study questions Flashcards
Techno-Socioeconomic oriented Business
Which are the three interacting scientific disciplines of this approach?
Explain the four intersections of the three superordinate scientific disciplines.
Which 3 questions must always be taken into account when making economic decisions?
economic sociology: configuration of economy through social action and the configuration of human coexistence by the economy
techno sociology: describing influence of technology and technique on society and individual people
techno economy: economic theory of technological progress
intersection of all three: technologically and socio-economically oriented business studies, description and design of techno-socio-economic systems at micro-economic (operational) level
- Is the problem technically solvable?
- Is the decision economically meaningful?
- What is the impact on people directly/indirectly?
imputed interest (calculation + sketch)
imputed interest (calculation + sketch)
cost center accounting
- Final cost centers: directly serve product production, costs into product cost accounting
- Pre cost centers: costs transferred to other centers, not directly in product costs
- Cost center accounting stages: Primary costs allocation, Secondary costs allocation, Calculation rates computation
- Cost distribution tasks: Overhead costs distribution, cost centers costs apportionment, calculation rates determination, profitability figures calculation
- Cost distribution sheet usage: Record costs, distribute and apportion costs, determine rates
- Pre costs allocation methods: Direct allocation, Step-down allocation (partial services recognition)
Draw a “Line and Staff” organization.
Explain the concept of the Line and Staff organization.
Explain the benefits and costs (disadvantages) of the Line and Staff organization.
Line officers (individuals who hold positions in the direct chain of command) are assisted by the staff. Staff’s role is advisory in nature. Staff does not have any authority for directives! It is only responsible for planning and controlling.
- Benefits Line-organization:
o Coordination and expertise within functional areas
o Well-defined information path for employees - Problems:
o Time/costs to coordinate departments
o Operating decisions
o Coordination failures across departments
o Employees concentrating on their own functional specialties rather than on the customer
Draw a “Matrix organization.”
Explain the concept of the Matrix organization.
Explain the advantages and disadvantages (problems) of the Matrix organization.
Matrix organizations have functional departments such as finance and marketing.
Members of the departments are assigned to cross-functional product teams (subunits).
Team members report to both a product manager and a functional supervisor.
Advantage:
o Individuals are more likely to focus on the overall business process
o Functional departments help to ensure functional excellence
o Provide more clearly identified opportunities for development
Potential problem:
o Intersecting lines of authority
The value chain model
formulates strategies, identifies competitive advantage, and develops interrelationships between activities.
Activities in value chain are interdependent, with output of one becoming input for the next.
Value added at each stage.
Manufacturing and marketing rely on Innovation process.
Coordination between stages is essential.
Define the following terms exactly and give 2 examples for each type of costs:
a. Direct costs:
b. Indirect costs
What are “special costs of production/sale”? Give one example for production and one for sale.
What is a “cost object”? Give 3 different examples for cost objects.
a. Direct costs: (direct material costs, direct labour costs)
* Costs are related directly to the cost object AND
* Can be traced to it in an economically feasible way
b. Indirect costs (consumption of lubricants, auxiliary wages)
* Costs are not related directly to the cost object OR
* Costs are related directly to the cost object BUT can not be traced in an economically feasible way
Special costs are costs for special services (eg. For a particular order)
Production: special processing, special equipment
Sale: special cargo, special packaging
Cost object is any activity (product) for which a separate measurement of costs is desired.
examples for cost objects:
* Product: a ten-speed bicycle
* Service: Airline flight from Los Angeles to London
* Activity: A test to determine the quality level of a television set
* Department´: production department
Special cost terms
Sunk costs, idle time costs, opportunity costs
- Sunk costs: Costs which are not relevant to present decisions, because they do not change these decisions
- Idle time costs: Idle time is unproductive time, Part of the fix costs which are not utilized
- Opportunity costs: values of benefits foregone when one decision alternative is selected
What are “imputed interests”?
Explain the reason for calculating imputed interests.
How do you calculate imputed interests? (Name all variables)
For which assets must imputed interests be calculated?
Attributed interest income without payment, used in taxation and accounting for loans and financial instruments
= Costs equivalent to the company’s capital lock-up
= Opportunity costs of alternative use of capital
reason: account for the opportunity cost of using the company’s own capital in business operations, instead of investing it elsewhere for a potential return. Provides more comprehensive understanding of the total costs of operations, helping businesses make more informed financial and operational decisions.
assets: current and fixed assets
Into which classes are materials divided? Describe them.
Direct Materials:
* Can be physically identified with a specific product
* Value is relatively high
Indirect Materials:
* Auxiliary Materials
* Can be physically identified with a specific product
* Value is relatively low
* Operating Materials
* Materials/Energy used for the run of a machine
Define the following terms:
a. Current value of a cash flow
b. Net present value of a cash flow
a: Current/present value: Nominal value at the time of the payment transaction.
b: Net present value: Value of a payment compounded respectively discounted to a specific reference date.
Cost comparison method (CCM)
Explain the premises of the CCM.
What strengths and weaknesses does the CCM have?
Uniform income per unit: Assumes same income per unit across all alternatives; compare unit costs for varying volumes.
Average values: Utilizes average figures like costs, plant utilization; disregards timing differences of costs.
Relative profitability: Evaluates alternatives based on relative, not absolute, profitability.
Exclusion of project revenues: Ignores project-specific revenues; assumes identical product quality and quantity.
Comparable investment lifespans: Requires similar lifespans for all investment alternatives.
Similar average capital expenditures: Presumes roughly equivalent average capital expenditures across alternatives.
Strengths: simple calculations
Weaknesses:
* Premises are very restrictive
* Unreliable Estimations: predictions can be difficult and time consuming
* static perspective: only considers an ‘average’ period
* Neglecting the issue of capacity utilization as well as the cost composition (fixed vs. variable costs)
* Data Certainty Assumption: The assumption of certainty is unrealistic. Eg. Production volumes are often uncertain
Static methods of investment appraisal:
- Cost comparison method (CCM)
- Profit Comparison Method (PCM)
- Average Rate of Return Method (ARR)
- Static Payback Period (Payoff-) Method (SSP)
Dynamic methods of investment appraisal
Discounted Cash flow methods
* Net present value method (NPV)
* Internal Rate of Return Method (IRR)
* Annuity method (AM)
End of value methods
* Compound Value Method (CV)
* Critical Debt Interest rate Method (CDIR)
* Visualization of financial implications method (VoFI)
Dynamic payback period method (DPP)
Net Present Value method (NPV)
Explain the Net Present Value method.
What strengths and weaknesses/problems does the NPV have?
- one of the most widely known and used methods
- NPV is the monetary gain from a project, computed by discounting all future cash flows related to the project back to time t = 0
- Reference Date of the calculation: Start of usage time
strenghts:
* relatively simple calculations
* more realistic assumptions compared to the static models
weaknesses/problems:
* Unreliable Estimations: Making predictions can be difficult and time-consuming
* A Single target (money) measure may be insufficient
* Requirement of Known Project Life
The Four P’s of the Marketing Mix
framework for developing and implementing effective marketing strategies
Explain the term “Price Elasticity of Demand.”
How is the “Price Elasticity of Demand” to be calculated? Name all terms.
Draw an inelastic and an elastic demand. Name all coordinates and curves.
sensitivity of the quantity demanded of a good or service to a change in its price
price increase results in a small drop in demand, it’s said to be inelastic
price increase leads to a significant drop in demand, it’s considered elastic
Explain and draw the Kano Model.
In which project activities is the Kano Model useful?
theory for product development and customer satisfaction. It classifies product attributes into three categories:
Threshold/basic Attributes: basic, expected attributes. Improving -> diminishing returns
missing or poorly -> customer dissatisfaction is high
Performance Attributes: More is better. Directly impact customer satisfaction. Most verbalized customer needs.
Excitement/delight Attributes: Unexpected, satisfy latent needs. Presence boosts satisfaction significantly, absence doesn’t harm.
used in:
Identifying customer needs
Determining functional requirements
Concept development
Competitive analysis
Which factors are affecting market demand? How do they affect demand?
- Product’s Price: Affects quantity demanded.
- Income: Higher income boosts demand.
- Quality: Superior quality elevates demand.
- Advertising: Enhances demand via brand loyalty.
- Substitutes: Price hikes in one product boost demand for substitutes. e.g. samsung higher price -> apple demand increase
- Complements: Lower prices for complements increase demand, e.g. lower PS4 price -> increased demand for games compatible
- Seasonal Factors: Influence usage, altering demand, e.g. winter fuel/warm clothes
- Future Price Expectations: Anticipated increases can drive current demand. e.g. gold
Describe the core marketing concept.
social and managerial process of creating and exchanging value through products
Human needs (state of deprivation), shaped by culture and personality, transform into wants, wants transform into demands if backed by buying power
Product: anything that can be offered to market for attention, acquisition, use or consumptions to satisfy need or want
exchange: obtaining a desired product by offering somethingin return
transaction: definitive trade between two parties (two defined things, agreed upon conditions)
market: location where buyers and sellers interact to exchange products for money. Set of actual and potential buyers of product.
Directing efforts to identify needs for successful product creation.
Product Life Cycle
Draw the sales and profit over the product lifetime (PLC).
Explain the 5 stages of the PLC (5 points):
- Product development: Idea creation, development.
- Introduction: Launch, initial sales, low profits, high prices.
- Growth: Sales boost, new competition enters market, stable/lower prices, manifacturing costs fall
- Maturity: High competition, lower prices, new user targeting, profit starts dropping,
- Decline: Falling sales and profits, alternatives become better/newer, changing tastes.
Fill in the “Core functions of the HRM.”
Human Resource Management
Human Resource Management
What are the core functions of the Human Resource Management?
Explain the core functions briefly.
- Human Resource Planning: Determining future HR needs, considering quantity, quality, spatial and time aspects.
- Recruitment and Selection: Acquiring the needed employees efficiently, potentially using headhunters.
- Human Resource Development: Enhancing employee knowledge and skills, planning, executing, and evaluating training programs.
- Operational use of Personnel and Motivation: Assigning employees to appropriate positions, focusing on motivation.
- Personnel Administration and Maintenance: Tracking employee data including personal histories, skills, capabilities, accomplishments, and salary.
- Employee Release: Managing employee exits due to retirement or transitioning to another company.
Explain the “Letter of Credit.”
Purpose of the letter of credit.
Explain the steps in a letter of credit transaction.
A secure financial instrument in international trade
guarantee from a bank on behalf of the buyer that payment to exporter (seller) will be made if conditions are met
Protects both buyer and seller, ensures credibility.
Purpose: Opens doors to international trade, substitutes bank for buyer as source of payment, offers financing opportunities, provides bank expertise for trade transactions, ensures payment only when terms are met.
Steps:
1. Sales Contract: Agreement between buyer and seller.
2. Application & Agreement: Contract between issuing bank and customer.
3. Issuance of LC: Bank prepares LC as per application, forwards to advising bank for confirmation.
4. Advising: advising bank forwards of LC to beneficiary, adding confirmation if agreed.
Which forms of repayment of loans do you know?
Explain them!
Interest loan (fixed loan):
* During the loan period, only the annual interests are paid
* The entire loan amount is paid at the end of the loan period
Repayment loan (installment loan):
* Redemption quota remains constant
* Interests are calculated from the residual debts
* Periodic redemption amount (Redemption quota+ interests) falls
Redeemable loan (annuity loan):
* Periodic redemption amount remains constant
* Interest share included in the redemption amount falls
* Redemption quota share included in the Redemption amount increases
Explain “Leasing.”
Which types of leasing can be distinguished?
Draw and explain the different types.
method of financing where an equipment owner (lessor) provides the right to use an asset to the borrower (lessee) in return for regular rental payments over an agreed period.
Types of Leasing:
Direct Leasing: Lessee and lessor agree on a lease object and conclude a leasing contract. The lessee pays a regular rental payment (leasing rate) to the lessor.
Indirect Leasing: Lessee agrees on a lease object with a seller. A leasing company acquires the lease object at the request of lessee and/or seller. The lessee pays a regular rental payment (leasing rate) to the leasing company.
Risk management
What do we understand by “risk”?
What are the objectives of risk management?
Complete the risk management process:
Risk is the occurrence probability of a (negative) event multiplied by the extent of the damage
Risk Management: Systematic process to identify, assess, control threats to capital and earnings. Aims to minimize uncertainty in decisions and manage risk consequences.
The Strategic Supply Process Chain.
Insert the steps (tasks) of the Strategic Supply Process Chain.
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Strategic Supply Management:
Draw the ‘Strategic Supply Gap Analysis’.
Explain the ‘Strategic Supply Gap Analysis’.
Which measures (actions) can be used to close a strategic supply gap?
identify potential future shortages/bottlenecks in supply. A strategic supply gap arises when material/service demand exceeds supply.
Measures to close the gap:
Current Technologies, Current Supplier: Increase efficiency of supply and material usage.
New Technologies, Current Supplier: Search for or substitute with new materials.
Current Technologies, New Supplier: Look for new suppliers locally and internationally.
New Technologies, New Supplier: Find suppliers for new, innovative materials.
Draw the Abernathy-Utterback diagram of the relationship between product and process innovation.
Explain the Abernathy-Utterback model.
dynamic view of innovation, emphasizing the shifts in focus from product to process innovation over time as a product matures in the market.
Draw and explain the relationship between the
Balance Sheet and
Profit/Loss Account
by profit determining.
Profit Determination: Reflects in both balance sheet and profit/loss account.
Each clearing circle must yield the same result (profit or loss) in balance sheet and profit/loss account.
Cross-Verification: Possibility to check calculations across both documents.
Represent content and structure of the company’s balance sheet (Complete the table).
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Product Function with a single input.
Explain the “law of diminishing marginal returns” (1).
Draw (a) the Total Product Function and (b) Average (APL) and Marginal Product (MPL) Functions of a production function following the “law of diminishing marginal returns.”
an additional factor of production results in
smaller increases in output
After some optimal level of capacity utilization, the addition of any larger amounts of a factor of production will inevitably yield decreased per-unit incremental returns
Explain the Corporate-Management Process.
How is “MANAGEMENT” defined?
Complete the graphic and explain the constituent elements.
“Management” is concerned with the organization and coordination of activities to achieve stated aims
and objectives
- Planning: Generating, selecting suitable alternatives for problem-solving.
- Decision-making: Choosing plan to realize, resource allocation.
- Directing/Delegating: Instructing subordinates to achieve goals.
- Control: Continuous result checking, corrective actions for plan tracking.
Calculation of Investments
Define following terms:
Current value of a cash flow
Net present value of a cash flow
Current/present value: Nominal value at the time of the payment transaction
Net present value: Value of a payment compounded respectively discounted to a specific reference date.
