Operational Management Essay

5256 words - 22 pages

M

Assess relationship between a financial system or function and other systems or functions in an organization

Finance plays a key role in the functioning of any organisation because a steady flow of funds is required to make planned expenditure for delivering products and services and the sale of these products and services generates the necessary funds to make a profit.

Any activity undertaken by any of the other departments without proper financial consideration can have a detrimental effect. For instance, if the sales team decides to offer extended credit or discounts to increase sales, this will affect cash flow and finance will not be able to collect cash for the business when ...view middle of the document...

Hence, more funds were made available for increased sales and marketing of higher margin products although fewer numbers were actually sold. Hence, the marketing strategy had to be revamped to meet this new situation. Also the launch of a new product, G100, was brought forward since there was a possibility of obtaining a higher margin on it. The NPI
(New Products Introduction) section thus had to modify their deadlines and prioritise their current activities accordingly. The financial situation of the company thus impacts the functioning of all its departments.

Describe the systems of accounts and financial statements used to control a financial system

The three most important systems of accounts and statements used to control a financial system are:

1. Profit and Loss Account
A company may produces an annual profit and loss account which indicates the total profit or loss made during that period. Some companies also produce a monthly profit and loss statement. The various entries in the statement and their brief description is given below.

a) Total Sales or Revenue or Turnover: This is the total value of sales achieved over the period.

b) Direct Costs or Variable Costs: These are costs directly related to and vary with the sales achieved in the period such as cost of raw materials, transportation cost, cost of production and wages of production staff.

c) Gross Profit: This is equal to Total Sales (a) – Direct Costs (b). It is also expressed as a percentage of total sales and is called Gross Profit Margin.

d) Indirect costs or Fixed costs: These are costs that do not vary with sales such as administration expenses and other overheads such as rent, travel, training, depreciation etc.

e) Operating Profit: This is equal to Gross Profit (c) – Indirect Costs (d) and is a measure of profits earned by the company through its trading activities.

f) Pre-Tax Profit: This is obtained by either adding interest received on cash deposits in bank or deducting interest payable on loans from the operating profit.

g) Post-Tax Profit: This is calculated after payment of taxes on any interest made.

h) Retained Profit: For a limited company, some amount of the post-tax profit can be distributed among the shareholders as dividend. What is left is called retained profit. If the board of directors themselves are shareholders, they can reduce their wages (increase operating profits but pay more corporation tax) and take more dividends instead. This retained profit is then added to previous years profit and recorded in the balance sheet.

2. Balance Sheet
A balance sheet summarises the Assets (what is owned) and Liabilities (what is owed) of the business. Both these can be split into long term and short term. Long term assets or fixed assets include plant, machinery, land etc and short term assets include cash in bank, debtors and current stock. Long term liabilities include owners’ funds such as retained profit or shareholders...

Other Papers Like Operational Management

Operational Management Essay

783 words - 4 pages will enhance the productivity at each facility which they can all benefit from. It will reduce the cost in each of the facilities to aid in the prevention of loss of products. With there being only one supervisor to cover all facilities, the use a Management Information System can integrate all the computers throughout Canton. It is a tool which can assist the company to operate smoothly, the supervisors must be available to guide their staff

Operational Management Essay

1104 words - 5 pages Organizational Trends According to Organizational Behavior (OB, 2005), decision making is defined as the process of choosing a course of action for dealing with a problem or opportunity. There are several steps that occur in the decision making process. First, one must recognize and define the problem or opportunity. Second, one must identify and analyze alternative courses of action and estimate their effects. Third, choose a preferred course

Operational Management Advancement

1689 words - 7 pages Fundamental of Operation Management 1 1 FUNDAMENTAL OF OPERATION MANAGEMENT 2 Operation Management OVERVIEW What you will learn in this unit: what is operations management? operations management heritage. the roles of operation managers. the function of operations within the organisation. service operations management. manufacturing operations management. Fundamental of Operation Management 3 1.0 INTRODUCTION

Operational Management Report

1963 words - 8 pages , prayers and encouragement. We are thankful to Mr. Shafqat Ullah. We may not also forget the courtesy, knowledge, guidance and great piece of co-operation from management of Dawn Bread Ltd. We are also much obliged to Mr. Nadeem Khan – Financial controller at Dawn bread for being so instrumental in their value added guidance, whenever needed, while shaping up this report. COMPANY INFORMATION KEY PERSONALS: Mr. Ghulam Hussain (Chairman

Daiwa Bank Operational Management Case

4952 words - 20 pages luar negeri dan masih berfokus pada pasar domestik. PT. Bank Resona Perdania di Jakarta adalah satu-satunya bisnis internasional di luar Jepang yang dimiliki Resona Bank saat ini, dengan posisi sebagai pemegang saham sebesar 43.42 % dan sebagai management controller. Perubahan yang terjadi setelah kasus Daiwa Dunia perbankan mengalami guncangan yang cukup berat setelah kasus Daiwa terungkap dan dapat dikatakan kasus ini memberikan

Operational Risk

907 words - 4 pages should be a common, daily occurrence within an organization and should be implemented in every process in place. Corporations should implement an operational risk management program that all employees subscribe to; one that goes beyond simply ensuring against risk. Oftentimes, organizations, and the employees themselves, are the biggest source of operational risk (Enescu & Enescu, 2010, p. 312). Operational risk management must account for

Operational Risk

1659 words - 7 pages captured by gross income. In contrast, the standardized Approach that allows for different business lines would be better suited, but would still need adaptation to the needs of Islamic Banks. In particular, agency services under mudarabah, the associated risks due to potential misconduct and negligence, and operational risks in commodity inventory management, all need to be explicitly considered for operational risk measurement. 3.3

Operational Issues

2584 words - 11 pages an Operations Manager. (Slack, et al., 2012) 1. Introduction – What is Operations & what does it mean Many years ago the process was referred to as production, however this never took into account the tangible service aspects of goods and service supplied, and for that reason today it is now known as Operations. The importance of operational management within business should be an integral part of every task that is carried out

Solar Pv Grid Parity by Operational Excellence

1342 words - 6 pages paradigm shifts that have transformed industries such as the Microelectronics and the Automotive • Key Operational excellence sources of value for PV manufacturing: – – – – – Overall Equipment Efficiency increase Process Control Factory planning and building block optimization Inventory management Design for Manufacturing Overall Equipment Efficiency Increase • Overall Equipment Efficiency is the ratio between actual throughput and

Compare and Contrast the Operational Strategies of Apple and Samsung

1659 words - 7 pages - Octavia Lebele, 1503445- Sabelo Ngcobo, 1524403- Mosebo Tladi, 866804 | INTRODUCTION Operational strategies play a huge part in determining the success and failure of business initiatives. It is the vehicle through which corporate strategy is driven throughout the organisation and is the main contributor to competitive edge and company profitability. Thus operational strategy is implemented by operations management which

Operational Gap with in Organization and Business Development

1027 words - 5 pages | Consolidated Disposal | Memo To: Gus Sanchez Operations Site Manager From: Angelo Meleandez Assistant Operations Site Manager CC: James Castro Regional Operations Manager Date: [ 7/9/2012 ] Re: Operational gap with in organization and Business development Purpose This memo is being forwarded to you in regards to addressing a potential operational gap and limitation of growth with in our organization that needs to be

Related Essays

Operational Management Simulation Essay

1249 words - 5 pages 1. What were the take aways and what did you learn? 2. What would you do differently next time? There are many performance indicators for the success of a business. This include brand identity, reputation, innovation, leadership, productivity, process management, customer satisfaction, and quality to name a few. Management at Benihana can achieve maximum profitability by maximizing utilization, throughput time, making use of batching

Operational Management: Roles And Goals Essay

596 words - 3 pages Operational Management: Roles and Goals All organizations produce products, services, or a combination of both, regardless of size, being public or private, not-for-profit, or for-profit. Because of this, every organization has an operations function. Managing finite resources in the production and delivery of the products and services requires operational management (Slack, Chambers, & Johnston, 2010). Operations managers are the

Project Management And Operational Research Essay

2094 words - 9 pages University of Wales & Management Development Institute of Singapore (MDIS) Subject : Project Management and Operational Research Type of assignment : Individual Assignment Lecturer : Siew Ngung Chia Course : Master of Science in Management Assignment Cover Sheet Number Name of Student ID Number Signature 1 Musamukhamedov Farrukh M1100082 Submitted on Due Date? NO (Date Submitted: 19/03/2012) Words Limit Observed

Operational Management Essay

552 words - 3 pages experience of purchasing a product only to discover that it is defective in some way or does not function the way it was designed to. In this way, I would do the inspection of chip legitimately to make sure that the calculator produced is of best quality as per the requirement of consumer. References Schroeder, R. G., Goldstein, S. M., & Rungtusanatham, M. J. (2013). Operations Management in supply chain (6 th ed.). New Delhi, India: McGraw Hill Education (India) Private Limited. Jacobs, R. F., Chase, R. B. (2013). Operations and Supply Chain Management (13th ed.).New Delhi, India: McGraw Hill Education (India) Private Limited