unit six planning managing how does this picture relate to planning managing?

Unit SixPlanning Managing

How does this picture relate to planning managing?

Unit 6 Vocabulary Benefits Bribes Business Ethics Capacity Capital Cash Discount Character Code of Ethics Commission Conflict of Interest Credit Environmental Protection

Agency (EPA)

Ethic Ethical Behavior Financing Cost Flextime Gantt Chart Human Resources Human Resource

Management Invoice Job Descriptions Job Specifications Labor Union Lead Time

Unit 6 Vocabulary Line Organization Line-and-staff Organization Manager Model Inventory Obsolescence Cost Opportunity Cost Outsourcing PERT Diagram Piece Rate Philanthropy Pregnancy Discrimination

Act Product Development

Project Organizations Prototype Purchasing Policy Quantity Discount Recruit Résumé Return Policy Rework Policy Rule Safety Stock Salary Secured Funds

Unit 6 Vocabulary Shrinkage Cost Social Responsibility Staff Storage Cost Trade Discount Usage Rate Vendors Wages Warehousing

Unit 6 Essential Question 1

How are the day to day operations of production, purchasing, inventory, distribution, operations, and personnel conducted?

Essential Question 1A

Why is planning purchasing important?

Purchasing and

Inventory

Planning Purchases

Planning purchasing means buying at a low price and then selling for a profit.

Purchasing: Buying all the materials needed by an organization.

Planning Purchases

Model Inventory: Target inventory of what you think you will need to keep in stock.

Vendors: Businesses that sell inventory.

Selecting the Right Quality Buying the Right Quantity Timing Your Purchases Choosing the Right Vendors

ReliabilityDistanceServiceNumber of Vendors

Managing Purchases

Get the Right PriceDiscountsTermsPayment Methods

Receiving and Following Up on PurchasesCheck the invoice: Itemized statement of

money owed, with the purchase order and received shipment.

Managing Purchases

Essential Question 1B

What considerations must be taken in to account regarding inventory?

Inventory Management

The purpose of inventory management is to find and maintain inventory levels that are neither too small nor too large.

Inventory Considerations

Financing Costs: The interest you pay to borrow money to purchase inventory.

Opportunity Cost: Loss of the use of money tied up in inventory.

Storage Costs: The amount of money spent on renting or buying the space needed to store the inventory.

Inventory Considerations Insurance Costs: The amount spent to

insure the inventory on hand against loss. Shrinkage Costs: Money lost when

inventory items are broken, damaged, spoiled, or stolen.

Obsolescence Costs: Money lost when products or materials become obsolete while in inventory.

Planning Inventory

Calculating Supply: The number of months of inventory to keep on hand.

handon keep supply to sMonth' RateTurnover Inventory

12

Planning Inventory

Calculating Cost: Estimating the cost of the inventory on hand.

Cost of Goods Sold—————————— = Inventory CostInventory Turnover Rate

Planning Inventory

Inventory Average: Use the industry averages to help gauge your inventory management.

Essential Question 1C

How is inventory maintained?

Keeping Track of Inventory

Keeping tabs on how much inventory you have is the first step in controlling inventory levels.

Keeping Track of Inventory Visual Inventory Systems: Look at

how much inventory is on hand and compare it to what you want on hand.

Perpetual Inventory Systems: As inventory is sold, it is subtracted from the inventory list. As new inventory arrives, it is added.

Keeping Track of Inventory Partial Inventory Systems: A

combination of systems. A perpetual system is used only for those items that account for a large share of sales.

Just-in-time (JIT) Inventory Systems: The responsibility of inventory is shifted to the vendor and is delivered just before it is used.

Keeping Track of Inventory

Regardless of the inventory system used, a physical count will help evaluate your system as well as determine lost, stolen or bad items.

Reordering

To maintain proper inventory levels, you will have to decide when and how much to reorder.

Periodic Reordering: Goods or products that are used often and reordered every: day, week, other week, month, etc.

Reordering

Non-periodic Reordering: Inventory that is reordered on an as needed basis.Lead Time: The gap in time between placing

the order and receiving the order.Usage Rate: How quickly the inventory will be

used in a period of time.Safety Stock: The cushion of products or

materials that keeps you from running out of inventory.

Essential Question 1D

What other day to day operating policies need to be considered?

Definitions

Policies: General statements of intent about how to run your business.

Rules: Tell employees exactly what they should or should not do.

Operating Policies Return / Rework Policies: A fair

policy regarding replacements, refunds, or repairs will help maintain customer goodwill.

Delivery Policies: If you have a delivery policy, will there be charge? Will the area of delivery be limited? What does your competition do?

Operating Policies Handling Complaints: Most

businesses use the policy, “The customer is always right.”

Servicing What You Sell: If something you sell stops working, within a certain time limit, you fix it.

Courtesy to Customers: Asking departing customers, “Did you find everything you were looking for?”

Operating Policies Shopping Climate: Maintaining

certain lighting, air conditioning, or housekeeping standards.

Provision of Restrooms: Will your restrooms be open to the public or locked and usable by customers only?

Operating Policies Response Time: How long is an

acceptable amount of time required to fill a customer’s order?

Warranties: Manufacturers usually guarantee the materials and workmanship that go into their products.

Operating Policies

Hours of Operation: Hours of operation should be set to suit the customers.

Operating Policies Credit Policies:

Credit: An arrangement in which a business or individual can obtain products in exchange for a promise to pay later.

Three Cs of Credit: Character: Demonstrated responsibility in paying

bills. Capacity: The ability to pay based on the

customer’s income and expenses. Capital: Determination of the customer’s physical

and financial assets.

Operating Policies Credit Policies:

Credit Plans: Bank Credit Cards: Businesses accept bank

credit cards. Requires a merchant account. Charge Accounts: The business gets it own credit

card. Installment Plans: Businesses offer payment over

time such as layaway. Financing: Businesses provide on site financing

for major purchases.

Unit 6 Essential Question 2

What are the ethical, social, and environmental responsibilities of businesses?

Essential Question 2A

What are social obligations of a business?

Social ResponsibilitySocial Responsibility– Social responsibility: A business's

contract with society to make safe products, treat customers and employees fairly, and conduct business honestly A company has a duty to protect its

customers from unsafe products and misinformation

The Environmental Protection Agency (EPA), the media, and the public all promote environmentalism among businesses

Social ResponsibilitySocial Responsibility– Entrepreneurs can contribute to the

community by: Donating products or services Encouraging employees to participate in

community service Joining other companies to work on

community projects

Essential Question 2B

What is the ethical issues facing business and the ethical behavior needed to face them?

EthicsEthics– Ethics: The moral code by which

people live and conduct business– Ethical Behavior: Conduct that

adheres to this moral code– An entrepreneur should develop a

written code of ethics to reduce the chance of unethical behavior occurring in his or her business

– Employees should be involved in developing the code of ethics

EthicsEthics– Businesses often face ethical

problems when: There are conflicts of interest: Clash

between a person’s private interests and his or her responsibilities in a position of trust

When their economic survival is threatened

When doing business abroad (where ethical practices may differ)

Essential Question 2C

What are the environmental concerns and issues that relate to the operation of a business?

Environment ConcernsEnvironment Concerns– Environmental Protection Agency:

An independent federal agency established to coordinate programs and enforce regulations aimed at reducing pollution and protecting the environment Toxic and hazardous waste disposal Emissions and other pollutants Consumer concerns about the environment

Essential Question 2D

What are the safety procedures and health procedures business operations need to be aware of?

Safety and Health PoliciesSafety and Health Policies– Employee and Customer Safety:

The financial costs of an on-site accident can ruin a small business– Train your employees in safety practices

and procedures– Post warning signs to inform customers

and keep them away from delicate or potentially damaging equipment

Safety and Health PoliciesSafety and Health Policies– Make sure you are following regulatory

practices from: OSHA EPA Health Department Fire Department

-Check and test safety and security equipment regularly

- Test company products under the most extreme conditions in which they will be used

Unit 6 Essential Question 3

What are the concepts, systems, and strategies needed to acquire and develop human resource needs for an entrepreneurial entity?

Essential Question 3A

What are your business’ personnel procedures?

Organization StructureOrganization Structure

Each position on the organization Each position on the organization chart requires a chart requires a job descriptionjob description:: A statement describing the A statement describing the objectives of the job and its objectives of the job and its duties and responsibilities.duties and responsibilities.

Organization StructureOrganization Structure

Each Each job descriptionjob description requires a requires a job specificationjob specification:: Description of Description of abilities, skills, educational level, abilities, skills, educational level, and experience needed by an and experience needed by an employee to perform the employee to perform the described job.described job.

Personnel PoliciesPersonnel Policies

Employee StandardsEmployee Standards:: An An employment policy statement employment policy statement which qualifies the desired traits which qualifies the desired traits of the people you hire.of the people you hire.

Recruiting EmployeesRecruiting Employees:: RecruitsRecruits:: Prospective Prospective employees, that can be reached employees, that can be reached by classified ads, employment by classified ads, employment agencies, placement offices, the agencies, placement offices, the internet, etc.internet, etc.

Personnel PoliciesPersonnel Policies

Training and DevelopmentTraining and Development:: New employees work better and New employees work better and more efficient if they receive more efficient if they receive training immediately.training immediately.

Personnel RecordsPersonnel Records:: Establish Establish and maintain a record on each and maintain a record on each employee for contact, training, employee for contact, training, performance, etc. information.performance, etc. information.

Essential Question 3B

What is your business’ hiring and training process?

What plans, procedures, and What plans, procedures, and policies must you have in policies must you have in

place before hiring your first place before hiring your first employee?employee?

People StrategiesPeople Strategies Basic Hiring Criteria:Basic Hiring Criteria: You must You must

hire the right people. Ensure your hire the right people. Ensure your employees have the right employees have the right qualifications and skill sets for the qualifications and skill sets for the job.job.

Developing Employees:Developing Employees:• Orientation is conducted first. This Orientation is conducted first. This

introduces the employee to the introduces the employee to the companies vision, plans and companies vision, plans and expectations.expectations.

• Second, provide training employees Second, provide training employees need for the skills to be successful now need for the skills to be successful now and in the future.and in the future.

People StrategiesPeople Strategies Establish A Productive Establish A Productive

Environment:Environment: A place where A place where employees are treated with respect employees are treated with respect and trust; empowered to make the and trust; empowered to make the right decisions; and made to feel a right decisions; and made to feel a part of a productive team.part of a productive team.

Reward Your People: Reward Your People: Recognize Recognize and reward employee contributions and reward employee contributions and achievements.and achievements.

Essential Question 3C

What are your business’ employee benefits?

Personnel PoliciesPersonnel Policies

Pay and BenefitsPay and Benefits:: In order to In order to attract and keep the kind of attract and keep the kind of employees you want, you will have employees you want, you will have to do two things:to do two things:• Pay a competitive wage, salary, or Pay a competitive wage, salary, or

productivity rate.productivity rate.• Productivity RatesProductivity Rates::

Piece RatePiece Rate: Pay based on number of units : Pay based on number of units produced.produced.

CommissionCommission: Pay based on a percentage of sales.: Pay based on a percentage of sales.

• Offer competitive employee benefits.Offer competitive employee benefits.