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
