Final Flashcards

1
Q

production

A

the creation of finished goods/services using the factors of production, historically meant manufacturing

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2
Q

production management

A

term used to describe all the activities managers do to help their firms create goods

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3
Q

operations management

A

a specialized area in management that converts or transforms resources (including human resources) into goods/services
ex] quality control, production scheduling

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4
Q

form utility

A

the value producers add to materials in the creation of finished goods/services

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5
Q

basic requirements of production

A
  1. to build and deliver products in response to the demands of the customer at the scheduled delivery
  2. to provide an acceptable quality level
  3. to provide everything at the lowest possible cost
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6
Q

process manufacturing

A

that part of the production process that physically or chemically changes materials
ex] boiling an egg

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7
Q

assembly process

A

that part of the production process that puts together components

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8
Q

continuous process

A

a production process in which long production runs out finished goods over time

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9
Q

intermittent process

A

a production process in which the production run is short and the machines are changed frequently to made different products
goal: to provide goods/services simultaneously

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10
Q

computer-aid design (CAD)

A

the use of computers in the design of products

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11
Q

computer-aid manufacturing (CAM)

A

the use of computers in the manufacturing of products

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12
Q

computer-integrated manufacturing (CIM)

A

the uniting of CAD with CAM

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13
Q

flexible manufacturing

A

designing machines to do multiple tasks so that they can produce a variety of products

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14
Q

leaning manufacturing

A

the production of goods using less of everything compared to mass production

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15
Q

characteristics of leaning manufacturing

A
  1. takes half the human effort
  2. have half the defects in the finished product
  3. requires 1/3 of the engineering effort
  4. use half the floor space for same output
  5. caring 90% less inventory
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16
Q

mass customization

A

tailoring products to meet the needs of individual customers

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17
Q

operations management planning

A

helps solve many problems in service and manufacturing sectors
facility location, telecommunicating, facility layout, material requirement planning, purchasing, Just-In-Time (JIT) inventory control, quantity vs quality

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18
Q

facility location

A

the process of selecting the geographc location for a company’s operation–minimize costs (move if necessary)

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19
Q

telecommunicating

A

working from home via computer

incentive: tax situation

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20
Q

facility layout

A

the physical arrangement of resources (including people) in the production process
assembly-line, modular, fixed position, process

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21
Q

material requirement planning (MRP)

A

computer based operations management system that uses sales forecasts to make sure that needed parts and materials are available to the right place and right time

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22
Q

enterprise resource planning (ERP)

A

newer version of the MRP that combines the computerized functions of all the divisions and subsidiaries of the firm into a single database

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23
Q

purchasing

A

the function in a firm that searches for high-quality material resources finds the best suppliers and negotiates the best prices for goods/services

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24
Q

Just-In-Time (JIT) inventory control

A

a production process in which a minimum inventory is kept on the premise and parts, supplies and other needs are delivered just in time to go on the assembly line

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25
Q

quality

A

consistently producing what the customers want while reducing errors before and after delivery to customer

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26
Q

six-stigma quality

A

quality measure that allows only 3.4 defects per million opportunities

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27
Q

statistical quality control (SQC)

A

process some managers use continuously to monitor all phases of production to assure quality is being built into the product from the beginning

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28
Q

statistical process control (SPC)

A

process of testing statistical samples of product components at each stage of the production process and plotting those results on a graph
any variances from quality standards are recognized and can be corrected if beyond the set standard

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29
Q

ISO 9000

A

the common name given to the quality management and assurance standards

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30
Q

ISO 14000

A

a collection of the best practices for managing an organization’s impact on the environment

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31
Q

program evaluation and review technique (PERT)

A

a method for analyzing the tasks involved in completing a given project, estimating the time needed to complete each task, and identifying the minimum time needed to complete the total project

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32
Q

critical path

A

the sequence of tasks that takes the longest time to complete

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33
Q

GANTT Chart

A

bar graph showing the production managers what projects are being worked on and what stage they are in at a given time

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34
Q

marketing

A

the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

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35
Q

customer relationship management (CRM)

A

process of learning about as much as possible about customers and doing everything you can to satisfy them (or even exceed their expectations) with goods and services
ex] Expedia, Travelocity

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36
Q

product

A

any physical good or service or idea that satisfies a want or need plus anything that would enhance the product in the eyes of the customers (such as the brand)

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37
Q

test marketing

A

process of testing products among potential users

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38
Q

brand name

A

a word, letter, or group of words or letters that differentiates one seller’s goods/services from those of competitors

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39
Q

promotion

A

all the techniques sellers use to inform people and motivate them to buy their products and services

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40
Q

marketing research

A

analysis of markets to determine opportunities and challenges, and to find the information needed to make good decisions

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41
Q

secondary data

A

data that has already been compiled by others and published in journals and books or made available online

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42
Q

primary data

A

data that you gather yourself

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43
Q

focus group

A

small group of people who meet under the direction of a discussion leader to communicate their opinions about an organization, its products, or other given issues

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44
Q

environmental scanning

A

the process of identifying the factors that can effect marketing success– global, technological, sociocultural, competitive, economic

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45
Q

customer market

A

all the individuals or households that want goods and services for personal consumption use

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46
Q

market segmentation

A

process of dividing the total market into groups whose members have similar obstacles

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47
Q

target marketing

A

marketing toward those groups an organization decides it can serve profitably

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48
Q

geographic segmentation

A

cities, counties, states, or region

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49
Q

demographic segmentation

A

age, income, education level

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50
Q

psychographic segmentation

A

values, attitude, interests

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51
Q

benefit

A

determining which benefits of the product to talk about

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52
Q

volume (or usage)

A

by volume of use, usage

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53
Q

niche marketing

A

process of finding small but profitable market segments and designing or finding products for them

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54
Q

one-to-one marketing

A

developing a unique mix of goods/ services for each individual customer

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55
Q

mass marketing

A

developing products and promotions to please large groups of people

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56
Q

relationship marketing

A

marketing strategy with the goal of keeping individual customers overtime by offering them products that exactly meet their requirement

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57
Q

B2B

A

business to business
all the individuals/ organizations that want goods/services to use in producing other goods/services or to sell/rent/supply goods to others

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58
Q

value

A

good quality at a fair price

benefits minus cost, want benefits>costs

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59
Q

distributed product development

A

handing off various parts of your innovation process (often to companies in other countries)

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60
Q

total product offer

A

everything that consumers evaluate when deciding whether or not to buy something
value product

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61
Q

product line

A

a group of products that are physically similar or are intended for a similar market

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62
Q

product mix

A

combination of product lines offered by a manufacturer

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63
Q

product differentiation

A

creation of real or perceived product differences

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64
Q

convenience goods and services

A

products that the consumer wants to purchase frequently and with a minimum effort

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65
Q

shopping goods and services

A

those products that the consumer buys only after comparing value, quality, price, and style from a variety of sellers

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66
Q

specialty goods and services

A

customer products with unique characteristics and brand identity
products perceived as having no reasonable substitutes, special effort to purchase

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67
Q

unsought goods and services

A

products that customers are unaware of, haven’t necessarily thought of buying, or finding that they need to solve an unexpected problem

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68
Q

industrial goods

A

products used in production of other products

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69
Q

bundling

A

grouping two or more products together and pricing them as a unit

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70
Q

trademark

A

a brand that has exclusive legal protection for both its brand name and design

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71
Q

manufacturer’s brand

A

brand names of manufacturer’s that distribute products nationally

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72
Q

dealer (private-label) brand

A

products that don’t carry manufacturers’ name but the distributor/retailers name

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73
Q

generic goods

A

nonbranded products that usually sell at a sizable discount compared to national or private label brands

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74
Q

knock-off brands

A

illegal copies of national brand name goods

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75
Q

brand equity

A

value of the brand name and symbols

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76
Q

brand loyalty

A

degree to which customers are satisfied, like the brand, and are committed to further purchases

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77
Q

brand awareness

A

how quickly or easily given brand name comes to mind when a product category is mentioned

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78
Q

brand association

A

linking of a brand to other favorable images

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79
Q

brand manager

A

manager who has direct responsibility for one brand or one product line

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80
Q

product screening

A

process designed to reduce the number of new product ideas being worked on at any one time

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81
Q

product analysis

A

making cost estimates and sales forecasts to get a feeling for profitability of new product ideas

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82
Q

concept testing

A

taking a product idea to customers to test their reaction

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83
Q

commercialization

A

promoting the product to distributors and retailers to get wide distribution, and developing strong advertisement and sales campaign to generate and maintain interest in the product among distributors and customers

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84
Q

product life cycle

A
theoretical model of what happens to sales and profits for a product class over time
introduction, growth, maturity, decline
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85
Q

target costing

A

designing a product so that it satisfies customers and meets the profit margins desired by the firm
demand based

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86
Q

competition-based pricing

A

strategy based on what all the other competitors are doing

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87
Q

price leadership

A

strategy by which one or more dominant firms set the pricing practices that all competitors in the industry follow

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88
Q

breakeven analysis

A

the process used to determine profitability at various levels of sales

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89
Q

total fixed costs

A

all the expenses that remain the same no matter how many products are made or sold

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90
Q

variable costs

A

costs that change according to the level of production

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91
Q

skimming price strategy

A

strategy in which a new product is priced high to make optimum profit while there’s little competition

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92
Q

penetration strategy

A

strategy in which a product is priced low to attract many customers and discourage competition

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93
Q

everyday low pricing (EDLP)

A

setting prices lower than competitors and then not having any special sales

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94
Q

high-low pricing strategy

A

setting prices that are higher than EDLP stores but having many special sales where the prices are lower than competitors

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95
Q

psychological pricing

A

pricing goods/services at price points that make the product appear less expensive than it is

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96
Q

marketing intermediaries

A

organizations that assist in moving good/services from producers to businesses (B2B0 and from business to customers (B2C)

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97
Q

channel of distribution

A

whole set of marketing intermediaries that join together to distribute in path

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98
Q

agent/brokers

A

brings buyers and sellers together and assist in negotiating an exchange but don’t take title in good

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99
Q

wholesaler

A

marketing intermediary that sells to other organization

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100
Q

retailer

A

organization that sells to ultimate customers

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101
Q

utility

A

the want-satisfying ability, or value, that organizations add to goods/services

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102
Q

time utility

A

adding value by having them when people want them

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103
Q

place utility

A

adding value by having them where people want them

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104
Q

possession utility

A

doing whatever is necessary to transfer ownership

credit, deliveries, installation guarantee, follow up services

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105
Q

information utility

A

adding value by opening two-way flows of info between market participants

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106
Q

service utility

A

add value by providing fast, friendly service during and after the sale and by teaching customers how to best uses products over time

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107
Q

merchant wholesalers

A

independently owned firms that take title to the goods they handle

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108
Q

jack robbers

A

wholesalers that furnish racks/shelves full of merchandise to retailers, display products and sell on consignment

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109
Q

cash and carry wholesalers

A

wholesalers that serve mostly smaller retailers with a limited assortment of products

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110
Q

drop shippers

A

wholesalers that solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer

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111
Q

intensive distribution

A

distribution that puts products into as many retail outlets as possible

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112
Q

selective distribution

A

distribution that sends products to only a preferred group of retailers in an area

113
Q

exclusive distribution

A

distribution that sends products to only one retail outlet in a given geographical area

114
Q

electronic retailing

A

selling goods/services to ultimate customers over the internet

115
Q

telemarketing

A

the sale of goods/services by phone

116
Q

direct selling

A

selling to customers in their homes or where they work

117
Q

direct marketing

A

any activity that directly links manufacturers or intermediaries with the ultimate customer

118
Q

cooperate distribution system

A

all organizations in the channel of distribution are owned by one firm

119
Q

contractual distribution system

A

members are bound to cooperate through a contractual agreements

120
Q

administered distribution system

A

producers manage all of the marking functions at the retail level

121
Q

supply chain (value chain)

A

sequence of linked activities that must be performed by various organizations to move goods from the sources of raw materials to ultimate customers

122
Q

supply chain management

A

process of managing all the movement and return and recycling when appropriate

123
Q

logistics

A

marketing activity that involves planning, implementing, and controlling the physical flows of materials, final goods and related info from points of origins to points of consumption to meet customers requirements at profit

124
Q

inbound logistics

A

bringing info from supplier to producer

125
Q

material handling logistics

A

movement of goods within a warehouse

126
Q

outbound logistics

A

managing flow from business buyers to ultimate customers

127
Q

reverse logistics

A

bringing good back to manufacturer due to defect or for recycling

128
Q

freight forwarder

A

organization that puts many small shipments together to create a single large shipment that can be transported cost-effectively to the final destination

129
Q

intermodal shipping

A

use of multiple modes of transportation to complete a single long distant movement of freight

130
Q

promotion mix

A

combination of promotional tools

131
Q

integrated marketing communication (IMC)

A

a technique that combines all the promotional tools into one comprehensive, unified promotional strategy

132
Q

advertising

A

paid, non-personal communication through various media by organizations and individuals who are in some way identified in the message

133
Q

product placement

A

putting products into TV shows and movies where they will be seen

134
Q

infomercial

A

full-length TV program devoted exclusively to promoting goods/services

135
Q

interactive promotion

A

promotion process that allowed marketers to go beyond a monologue where sellers try to persuade buyers to buy things, to a dialogue in which buyers and sellers work together to create mutual beneficial exchange relationships

136
Q

personal selling

A

face-to-face presentation and promotion of goods and services

137
Q

prospecting

A

researching potential buyers and sellers

138
Q

prospect

A

person who meets qualifying criteria

139
Q

qualifying

A

making sure that people have a need for the product, the authority to buy and willingness to listen to a sales message

140
Q

trial sale

A

a step in the selling process that consists of a question or statement that moves the selling process toward the actual close

141
Q

public relations (PR)

A

management function that evaluates public attitudes, changes policies/procedures in response to public’s request

142
Q

publicity

A

any info about an individual, product, or organization that’s distributed to public through media and that’s not paid for or controlled by sellers

143
Q

sales promotion

A

tool that stimulates customer purchasing and dealer purchasing and dealer interest by means of short term activities

144
Q

sampling

A

tool in which a company lets customers have a small sample of product for no charge

145
Q

word of mouth

A

tool that involves people telling each other about products they purchased

146
Q

viral marketing

A

using internet
paying customers to say nice things
commission

147
Q

blog

A

online diary that looks like a webpage but easier to create and update

148
Q

podcasting

A

a means of distributing audio and video programs via internet

149
Q

push strategy

A

producer uses advertising, personal selling, sales promotion, etc to convince wholesalers and retailer stock and sell merchandise

150
Q

pull strategy

A

advertising/promotional tools toward customers for products from retailers

151
Q

pick economy

A

customers who pick out products from online outlets or who do online comparison shopping

152
Q

accounting

A

the recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and other interested parties the information they needed to make good decisions

153
Q

managerial accounting

A

accounting used to provide information and analysis to managers inside the organization to assist them in making decisions

154
Q

certified management accounting (CMA)

A

a professional accountant who has met requirements, passed a qualifying exam, and been certified by the institute of certified management accountants

155
Q

financial accounting

A

accounting information and analyses prepared for people outside the organization

156
Q

annual report

A

a yearly statement of financial condition, progress, and expectations of the organization

157
Q

private accountant

A

an accountant who works for a single firm, government agency, or nonprofit organization

158
Q

public accountant

A

an accountant who provides accounting services to individuals or businesses on a fee basis

159
Q

certified public accountant (CPA)

A

an accountant who passes a series of examinations established by the American Institute of Certified Public Accountants (CICPA)

160
Q

auditing

A

a job of reviewing and evaluating the information used to prepare a company’s financial statement

161
Q

independent audit

A

an evaluation and unbiased opinion about the accuracy of a company financial statement

162
Q

certified internal auditor (CIA)

A

an accountant who has a bachelor’s degree and two years of experience in internal auditing, and who has passed an exam administered by the Institute of Internal Auditors

163
Q

tax accountant

A

an accountant trained in tax law and responsible for preparing tax returns or developing tax strategies

164
Q

government and not-for-profit accounting

A

accounting system for organizations whose purpose is not generating a profit but serving ratepayers, taxpayers, and others according to a duty approved budget

165
Q

accounting cycle

A

six step procedure that results in the preparation and analysis of the major financial statements

166
Q

journal

A

the record book or computer program where accounting data are first entered

167
Q

double-entry bookkeeping

A

the practice of writing every business transaction in two places

168
Q

ledger

A

a specialized accounting book or computer program in which info from accounting journals is accumulated into specific categories and posted so the managers can find all the information about one account in the same place

169
Q

trial balance

A

a summary of all the financial data in the account ledgers that ensure that figure are correct and balanced

170
Q

financial statements

A

a summary of all the transactions that have occurred over a particular period

171
Q

fundamental accounting equation

A

the basis for the balance sheet

172
Q

assets

A
liabilities plus owner's equity
economic resources (things of value) owned by a firm
173
Q

balance sheet

A

financial statement that reports a firm’s financial condition at a specific time and is composed of 3 major accounts (liablities, assets, owner’s equity)

174
Q

liquidity

A

the ease with which an asset can be turned to cash

175
Q

current assets

A

items that can or will be converted into cash within one year

176
Q

fixed assets

A

assets that are relatively permanent

177
Q

intangible assets

A

long-term assets that have no real physical form but do have value
patents, trademarks, copyright

178
Q

liabilities

A

what the business owes to others (debts)

179
Q

accountable payable

A

current liabilities are bills the company owes to others for merchandise or services purchased on credit and not yet paid for

180
Q

notes payable

A

short-term or long-term liabilities that a business promises to repay by a certain date

181
Q

bond payable

A

long term liabilities that represent money lent to the firm that must be paid back

182
Q

owner’s equity

A

the amount of the business that belongs to the owners minus any liabilities owned by the business

183
Q

retained earnings

A

the accumulated earnings from a firm’s profitable operations that were reinvested in the business and not paid out to stockholders in dividends

184
Q

income statement

A

financial statement that shows a firm’s profit after cost, expenses, and taxes

185
Q

net income/net loss

A

revenue left over or depleted after all costs and expenses, including taxes, are paid

186
Q

cost of goods sold (or cost of goods manufactured)

A

measure of the cost of the merchandise sold or cost of raw material and supplies used for producing items for resale

187
Q

gross profit (gross margin)

A

how much a firm earned by buying (or making) and selling merchandise

188
Q

operating expenses

A

costs involved in operating a business

189
Q

depreciation

A

systematic write off of the cost of a tangible asset over its estimated useful life

190
Q

statement of cash flows

A

financial statement that reports cash receipts and disbursements related to operations, investments and financing

191
Q

cash flow

A

difference between cash coming in and cash going out of the business

192
Q

ratio analysis

A

assessment of a firm’s financial condition using calculations and interpretations of financial ration developed form the firm’s financial statement

193
Q

Money

A

Anything that people generally accept as payment for goods and services

194
Q

Barter

A

The direct trading of goods and services for other goods and services

195
Q

Money supply

A

The amount of money the Federal Reserve Bank makes available for people to buy goods and services

196
Q

M-1

A

Money that can be accessed quickly and easily

Coins, paper money, checks

197
Q

M-2

A

Money in M-1 Plus money that takes a little more time to access
Savings, mutual funds

198
Q

M-3

A

M-2 and big deposits like institutional money market funds

199
Q

Reserve requirement

A

A percentage of commercial banks’ checking and savings accounts that must be physically kept in the bank

200
Q

Open market operations

A

Buying and selling of US Government bonds by the Fed with the goal of regulating the money supply

201
Q

Commercial bank

A

Profit-seeking organization that receives deposits from individuals and corporations in the form of checking and savings accounts and then uses some of these funds to make loans

202
Q

Demand deposit

A

Technical name for a checking account

Money can be withdrawn any time on demand from depositor

203
Q

Time deposit

A

Technical name for savings account

Bank can require prior notice before the owner withdraws money

204
Q

Certificate of deposit (CD)

A

Time deposit account that earns interest to be delivered at the end of the certificate’s maturity date

205
Q

Savings and loan Association (S&L)

A

A financial institution that excepts both savings and checking deposits and provides home mortgage loans

206
Q

Credit unions

A

Nonprofit, member and financial cooperatives the offer the full variety of banking services to their members

207
Q

Non-banks

A

Financial organizations that except no deposits to offer many of the services provided by regular banks

Pension funds, insurance companies, commercial finance companies, consumer finance companies, brokerage houses

208
Q

Pension funds

A

Amounts of money put aside by corporations, nonprofit organizations, or unions to cover part of financial needs of members when they retire

209
Q

Federal deposit insurance Corporation (FDIC)

A

An independent agency of the US government that ensures bank deposits

210
Q

Savings association insurance fund (SAIF)

A

Part of FDIC that ensures holders of accounts and savings and loan associations

211
Q

Electronic funds transfer (EFT) System

A

A computerized system that electronically performs financial transactions

Making purchases, paying bills, receiving paychecks

212
Q

Debit card

A

Electronic funds transfer tool that serves the same function as checks, withdraws money from checking account

213
Q

Smart card

A

Electronic funds transfer tool that is a combination of a credit card, debit card, phone card, drivers license etc.

214
Q

Letter of credit

A

A promise by bank to pay the seller a given amount if certain conditions are met

215
Q

Banker’s acceptance

A

A promise that the bank will pay some specified amount at a particular time

216
Q

World bank

A

Bank primarily responsible for financing economic development

217
Q

International monetary fund (IMF)

A

Organization that assists to smooth flow of money among nations

218
Q

Finance

A

The function in a business that requires funds for the firm in manages those funds within the firm

219
Q

Financial management

A

The job of managing a firm’s resources so it can meet its goals and objectives

220
Q

Financial managers

A

Managers who examined financial data prepared by accountants and recommend strategies for improving the financial performance of the firm

221
Q

Short term forecast

A

Forecast that predicts revenues, costs, and expenses for a period of one year or less

222
Q

Cash flow forecast

A

Forecast that predicts the cash in flows and outflows in future, Usually months or quarters

223
Q

Long-term forecast

A

Forecast that predicts revenues, costs, and expenses for a period longer than a year and as far as five or 10 years into the future

224
Q

Budget

A

A financial plan that sets forth managements expectations and, on the basis of those expectations, allocates the use of those specific resources throughout the firm

225
Q

Capital budget

A

Highlights of firms spending plans for a major asset purchases that often require large sums of money

226
Q

Cash budget

A

Estimates cash flows in and out during a particular period Like a month or a quarter

227
Q

Operating or master budget

A

Ties together the firms other budgets and summarizes it’s proposed financial activities

228
Q

Financial control

A

Process in which a firm periodically compares it’s actual revenues, costs, and expenses with its budget

229
Q

Capital expeditures

A

Major investments and either tangible long-term assets such as land, buildings, equipment or intangible assets such as patents, trademarks, copyrights

230
Q

Debt financing

A

Funds raised in various forms of borrowing that must be repaid

231
Q

Equity financing

A

Money raised from within the firm, from operations or through the sale of ownership in the firm such a stock or venture capital

232
Q

Short-term financing

A

Funds needed for a year or less

233
Q

Long-term financing

A

Funds needed for more than a year, usually 2 to 10 years

234
Q

Trade credit

A

The practice of buying goods and services now and paying for them later

235
Q

Promissory note

A

A written contract with a promise to pay A supplier a specific sum of money at a definite time

236
Q

Secured loan

A

A loan backed by collateral, something valuable such as property

237
Q

Unsecured loan

A

A loan that doesn’t require any collateral

238
Q

Line of credit

A

A given amount of unsecured short-term funds a bank will lend to a business, provided the funds are already available

239
Q

Revolving credit agreement

A

A line of credit that’s guaranteed but usually comes with a Fee

240
Q

Commercial finance companies

A

Organizations that make short-term loans to borrowers who offer tangible assets as collateral

241
Q

Factoring

A

The process of selling accounts receivable for cash

242
Q

Commercial paper

A

Unsecure promissory notes of $100,000 and at that mature come due in at 270 days or less

243
Q

Term loan agreement

A

A promissory note that requires the borrower to repay the loan in specified installments

244
Q

Risk/return trade-off

A

Principle that the greater the risk a lender takes in making a loan, the higher the interest rate required

245
Q

Indenture terms

A

Terms of agreement in a bond issue

246
Q

Secured bond

A

A bond issued with some form of collateral

247
Q

Unsecured bond

A

A bond back only by the reputation of the issuer

Debenture bond

248
Q

Venture capital

A

Money that is invested in new or emerging companies that are perceived as having a great profit potential

249
Q

Leverage

A

Raising needed funds through borrowing to increase a firms rate of return

250
Q

Cost of capital

A

Rate of return a company must earn in order to meet the demands of its lenders and expectations of its equity holders

251
Q

Initial public offerings (IPO)

A

First public offering of a corporation stock

252
Q

Investment bankers

A

Specialist who assist in the issue and sale of new securities

253
Q

Institutional investors

A

Large organizations that invest their own funds or fund of others

254
Q

Stock exchange

A

An organization whose members can buy and sell/exchange securities for companies and individual investors

255
Q

Over-the-counter market

A

Exchange that provides a means of trade stocks not listed on the national exchanges

256
Q

NASDAQ

A

A nationwide electronic system that links dealers across the nation so that they can buy and sell securities electronically

257
Q

Securities and exchange commission

A

The federal agency that has responsibility for regulating the various stock exchanges

258
Q

Prospectus

A

A condensed version of economic and financial information that a company must file with the SEC before issuing stock

259
Q

Stock

A

Share of ownership in a company

260
Q

Stock certificate

A

Evidence of stock ownership that specifies the name of the company, the number of shares it represents, and the type of stock being issued

261
Q

Dividends

A

Part of the firms profits that the firm may distribute to stockholders as either cash payments or additional shares of stock

262
Q

Common stock

A

Basic form of ownership, confers voting rights and the right to share in the firms profit through dividends if approved by the firms board of directors

263
Q

Preferred stock

A

Stock that gives its owners preference in the payment of dividends in an earlier claim on assets in common stockholders, if company is forced out of its business and its assets sold

264
Q

Bond

A

A corporate certificate indicating that a person has lent money to the firm or government

265
Q

Maturity date

A

The exact date the issuer of a bond must pay the principal of the bondholder

266
Q

Interest

A

The payment the issuer of the bond makes to bondholders for use of the borrowed money

267
Q

Debenture bond

A

Bonds that are unsecured

268
Q

Sinking fund

A

Reserve account in which the issuer of a bond periodically retire some sort of the bond principal prior to maturity so that enough capital will be accumulated by the maturity date to pay off the bond

269
Q

Stockbroker

A

A registered rep at genitive who works as a market intermediary to buy and sell securities for clients

270
Q

Diversification

A

Buying several different investment alternatives to spread the risk of investing

271
Q

Capital gains

A

Positive difference between the purchase price of the stock and it sale price

272
Q

Stock splits

A

An action by a company that gives stockholders two or more shares of stock for each one they own

273
Q

Buying stock on margin

A

Purchasing stock by borrowing some of the purchase cost from the brokerage firm

274
Q

Junk bonds

A

High risk, high interest bonds

275
Q

Mutual fund

A

Organization that buys stocks and bonds and sells shares in the securities to the public

276
Q

Exchange traded funds (ETF)

A

Collection of stocks, bonds, and other investments that are treated on exchanges, but are treated more like individual stocks then like a mutual fund

277
Q

Dow Jones industrial average

The Dow

A

The average cost of 30 selected industrial stocks, used to give an indication of the direction of the stock market

278
Q

Program trading

A

Giving instruction to computers to automatically cell if the price of a stock tips to a certain point to avoid potential losses