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Lecture

January 09 2014 bu247.docx

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Department
Business
Course
BU247
Professor
Esther Maier
Semester
Winter

Description
January 09, 2013 Plan Strategy mission Environmental scanning pestel Political Economic (incentives put in place) Social Technological (new type of smart phone for example to dominate the other technology) Environmental Legal (issues encountered with customers) forecasting -cost, revenues and profits (take information from internal and external environment) Budget  financial translation of the strategy Do Implementing Strategy -financial and non financial -measures, to help -Better decisions -improve processes -customer -delivering, marketing and selling *responding to customer Check Monitoring + measuring performance -costs of products/ product line (Or service) *comparing to plan Act -Reallocate resources -improve processes  quality Case page 12 Julie Martinez Employee • customers students o times for standard jobs o set expectation for customers o inventory/ stock type of jobs o feedback  customer cards (surveys) Julie Martinez • customer satisfaction (more aggregate information) • product line profitability o per product/ service o daily report • timeliness of orders • sales patterns (that would affect the amount of staff needed) o time of day (staffing) CEO • profitability/ - monthly • benchmarking o see what the competitors are doing (KINKOS or Similar company)  pricing  quality Variable Cost • A cost that changes in direct proportion to changes in the activity level of some variable • The variable is called a Cost Driver (most expensive cost to produce the product, for example labour or the type of material) Variable cost = variable cost per unit of the cost driver x cost driver units Fixed Cost • A cost that does not vary in the short run with a specific activity • The defining characteristic of fixed costs is that it depends on the amount of a resource that is acquired rather than amount used • Fixed costs are often called Capacity-Related costs *for example the fixed cell phone bill per month = fixed cost *any other service that you exceed is variable Mixed Cost—a cost that has variable and fixed components Step Variable Cost—a variable cost that increases in steps as the quantity increases Incremental Cost—the cost of the next unit of production Sunk cost—a cost that results from a previous commitment and cannot be recovered *for example bought the machines a long time and want to buy a new one therefore the money used to buy the old machine = sunk cost Relevant Cost—a cost that will change as a result of a decision Opportunity Cost—the maximum value forgone when a course of action is chosen *what you give up to make that “order or production for the customer” Avoidable Cost—a cost that can be avoided by taking a specific course of action Problem 2 -23 A Salaries of production supervisors Fixed B Steel used in automobile production
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