management activities 3 controlling Flashcards
define controlling
a management activity that measures how well an organisation achieves the goals and objectives that it has set
steps in management activity of control
1 set the standard 2 measure performance 3 compare performance with standard 4 take corrective action(if necessary)
types of management control
1stock control 2 quality control 3 credit control 4 financial control
4 Types of stock
(1 raw materials) (2work in progress) (3 finished goods) (4mechandise)
Key terms in stock control
1 optimum stock level 2 maximum stock level 3 minimum stock level 4 re-order level 5 lead time
Methods of managing stock levels
1 manual stock take 2 edi(electronic data interchange) 3just in time(jit)
What is manual stock take
Physically count and record all stock
What is EDI (electronic data change)
Computer-to-computer communication, no human intervention
What is jit(just in time)
goods are received from suppliers only when needed. reduce inventory holding costs and increase inventory turnover.
Risk of too much stock
1Lower profits 2 obsolete stock 3 theft 4 inefficient use of cash
Risk of to little stock
1Loss of sales 2 loss of economies of scale 3 storage cost 4 production delays
Benefit of stock control
1 Increased efficiency 2 feedback 3 reduced costs 4 theft
Benefit of quality control
1 Customer satisfaction 2 quality awards 3 reduced costs
Ways to achieve quality control
1Inspections 2 quality circles 3 quality awards 4 total quality management(tqm)
What is credit control
Ensures that customers who use credit facilities pay their bills in full and on time
Steps in establishing effective credit control system
1 Set credit limit 2 check customers creditworthiness 3 efficient administration 4 debt collection procedure
Benefit of credit control
1 Lower risk of bankruptcy 2 reduces bad debts 3 increased sales and profits
What is financial control
Aims to ensure that the business is profitable and liquid(liquidity is the ability to pay bills as they fall due)
Methods of financial control
1 cash flow forecast(planned future income and expenditure) 2 ratio analysis(indication organization financial performance)3 budget allocation
