Extras Flashcards
Give four examples of things PEST looks at with Political?
- Tax policy
- Employment law
- Monopoly legislation
- Foreign trade regulation
Give two examples of things PEST looks at with Economical?
- Interest/inflation rates
- Unemployment
Give three examples of things PEST looks at with social?
- Income distribution
- Education and consumerism
- Population
Give two examples of things PEST looks at with technological?
- Speed of technology transfer
- Rates of obsolescence
What is the calculation for contribution?
Sales - Variable costs
What are 6 advantages of VBM?
- Focus on value over profit
- Forward looking
- Value drivers established
- Controllable targets created
- Plans created to help employee reach target
- Performance metrics that are compatible with these metrics are created
What are 6 disadvantages of VBM?
- Requires cultural shift
- Shareholders may need to be educated
- Motivation required for employees
- Identifying value drivers may be hard
- MIS updates
- Costly and potentially fruitless
What are five characteristics of a good transfer price policy?
- Goal congruence
- Fairness
- Autonomy
- Bookkeeping
- Minimise global tax liability
What is scenario 1 of transfer pricing?
There is a perfectly competitive market for the product/service transferred
What should the transfer price be in scenario 1?
Transfer price = market price
What is an additional consideration for scenario 1 of transfer pricing?
An adjusted market price should be used for differences in quality or service.
What is scenario 2 of transfer pricing?
The selling division has surplus capacity
What do we do for scenario 2 of transfer pricing?
Transfer price negotiated between:
- Minimal price selling division will accept
- Maximum price buying division will pay which is lower of…
- External purchase price of transferred products
- Net marginal revenue
What do we do for scenario 3 of transfer pricing?
Transfer price is negotiated between:
- Minimum selling price division will accept = marginal cost + loss contribution from other products
- Max price buying division will pay which is lower of…
- External purchase price of transferred products
- Net marginal revenue (selling price minus marginal cost of buying divisions final product
What are six ways six sigma is useful?
- It sets tight targets but accepts some failure
- The identification of business process improvements as key to success.
- Management decision making is driven by data and facts.
- The proactive involvement of management.
- It involves collaboration.
- The increased profile of quality issues.
