B5/B6 Flashcards
Biggest risk of holding cash in a money market account
FDIC accounts (money market) have extremely low interest rates, so biggest risk is rising inflation eroding value of money
Equity carve out
Simple IPO story:
Company sells shares sell to the public (through IPO), parent company maintains controlling interest
Spin off
Brand new company, parent company and new company are separated
Setting a ceiling price below the equilibrium price does what
Creates a shortage
Ex: gas now cost $1 per gallon, everyone wants it now, not enough to go around so a shortage
Three ways fed can increase money supply:
1) buy government securities in open market
2) LOWER discount rate
3) LOWER required reserve ratio
4 factors giving customers the bargaining power
Think like street vendors in Bali selling an I love Bali t-shirt:
- one group of customers make up large volume of the business - all tourists
- much information is avail to customers - can see all other vendors & prices
- low switching costs - can just walk down street
- high # alternate suppliers/sellers - streets lined with exact product
Competitive market, equal increase in demand and supply does what
Drives up market clearing quantity!
NOTE; no price change (draw the graph)
Monopolistic Competition vs Perfect Competition (difference in price & variety of products)
Remember: Monopolistic competition is like a coffee shop, perfect competition is like a farmers market
Under monopolistic competition (coffee shop) they produce a greater variety of products, at a higher cost per unit because they want to have product differentiation, since there are so many substitute options
Under perfect competition, the variety is low and cost per unit is low, because there is such high competition and no differentiation
When economy is at the “peak” what is unemployment
Peak cycle means unemployment is at its natural rate of unemployment; cyclical unemployment is at 0%
Performance of quality assurance occurs in which process
Implementation
standard of quality is broadly defined in authorization process, then precisely defined in planning, and performance occurs in the implementation process, and close process occurs after the performance of the quality deliverables
Audit trail
Allows users to trace transactions from the system to the source documents
(Detective control)
Acceptance test
Ensures software works for an intended user in his or her own work environment
Usually developer isn’t present, just the intended user will use
Validation tests
“Did we build the right thing?”
Focuses on user actions and user outputs within a system
Hash total
Check if numbers that are not normally added have been processed incorrectly. This is a detective control
Just in time production environment characteristics
Scheduling resources to deploy just in time to meet customer requirements.
You have LOWER inventory levels, so MORE purchase orders with fewer units each
Beneficial to switch to JIT system if you have higher/increasing inventory carrying costs, or your cost per purchase order is decreasing
Basically, if you can handle more POs (cost per PO isn’t increasing) and you have high inventory carrying costs, JIT is the move
Enterprise resource planning system is designed to:
Integrate data from all aspects on an organization’s activity
Routers
Hardware devices that manage network traffic and assign IP addresses to different devices
Gateways
Intermediary (why its called gateway) devices on a network that transform data into different protocols so data can flow between networks
AIS
Accounting information system
Processes and tracks data resulting from business transactions (historical, not predictive)
Change management
Systematic approach to transititioning/ transforming an organizations goals
I.e hiring an outside consultant to help a company implement new tech
Sanity test
Type of system test (which is used to assess overall performance of a newly implemented IT platform)
Sanity test gauges whether a system behaves as it was meant to (validating logical reasoning of the system)
Characteristics of oligopoly
Kinked demand curve - other firms will match price cuts, but ignore price increases
Oligopoly has few competitors (think media or tellecomunications (nbc, Verizon)
Sequence of a business cycle (Elena performed considerably tough)
Expansion, peak, contraction, and trough
5 business process management activities
DEMMO Design Execution Modeling Monitoring Optimization
Six sigma; DMAIC
Existing product and business process improvements: Define problem Measure key aspects of current process Analyze the data Improve or optimize curent processes Control
Six sigma; DMADV
New product or business process development Define design goals Measure CTQ Analyze design alternatives Design optimization Verify design
Kaizen
(Continuous improvement)
Occurs at mfg stage
Ongoing search of cost reductions to ensure resources tax within target costs
Four important characteristics a supply chain mgmt system helps with
What, when, where goods were delivered
And how much goods cost
Hot site
Location that is equipped with necessary hardware & possibly software
Configured to be used for the processing needs of the client
Logical access controls
Control access to information within IT system
Authentication controls (passwords, biometrics, multi factor authentication)
User access controls
Vulnerability controls
Review over application and software on an ongoing basis (think Anti-virus software)
Patch management, data encryption
Audit logs are what type of control
Detective
Denial of service attack
One computer bombards another with a flood of information
Analysis of internal and external factors that contribute to an organizations success
SWOT ANALYSIS
Porters five forces
Bargaining power of customers Barriers to market entry Existence of substitute product Market competitiveness Bargaining power of suppliers
A basic detimernant of elasticity of demand is
of substitutes available for the product
If a lot of substitutes are available - price elasticity of demand will be high
What causes cost-push inflation
An increase in nominal wages
What does “price elasticity of demand of 2.0” imply
Demand will change by 2x (as a percentage) for any change in price. This means the demand is ELASTIC
If demand is price unit elastic, how does a change in price impact total revenue
A change in price will have no effect on total revenue if demand is price unit elastic
Systems steering committee responsibility
Oversees IT systems, and approves long range plans
Project development team role
Responsible for specific project aspects, like planning, tracking, change management
Who structures IT governance controls?
Executive management is responsible for designing/structuring IT governance controls for middle managers to enforce
In asymettric encryption, what is purpose of public and private keys
Public key encrypts messages, and private key decrypts the message at the other end
