MIE 201 - Cumulative Exam 2

What is operations management?

The development and administration of the activities involved in transforming resources into goods and services

What is intangibility?

Going to a concert or sports event; not something you can physically touch

What is the inserpabillity of production and consumption?

The services provided happen as they are used; chiropractor, air travel

What is perishability?

A service cannot be stored or saved for later use: seats at a speaker’s presentation, tickets for a plane, etc

What is standardization?

Making identical, interchangeable components or even complete products

What is the ISO 9000?

A framework for documenting how a certified business keeps records, trains employees, and tests products

What is the ISO 14000?

A comprehensive set of environmental standards that encourages a cleaner world

What is a modular design?

A product made of interchangeable parts

What is the blockchain?

A secure database that records all transactions and is spread across multiple computers; the movement of a product through the supply chain can be traced

What is a fixed-position layout?

Bring all resources to central location, called “project organization”

What is a process layout?

Organizes the transformation process into departments; an example would be a hospital

What is a product layout?

Production broken down into simple tasks along an assembly line; cell phone/car

Which facially layout uses a assembly line?

Product layout

Which facility layout organizes the transformation process into departments?

Process layout

Which facility layout brings all the resources to one place?

A fixed-position layout

What does procurement really mean?

Buying/purchasing; decisions where the supplies come from is also important

Why is deciding where the supplies come from during purchase important?

Integrity, quality, and environmental impact of the source

What does outsourcing mean?

The contracting or manufacturing or other tasks to independent companies

What does routing mean?

Sequence of operations which the products must past

What does sequencing mean?

Assigning tasks to be done at specific departments, workers, or teams

What is benchmarking?

Measurement of one company’s quality of goods compared to the best-performing companies in the industry

What does sampling do?

Instead of testing all of the products, you only test a sample of them. This is usually required when the inspection procedures are quite expensive.

What percentage of small businesses fail within the first 5 years

Around 50% of them do

What organization offers managerial and financial assistance to small businesses?

The SBA, small business association

Which main industries attract small businesses?

Retailing and Services

What is involved in a business plan?

A statement of the rationale of the company and a step-by-step explanation of how your going to achieve those goals

What is Trade Credit?

When a business buys good or services from another business but pays them in the future; this maintains the cash flow of the business

What is equity financing?

Use of personal assets to buy goods or services instead of borrowing funds

What are social entrepreneurs?

Individuals who use entrepreneurship to address social problems

What are the 3 main forms of business?

Sole proprietorship, Partnership, and Corporations

What is the liability of a sole proprietorship company?

Unlimited liability

What is the most common form of business?

A sole proprietorship

How do partnerships get taxed?

The individuals owners’ income is taxed. This means they are simply taxed on their income

Which type of business is the least common?

Partnerships

What is a general partnership?

Each partner has unlimited liability for the debts of the business.

What is a Limited Partnership?

There is one general partner with unlimited liability, and there is a limited partner whose liability matches what he invested into the company

What amount of shareholders can a corporation have?

An unlimited amount

What type of liability does a corporation have?

Limited liability

Which type of business brings in the most income?

Corportations

What does a corporation charter mean?

The procedure required by the state before a business can become a corporation.

What is a private corporation?

This is a corporation owned by one or a few people closely involved with managing the business; this is usually a family business passed down

What type of business is most likely a family business?

A private corporation

How does a private corporation become public?

A IPO (Initial public offering)

What is a quasi-public corporation?

This is a corporation owned and operated by the government.

What does a quasi-public corporation focus on?

To provide a service to its citizens, not make a profit

What does a preferred stock entail?

The owners do not have a say in running the company, but they do have a claim to profit before other shareholders

What does common stock mean?

Owners do not get preferential treatment regarding dividends, but they do have voting rights

What is double taxation?

Corporations are technically required to pay taxes twice. First, they must pay taxes on their income. Then, they have to pay taxes on their dividends

How many people can be a shareholder in a S corporation?

Up to 100 shareholders

How is an S corporation taxed?

Lke a partnership, so no double taxation

What is the liability of a S corporation?

Limited liability

How many shareholders are allowed in a LLC

Unlimited number of shareholders

How are LLC’s taxed?

They are taxed as a partnership, so no double taxation

What is the liability of a LLC?

Limited liability

What is a leveraged buyout (LBO)

A group of investors borrow money to acquire a company

What is a dividend?

A payment a company gives to its shareholders, usually from its profits. They are also usually paid in cash

What does Preemptive right mean?

The right to buy public shares when they are first released to the public

What are the positives of Common Shareholders?

Preemptive rights and can vote for people in the corporation

What are the negatives of Common Shareholders?

They do not get preferential treatment regarding dividends

What are the positives of being a Preferred Shareholder?

They get priority on dividends when they are released

What are the negatives of being a Preferred Shareholder?

They do not have a say in how the company runs and don’t have the ability to buy new shares first

What is a Conglomerate Merger?

This is when two firms in unrelated industries merge together

What is the maximum number of people that a small business can employ?

500

What is a line of credit?

Agreement by which a financial institution promises to lend a business a predetermined sum of money

What is the Critical Path?

The minimum amount of time in which a process can be completed

What does the term poison pill mean?

A move in which a firm allows stockholders to buy more shares at a lower cost to avoid being taken over

What does the term Shark Repellent mean?

A strategy a company uses to make itself less attractive to a hostile takeover

What does the term Black Knight mean?

A company or investor that tries to take over another company without the target company’s approval

What does the term Golden Parachute mean?

A special agreement between a company and a top executive that ensures large financial benefits if the executive loses his job

What does the term White Knight mean?

A person, company, or entity that comes to the rescue of the other corporation if they are in a bad spot