Notes, summaries, assignments, exams, and problems for Economy

Supply Chain and Logistics Fundamentals

The movement of materials, work-in-process inventory, and finished goods from the point of origin to the point of consumption involves interconnected networks. These interlinked networks, channels, and node businesses combine to provide the products and services required by end customers within a supply chain.

Core Components of Logistics

Logistics involves several key functions and processes:

• Purchasing raw materials and component parts (procurement): This includes managing the bargaining power of suppliers; companies might produce their own components or lease them.
• Managing inventory
• Packaging products
• Getting products to customers

Understanding Inventory Categories

Inventory consists of all raw materials,... Continue reading "Supply Chain Management and Inventory Control Essentials" »

Basis Property Acquired as Gift

If donor ABFMV, then dual basis applies (1 gain basis & 1 loss basis). Where GB=DonorAB & LB=FMV prop. If sellpr>DonorAB D1EAB=DonorAB @ date of gift. If sellpr,

Scott has decided to dispose of these assets that he received as a gift. Compute his realized & recognized g/l on these disposals: a. In 2000, he received stock with a FMV of 88k. The donor’s AB was 100k. He sells the stock for 72k this year. Gain basis=100k Loss basis=88k Amtreal=72k-Lossbasis88k=(12k) RecogL.

In 2001, he received land with FMV of 42k. The donor’s AB was 50k. He sells the land this year for 45k. Since sellpr b/w AB & FMV. No g/l permitted.

Nicky receives a car from Sam as a gift. Sam paid 48k for the car. He had... Continue reading "Tax Implications of Property Disposal and Exchange" »

In recent years, improvements in the healthcare sector and better living standards have enabled people to live longer and contribute more significantly to a nation's economic progress than in the past. While some view this as an entirely positive development, others highlight the potential drawbacks of working beyond the traditional retirement age.

Benefits of Extending Your Career

Delaying retirement enables individuals to contribute actively to society. On a personal level, working past retirement age provides an avenue for individuals to remain both physically and mentally active. Moreover, this option empowers the ageing population to be:

• Financially independent
• Economically self-sustainable

In countries with a growing ageing population, such... Continue reading "The Impact of Working Beyond Retirement Age" »

Unique Selling Proposition (USP)

A Unique Selling Proposition (USP) is the attribute or characteristic that makes a business special and differentiates it from the competition in the minds of customers.

External Stakeholders

External stakeholders include:

• Local community – e.g., local farmers, herders, and villagers.
• Government – e.g., central and regional.

Target Profit Formula

The target profit formula is:

Target Profit Quantity = (Fixed Cost + Target Profit) / (Price - Variable cost per unit)

Example: (800,000 + 400,000) / (10,000 - 5,000) = 240 trekkers

Impact of Changes in 2014

In 2014, the following changes occurred:

• Annual fixed costs increased by 20%.
• Rising fuel costs of flights increased average variable costs by 40% per trekker.
• The average

Drivers of Globalization

1. Trade and Transactions

The rise of free trade agreements and the elimination of barriers like tariffs have fueled global trade. The mutual recognition market ensures the acceptance of goods across borders, leading to increased cross-border trade, manufactured goods, and multinational corporations.

2. Capital and Investments

Foreign investment has shifted significantly, with a decrease from 65% of the world's GDP in 1991 to 30% in 2006. There's a growing trend of investments in developing countries like those in Africa. For example, Santander generates 25% of its business in Brazil.

3. Migration

Global migration has seen a dramatic increase from 78 million people in 1975 to 2 billion in 2005. Migrant remittances play a... Continue reading "Globalization: Drivers, Impacts, and Paradoxes" »

-External Analysis: To detect Opportunities and Threats - Internal Analysis: To discover Strengths and weaknesses.

PEST Analysis

Strategic business tool used by organizations to discover, evaluate, organize, and track macro-economic factors which can impact their business now and in the future. The framework examines opportunities and threats due to:

• Political
• Economic
• Social
• Technological forces

SWOT Analysis

Understanding TODAY TO BUILD A BETTER TOMORROW! It should be placed at the beginning of a project to begin the process of decision-making. SWOT analysis is the first stage in the planning process for a business venture or to measure almost anything that is influenced by internal and external factors.

• Strengths - Internal Factor +, favorable when

1 - In the Five Force Model: Factors Influencing Existing Competition

1. The degree of existing rivalry - Determined by number of firms, relative size, degree of differentiation between firms, demand conditions, exit barriers.
2. Threat of potential entrants - Determined by attractiveness of industry, height of entry barriers (e.g., start-up costs, brand loyalty, regulation, etc.)
3. Bargaining power of suppliers -Determined by number of suppliers and their degree of differentiation, the portion of a firm's inputs obtained from a particular supplier, the portion of a supplier's sales sold to a particular firm, switching costs, and potential for vertical integration.
4. Bargaining power of buyers - Determined by number of buyers, the firm's degree of differentiation,

Drivers of International Expansion

Push Factors

• Domestic market maturity or saturation
• Legal restrictions
• Increasing costs
• Unfavorable economic conditions
• Unfavorable demographic changes

Pull Factors

• Corporate philosophy
• Perception of growth opportunities
• Niche opportunities
• Imitation of competitors
• Following the customers
• Technology acquisition

Facilitating Factors

• Accumulation of experience
• Decreasing barriers to international trade
• Enhanced communication technologies
• Managers’ drive and vision
• Learning from other firms’ experience

International Entry Modes

Exporting

Indirect Export

• Foreign buyer/broker:
  • Advantages: Simple and cheap; does not require experience.
  • Disadvantages: Total lack of control over marketing strategies and market selection.
• Independent agents,

Understanding Investment Funds

An investment fund is a portfolio of financial assets managed by a market expert and held collectively by investors. These funds are typically approved by a market authority.

Benefits of Investing in Funds

• Delegation: Benefit from constant, flexible capital management by specialists and economies of scale.
• Diversification: Reduce specific risk by spreading investments across various securities.
• Enhanced Security: Protect investments through a legal and regulatory framework while benefiting from investment liquidity.

Among traditional financial investments, funds are a secure choice for the long term, providing portfolios with consistent returns and professional management expertise.

Credit for Private Banking

Private... Continue reading "Investment Funds and Financial Risk Management Essentials" »

Financial Terms

Basic Concepts

• Mortgage: A loan to buy real estate.
• Deposits: Money you put in the bank.
• Pension: Money paid to a retired person.
• Stock/Shares: Securities representing part-ownership of a company.
• Capital: Money invested in a business.
• Bonds: Interest-paying securities issued by companies that need to borrow.

Company Actions

• Takeover: When a company gains control of another by buying its stock.
• Merger: When two formerly separate companies join together.

Financial Institutions

1. Retail Banks: Making loans, receiving deposits.
2. Building Societies: Arranging mortgages.
3. Insurance Companies: Providing pensions, offering life insurance.
4. Investment Banks: Issuing shares or bonds, arranging mortgages, arranging or fighting takeover bids.

Vocabulary

Key