must be earned -
All (or substantially all)of the goods or services the customer wants have been delivered to and accepted by customers –
Revenues must be realized or realizable -
Cash or a formal promise by the customer to pay cash hasbeen received for the goods or services delivered


Matching

Matching
 –the process of recognizing and recording expenses in the same period the related revenues are recognized.

• Product costs
 –are linked with productrevenues earned in that period (e.g. cost ofgoods, commissions, etc).•

Period costs
 –are linked to a period of timeitself and are recorded in the period incurred(e.g. rent, admin. salaries, etc.)

Depreciation is the systematic allocation of the acquisition cost of long-lived assets to the periods that benefit from the use of the assets.

Land is not subject to depreciation because it does not deteriorate over time


Expanded Balance Sheet Equation

(1) Assets    =    Liabilities   +   Stockholders’ Equity

(2) Assets    =    Liabilities   +   Paid-in Capital  +  Retained Earnings

(3) Assets    =    Liabilities   +   Paid-in Capital  +  Revenues - Expenses








Review Notes

http://seattlecentral.edu/faculty/moneil/A210/L2/Horngren02.htm

Presentation slides

http://wps.prenhall.com/wps/media/objects/1838/1883037/powerpoints/ch_02.ppt


Financial, Cost and Management Accounting - Review Notes List


Updated  16 April 2016

Statement of Cash Flows - Review Notes

The statement of cash flows reports cash flows—cash receipts and cash payments. It
● shows where cash came from (receipts) and how cash was spent (payments).
● reports why cash increased or decreased during the period.
● covers a span of time and is dated the same as the income statement

The statement of cash flows explains why net income as reported on the income statement does not equal the change in the cash balance. In essence, the cash flow statement is the communicating link between the accrual based income statement and the cash reported on the balance sheet.

The statement of cash flows helps
1. predict future cash flows. Past cash receipts and payments help predict future cash flows.
2. evaluate management decisions. Wise investment decisions help the business prosper, while unwise decisions cause the business to have problems. Investors and creditors use cash flow information to evaluate managers’ decisions.
3. predict ability to pay debts and dividends. Lenders want to know whether they will collect on their loans. Stockholders want dividends on their investments. The statement of cash flows helps make these predictions.

Cash Equivalents

On a statement of cash flows, Cash means cash on hand and cash in the bank, and  cash equivalents, which are highly liquid investments that can be converted into cash in three months or less. As the name implies, cash equivalents are so close to cash that they are treated as “equals.” Examples of cash equivalents are money-market accounts and investments in U.S. government securities.

Operating, Investing, and Financing Activities

There are three basic types of cash flow activities, and the statement of cash flows has a section for each:

● Operating activities
● Investing activities
● Financing activities

Each section reports cash flows coming into the company and cash flows going out of the company based on these three divisions.

Operating Activities
● Is the most important category of cash flows because it reflects the day-to-day operations that determine the future of an organization
● Generate revenues, expenses, gains, and losses
● Affect net income on the income statement
● Affect current assets and current liabilities on the balance sheet Investing Activities
● Increase and decrease long-term assets, such as computers, software, land, buildings, and equipment
● Include purchases and sales of these assets, plus long-term loans receivable from others (non-trade) and collections of those loans
● Include purchases and sales of long-term investments

Financing Activities
● Increase and decrease long-term liabilities and equity
● Include issuing stock, paying dividends, and buying and selling treasury stock
● Include borrowing money and paying off loans

Two Formats for Operating Activities

There are two ways to format operating activities on the statement of cash flows:
● The indirect method starts with net income and adjusts it to net cash provided by
operating activities.
● The direct method restates the income statement in terms of cash. The direct method shows all the cash receipts and all the cash payments from operating activities.

The indirect and direct methods
● use different computations but produce the same amount of cash flow from operations.
● present investing activities and financing activities in exactly the same format. Only the operating activities section is presented differently between the two methods.


Cash Flows from Operating Activities - Indirect Method

Operating cash flows begin with net income, taken from the income statement.

A. Net Income

The statement of cash flows—indirect method—begins with net income (or net loss) because revenues and expenses, which affect net income, produce cash receipts and cash payments. Revenues bring in cash receipts, and expenses must be paid. But net income as shown on the income statement is accrual based and the cash flows (cash basis net income) do not always equal the accrual basis revenues and expenses. For example, sales on account generate revenues that increase net income, but the company has not yet collected cash from those sales. Accrued expenses decrease net income, but the company has not paid cash if the expenses are accrued.

To go from net income to cash flow from operations, we must make some adjustments to net income on the statement of cash flows. These additions and subtractions follow net income and are labeled Adjustments to reconcile net income to net cash provided by operating activities.


B. Depreciation, Depletion, and Amortization Expenses

These expenses are added back to net income to reconcile from net income to cash flow from operations.

Depreciation does not affect cash because there is no Cash account in the journal entry. Depreciation is a noncash expense. However, depreciation, like all the other expenses, decreases net income. Therefore, to go from net income to cash flows, we must remove depreciation by adding it back to net income.

C. Gains and Losses on the Sale of Assets

Sales of long-term assets such as land and buildings are investing activities, and these sales usually create a gain or a loss. The gain or loss is included in net income, which is already in the operating section of the cash flow statement. The gain or loss must be removed from net income on the statement of cash flows so the total cash from the sale of the asset can be shown in the investing section.

A loss on the sale of plant assets would make net income smaller, so it would be added back to net income.

Changes in the Current Assets and the Current Liabilities

Most current assets and current liabilities result from operating activities. For example,
● accounts receivable result from sales,
● inventory relates to cost of goods sold, and so on.


Changes in the current accounts create adjustments to net income on the cash flow statement, as follows:
1. An increase in a current asset other than cash causes a decrease in cash. If Accounts receivable, Inventory, or Prepaid expenses increased, then cash decreased. Therefore, we subtract the increase in the current asset from net income to get cash flow from operations.



Cash Flows from Investing Activities

Investing activities affect long-term assets, such as Plant assets and Investments.

Cash Flows from Financing Activities

Financing activities affect the liability and owners’ equity accounts, such as Longterm
notes payable, Bonds payable, Common stock, and Retained earnings.

Computing Issuances and Payments of Long-Term Notes Payable

The beginning and ending balances of Notes payable or Bonds payable are taken
from the balance sheet. If either the amount of new issuances or payments is known,
the other amount can be computed.

Computing Issuances of Stock and Purchases of Treasury Stock

Cash flows for these financing activities can be determined by analyzing the stock
accounts. For example, the amount of a new issuance of common stock is determined
by analyzing the Common stock account.

Computing Dividend Payments

The amount of dividend payments can be computed by analyzing the Retained earnings
account.


Excerpts from
Financial and Management Accounting,
Horngren



Review Notes
http://seattlecentral.edu/faculty/moneil/A220/L18/Horngren16.htm


Presentation slides

http://wps.prenhall.com/wps/media/objects/1838/1883037/powerpoints/ch_05.ppt

Slides of the chapter from another source
http://wenku.baidu.com/view/149a6a7d5acfa1c7aa00ccd3.html

Financial, Cost and Management Accounting - Review Notes List

Updated  16 April 2016
8 Dec 2011

April 10, 2016

Pricing and Revenue Management in the Supply Chain

Chopra and Meindl's book, Supply Chain Management: Strategy, Planning, and Operation, is a comprehensive introduction on supply chain management.

Role of Pricing and Revenue Management in a Supply Chain

Pricing is an important lever to increase supply chain profits by better matching supply and demand. Revenue management is the use of pricing to increase the profit generated from currently limited  supply chain assets. Ideas from revenue management suggest that a firm should first use pricing to achieve some balance between supply and demand and only then invest in or eliminate assets. Supply chain assets exist in two forms, capacity and inventory. Capacity assets in the supply chain exist for production, transportation, and storage while inventory assets exist throughout the supply chain and are carried to improve product availability.

Low priced carriers were initially very successful in their operations. But once, the regular airlines offered low fares as part of their pricing and revenue management, the capacity utilization of low priced carriers became low and some of them went out of business.

Revenue management also could be defined as the use of differential pricing based on customer segment, time of use and product or capacity availability to increase supply chain surplus.


Revenue management has a significant impact on supply chain profitability when one or more of the following conditions exist:
–     The value of the product varies in different market segments
–     The product is highly perishable or product wastage occurs
–      Demand has seasonal and other peaks
–      The product is sold both in bulk and the spot market

Revenue management technique has been successfully applied to airline, railway, hotel and resort, cruise ship, health care, printing and publishing. Revenue management has considerable potential for manufacturing operations as well.

Revenue Management for Multiple Customer Segments

            Airline seats are good example of market with multiple customer segments. Airline use advance purchase facility at lower rates to segment its customer into different fare classes and dynamically adjust their seat capacity assigned to those fare classes as advance sales orders arrive. For instance business travelers are willing to pay a higher fare to travel a specific schedule for convenience and even order at the last minute, while leisure travelers are willing to shift their schedule to take advantage of lower fares.

            There are two fundamental issues than must be handled to apply the concept of revenue management. First, how to differentiate between two segments and structure its pricing to make one segment pay more than the other. Second, how much to cater to lower price demand.

            To differentiate between various segments, the firm must create by identifying product or services attributes that segments value differently. For example, business travelers on an airline want to book at the last minute and only stay just as long as they must. In other hand leisure travelers are willing to book far in advance and adjust the duration of stay.  Thus the flexibility on booking and schedule differentiate the business travelers from leisure travelers. For transportation provider the segment can be differentiated based on how far in advance a customer is willing to commit and pay for transportation capacity. Similar separation can also occur for production and storage-related assets in supply chain.

            The basic trade-off here is between committing to an order from a lower price or waiting for a high price to arrive later on. The risks in such situation are spoilage and spill. Spoilage occurs when capacity is wasted because demand from high price doesn’t materialize. Spill occurs if higher price segments have to be refused because capacity has already been committed to lower price segment. A current order from a lower price should be compared to expected revenue from waiting for a higher price buyer and order from lower price buyer should be accepted if the expected revenue from higher price is lower than the current revenue from the lower price buyer. Firms can keep asking lower price customers to change their schedule with giving further discount when they shift to a different time slot.

         
            Another approach to differential pricing is to create different versions of product targeted at different segments. An automobile manufacturer create a high-end, a mid-level and low-end versions of the most popular models based on the options provided. This policy allows them to charge differential price from different segment for the same core product.

            To successfully use revenue management when serving multiple customer segments, a firm must use the following tactics effectively:

Price based on the value assigned by each segment
Use different price for each segment
Forecast at the segment level
       
Revenue Management for Perishable Assets

Any asset that loses value over time is perishable.  Fruits, vegetables and pharmaceuticals are perishable.  Perishable assets also include products such computer, cell phone, fashion apparel that lose value as new model introduce. There are two revenue management tactics used for perishable assets:
–   Vary price over time to maximize expected revenue
–   Overbook sales of the assets to account for cancellations

The first tactic is suitable for assets such as fashion apparel that have clear date beyond which they lose a lot of their value, apparel designed for certain season doesn’t have much value in the end of the season. The retailer must use effective pricing strategy and forecast impact of price on customer demand to increase total profit. The trade-off here is charge a high price initially and leaving more products to be sold later at lower price or charge a not so high price initially, selling more products  in the season and leaving fewer products to be sold at a discount.

The second tactic is suitable if customers are able to cancel orders and the value of asset drops significantly after deadline. Airline seats, product designed specially for Christmas, and production capacity at a supplier are examples of this asset.

The trade-off is between having wasted capacity because excessive cancellation or having a shortage of capacity because of few cancellations, in that case an expensive backup needs to be arranged. The goal of overbooking is to maximize supply chain profit by minimizing the cost of wasted capacity and the cost of capacity shortage.


The optimal overbooking level should increase as the margin per unit increases and the level of overbooking should decrease ad the cost of replacement capacity goes up. The use of overbooking will increase asset utilization by the customers.

Revenue Management for Seasonal Demand

One of purposes the use revenue management for seasonal demand is to shift demand from the peak to the off-peak period, thus can get better balance between supply and demand, and also generate higher overall profit.

The common and effective revenue management tactic to deal with seasonal demand is to charge higher price during peak period and a lower price during off-peak periods, this tactic result in shifting demand from peak to off-peak period. Some company offer discount and other benefits to encourage customers to shift their demand to off-peak period, one example is Amazon.com that has peak period in December, bringing in short-term capacity is expensive and decrease profit margin. Amazon.com offer discount and free shipping for order that are placed in November, this strategy reduce demand in the peak season and generate a higher profit for Amazon.com.

Revenue Management for Bulk and Spot Customers

            The fundamental trade-off here is similar to the case revenue management for multiple customer segments. The firm needs to decide on the amount of the asset to reserve for spot market (higher price). The reserved quantity will be affected by difference in margin between the spot market and the bulk sale and also the distribution of demand from the spot market.

            A similar decision needs to be made by purchaser of production, warehousing and transportation assets. The trade-off is between sign on long-term bulk contract with a fixed, lower price but can be wasted if not utilized or buy in the spot market with higher price but never being wasted. The basic decision is the size of the bulk contract.


Conclusion

            Revenue management is using differential pricing based on customer segments, time of use, and product or capacity availability to increase supply chain profit. Revenue management involves marketing, finance, and operation function to maximize overall profit.

            Revenue management can be very effective if one or more conditions occur: value varies in different market segments, product is perishable, demand has seasonal peak and product can be bought either in bulk or in spot market.

            Evaluating  market, understanding customer behavior and preference, and implementing forecasting process are the important things should be done to be successfully use revenue management.

            Airline, railway, hotel and resort, cruise ship, health care, printing and publishing, electricity utility, car rental, broadcasting advertising, entertainment and telecommunication industries are examples of industries that have successfully used revenue management to boost their profits.

References

•   Sunil Chopra, Peter Meindle. Supply Chain Management  –  strategy, planning and operation. Pearson Prentice Hall

Updated 10 Apr 2016,
9 Dec 2011


April 5, 2016

The Value of Information in Supply Chain Management

Summary of Chapter 5 of Simchi Levy


The Value of Information
5.1 Introduction
Value of using any type of information technology
Potential availability of more and more information throughout the supply chain
Implications this availability on effective design and management of the integrated supply chain


Information Types
Inventory levels
Orders
Production
Delivery status


More Information

Helps reduce variability in the supply chain.
Helps suppliers make better forecasts, accounting for promotions and market changes.
Enables the coordination of manufacturing and distribution systems and strategies.
Enables retailers to better serve their customers by offering tools for locating desired items.
Enables retailers to react and adapt to supply problems more rapidly.
Enables lead time reductions.


Helps reduce variability in the supply chain.

5.2 Bullwhip Effect
While customer demand for specific products does not vary much
Inventory and back-order levels fluctuate considerably across their supply chain
P&G’s disposable diapers case
Sales quite flat
Distributor orders fluctuate more than retail sales
Supplier orders fluctuate even more

4-Stage Supply Chain
Effect of Order Variability
Factors that Contribute to the Variability - Demand Forecasting
Periodic review policy
Characterized by a single parameter, the base-stock level.
Base-stock level =
Average demand during lead time and review period +
a multiple of the standard deviation of demand during lead time and review period (safety stock)
Estimation of average demand and demand variability done using standard forecast smoothing techniques.
Estimates get modified as more data becomes available
Safety stock and base-stock level depends on these estimates
Order quantities are changed accordingly increasing variability
Factors that Contribute to the Variability – Lead Time
Increase in variability magnified with increasing lead time.
Safety stock and base-stock levels have a lead time component in their estimations.
With longer lead times:
a small change in the estimate of demand variability implies
a significant change in safety stock and base-stock level, which implies
significant changes in order quantities
leads to an increase in variability

Factors that Contribute to the Variability – Batch Ordering
Retailer uses batch ordering, as with a (Q,R)  or a min-max policy
Wholesaler observes a large order, followed by several periods of no orders, followed by another large order, and so on.
Wholesaler sees a distorted and highly variable pattern of orders.
Such pattern is also a result of:
Transportation discounts with large orders
Periodic sales quotas/incentives
Factors that Contribute to the Variability – Price Fluctuations
Retailers often attempt to stock up when prices are lower.
Accentuated by promotions and discounts at certain times or for certain quantities.
Such Forward Buying results in:
Large order during the discounts
Relatively small orders at other time periods
Factors that Contribute to the Variability – Inflated Orders
Inflated orders during shortage periods
Common when retailers and distributors suspect that a product will be in short supply and therefore anticipate receiving supply proportional to the amount ordered.
After period of shortage, retailer goes back to its standard orders
leads to all kinds of distortions and variations in demand estimates


When p is large and L is small, the bullwhip effect is negligible.
Effect is magnified as we increase the lead time and decrease p.

Impact of Centralized Information on  Bullwhip Effect

Centralize demand information within a supply chain
Provide each stage of supply chain with complete information on the actual customer demand
Creates more accurate forecasts rather than orders received from the previous stage

Variability with Centralized Information
Var(D), variance of the customer demand seen by the retailer
Var(Qk), variance of the orders placed by the kth stage to its
Li, lead time between stage i and stage i + 1



Variance of the orders placed by a given stage of a supply chain is an increasing function of the total lead time between that stage and the retailer
Variability with Decentralized Information
Retailer does not make its forecast information available to the remainder of the supply chain
Other stages have to use the order information


Variance of the orders:
becomes larger up the supply chain
increases multiplicatively at each stage of the supply chain.
Managerial Insights
Variance increases up the supply chain in both centralized and decentralized cases
Variance increases:
Additively with centralized case
Multiplicatively with decentralized case
Centralizing demand information can significantly reduce the bullwhip effect
Although not eliminate it completely!!
Increase in Variability for Centralized and Decentralized Systems
Methods for Coping with the Bullwhip
Reducing uncertainty. Centralizing information

Reducing variability.
Reducing variability inherent in the customer demand process.
“Everyday low pricing” (EDLP) strategy.

Methods for Coping with the Bullwhip
Lead-time reduction
Lead times magnify the increase in variability due to demand forecasting.
Two components of lead times:
order lead times [can be reduced through the use of cross-docking]
Information lead times [can be reduced through the use of electronic data interchange (EDI).]
Strategic partnerships
Changing the way information is shared and inventory is managed
Vendor managed inventory (VMI)
Manufacturer manages the inventory of its product at the retailer outlet
VMI the manufacturer does not rely on the orders placed by a retailer, thus avoiding the bullwhip effect entirely.



5.3 Information Sharing And Incentives

Centralizing information will reduce variability
Upstream stages would benefit more
Unfortunately, information sharing is a problem in many industries
Inflated forecasts are a reality
Forecast information is inaccurate and distorted
Forecasts inflated such that suppliers build capacity
Suppliers may ignore the forecasts totally
Contractual Incentives to Get True Forecasts from Buyers
Capacity Reservation Contract
Buyer pays to reserve a certain level of capacity at the supplier
A menu of prices for different capacity reservations provided by supplier
Buyer signals true forecast by reserving a specific capacity level
Advance Purchase Contract
Supplier charges special price before building capacity
When demand is realized, price charged is different
Buyer’s commitment to paying the special price reveals the buyer’s true forecast


Helps suppliers make better forecasts, accounting for promotions and market changes.



5.4 Effective Forecasts
Retailer forecasts
Typically based on an analysis of previous sales at the retailer.
Future customer demand influenced by pricing, promotions, and release of new products.
Including such information will make forecasts more accurate.
Distributor and manufacturer forecasts
Influenced by factors under retailer control.
Promotions or pricing.
Retailer may introduce new products into the stores
Closer to actual sales – may have more information
Cooperative forecasting systems
Sophisticated information systems
iterative forecasting process
all participants in the supply chain collaborate to arrive at an agreed-upon forecast
All parties share and use the same forecasting tool



5.5 Information for the Coordination of Systems
Many interconnected systems
manufacturing, storage, transportation, and retail systems
the outputs from one system within the supply chain are the inputs to the next system
trying to find the best set of trade-offs for any one stage isn’t sufficient.
need to consider the entire system and coordinate decisions
Systems are not coordinated
each facility in the supply chain does what is best for that facility
the result is local optimization.
Global Optimization
Issues:
Who will optimize?
How will the savings obtained through the coordinated strategy be split between the different supply chain facilities?
Methods to address issues:
Supply contracts
Strategic partnerships

5.6 Locating Desired Products
Meet customer demand from available retailer inventory
What if the item is not in stock at the retailer?
Being able to locate and deliver goods is sometimes as effective as having them in stock
If the item is available at the competitor, then this is a problem
Other Methods
Inventory pooling (Chapter 7)
Distributor Integration (Chapter 8)


5.7 Lead-Time Reduction
Numerous benefits:
The ability to quickly fill customer orders that can’t be filled from stock.
Reduction in the bullwhip effect.
More accurate forecasts due to a decreased forecast horizon.
Reduction in finished goods inventory levels
Many firms actively look for suppliers with shorter lead times
Many potential customers consider lead time a very important criterion for vendor selection.
Much of the manufacturing revolution of the past 20 years led to reduced lead times
Other methods:
Distribution network designs (Chapter 6)
Effective information systems (e.g., EDI)
Strategic partnering (Chapter 8) (Sharing point-of-sale (POS) data with supplier)



5.8 Information and Supply Chain Trade-Offs
Conflicting objectives in the supply chains
Designing the supply chain with conflicting goals
Wish-Lists of the Different Stages
Raw material suppliers
Stable volume requirements and little variation in mix
Flexible delivery times
Large volume demands
Manufacturing
High productivity through production efficiencies and low production costs
Known future demand pattern with little variability.
Materials, warehousing, and outbound logistics
Minimizing transportation costs through: quantity discounts, minimizing inventory levels, quickly replenishing stock.
Retailers
Short order lead times and efficient, accurate order delivery
Customers
In-stock items, enormous variety, and low prices.
Trade-Offs: Inventory-Lot Size
Manufacturers would like to have large lot sizes.
Per unit setup costs are reduced
Manufacturing expertise for a particular product increases
Processes are easier to control.
Modern practices [Setup time reduction, Kanban and CONWIP]
Reduce inventories and improve system responsiveness.
Advanced manufacturing systems make it possible for manufacturers to meet shorter lead times and respond more rapidly to customer needs.
Manufacturer should have as much time as possible to react to the needs of downstream supply chain members.
Distributors/retailers can have factory status and manufacturer inventory data:
they can quote lead times to customers more accurately.
develops an understanding of, and confidence in, the manufacturers’ ability.
allows reduction in inventory in anticipation of manufacturing problems
Trade-offs Inventory-Transportation Costs
Company operates its own fleet of trucks.
Fixed cost of operation + variable cost
Carrying full truckloads minimizes transportation costs.
Outside firm is used for shipping
quantity discounts
TL shipping cheaper than LTL shipping
In many cases
demand is much less than TL
Items sit for a long time before consumption leading to higher inventory costs.
Trade-off can’t be eliminated completely.
Use advanced information technology to reduce this effect.
Distribution control systems allow combining shipments of different products from warehouses to stores
Cross-docking,
Decision-support systems allow appropriate balance between transportation and inventory costs
Trade-offs Lead Time-Transportation Costs
Transportation costs lowest when large quantities of items are transported between stages of the supply chain.
Hold items to accumulate enough to combine shipments
Lead times can be reduced if items are transported immediately after they are manufactured or arrive from suppliers.
Cannot be completely eliminated
Information can be used to reduce its effect.
Control transportation costs reducing the need to hold items until a sufficient number accumulate.
Improved forecasting techniques and information systems reduce the other components of lead time
may not be essential to reduce the transportation component.
Trade-Offs Product Variety-Inventory
Higher product variety makes supply chain decisions more complex
Better for meeting customer demand
Typically leads to higher inventories
Strategies:
Delayed Differentiation (Chapter 6)
Ship generic products as far as possible down the supply chain
Design for logistics (Chapter 11)

Trade-Offs Cost-Customer Service
Reducing inventories, manufacturing costs, and transportation costs typically comes at the expense of customer service
Customer service could mean the ability of a retailer to meet a customer’s demand quickly
Strategies:
transshipping
direct shipping from warehouses to customers
Charging price premiums for customized products


5.9 Decreasing Marginal Value of Information

Obtaining and sharing information is not free.
Many firms are struggling with exactly how to use the data they collect through loyalty programs, RFID readers, and so on.
Cost of exchanging information versus the benefit of doing so.
May not be necessary to exchange all of the available information, or to exchange information continuously.
Decreasing marginal value of additional information
In multi-stage decentralized manufacturing supply chains many of the performance benefits of detailed information sharing can be achieved if only a small amount of information is exchanged between supply chain participants.
Exchanging more detailed information or more frequent information is costly.
Understand the costs and benefits of particular pieces of information
How often this information is collected
How much of this information needs to be stored
How much of this information needs to be shared
In what form it needs to shared







April 2, 2016

What is Supply Chain Management? - SCM - Tweet Point Lecture

#SCMTP A supply chain consists of all stages involved  in fulfilling a customer request for a product http://goo.gl/HFQbcE

#SCMTP In a supply chain there is constant flow of information, product and funds between stages. http://goo.gl/HFQbcE

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#SCMTP Supply Chain Flows Planning: Planning for an year, annual flow of goods based on demand and seasonality http://goo.gl/HFQbcE

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#SCMTP Decision 1. What to  outsource? http://goo.gl/HFQbcE
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#SCMTP What is Supply Chain Management. Tweet Lecture completed  http://goo.gl/HFQbcE