General Appliances Essay

Introduction:The General Appliance Corporation is a manufacturer of all types of home appliances. The company has a decentralized, divisional organizational structure, which consists of four product divisions (electric stove, laundry equipment, refrigeration and miscellaneous appliance division), four manufacturing divisions (chrome products, electric motor, gear and transmission and stamping division) and six staff offices (finance, engineering, manufacturing, industrial relations, purchasing and marketing staff). The staff offices do not have functional authority over the divisional general managers, who are each responsible for their own divisional personnel. The manufacturing division made approximately 75 percent of their sales to the product division. In addition, the parts made by the manufacturing division is designed and engineered by the product divisions. Since the eight divisions are expected to act like independent companies, the transfer prices are negotiated amongst themselves. But, if two divisions could not agree on a price, they submit the dispute to the finance staff for arbitration. The product division does not have the power to decide whether to buy from within the company or from outside. If there was a disagreement with the sourcing, the manufacturing division could appeal to the purchasing staff to reverse the decision. Problem:At the General Appliance Corporation, the purchasing staffs are the personnel that decide which part would continue to be manufactured within the company (org. chart may need to be revised). When the part is decided to be manufactured internally, the manufacturing division must hold the price at a level the product (purchaser) division could purchase it outside. Currently, the managers do not have the freedom to source and choose the alternative that is in their best interest, even though an alternative for sourcing does exist. The three problems that exist in the company are:-Determining a transfer price that includes the extra $0.80 per unit spent on developing the new quality standards. Also, the arbitration committee should determine whether the appearance is a subjective or objective matter. -An excess capacity (supply is greater than demand) caused a temporary  decrease in the selling price. -The standard price used for calculations of the total cost, profit and proposed price is determined from the price given in a competitor’s proposal – this is not a definite price. Investment Centres – don’t know when to produce or when to outsource (what role does innovation or engineering for lower costs play?)For each case, calculate if it’s better to outsource or manufactureArbitration committee which considers all â€Å"staff† functionsDo something quick & fast (cheap) and easy to doAnalysis:Stove Top Problem – Survey has shown that the company’s reputation as a producer of quality products has deteriorated, and resulted in the Chrome Products Division implementing quality improvements to the stove tops. Chrome has proposed to increase the price of the stove top by $0.90; $0.80 represents the additional costs of quality improvements and a $0.10 profit mark-up. The Electric Stove Division does not see the improvements as necessary changes since there is no change in engineering specifications, the changes made were never requested or approved, consumers may not even notice or want the change, and believes that the improvements made will only bring the quality level of the stove tops to the competitor’s level. Ultimately, Electric Stove sees these quality changes as being more subjective rather than objective. The engineering department of the manufacturing staff has verified that the new improvements were of superior quality then of their competitors and the costs were reasonably allocated. Thermostatic Control Problem – Electric Motor Division has been able to consistently reduce the price of the thermostatic control units to mirror the price of Monson Controls Corp. from $3.00 in 1984 to $2.40 in 1987. Monson has decided to further reduce their price to $2.15, which according to the general manager of Electric Motor Division, would result in selling at a loss rather than a profit. The GM believes that they are just as efficient as Monson, therefore Monson must be selling at a loss at $2.15. Laundry Equipment and the Refrigeration Division both require a total of 120 000 units for their division (100 000 units for Laundry and 2 000 units for Refrigeration). Refrigeration has made an agreement with Electric Motor that  they will be able to competitively source to the lowest bidder, in this case, Monson for $2.15. Laundry Equipment believes that for such a large order, they could probably obtain a lower price than $2.40 if they were to outsource. In reviewing this dispute, the Finance Staff stated that there was excess capacity in the market that results in soft prices. The purchasing staff believed that Refrigeration could purchase their requirements at $2.15 for the next year but if the corporation’s orders were all place externally, the price would rise to $2.40 through increase in demand or limited supply. Considering the 120 000 units of thermostatic control that is required by both the Laundry Equipment and the Refrigeration Division, and the fact that their requirement is large enough to increase Monson’s price of $2.15 to $2.40, General App. will have to outsource and purchase from within. Assuming that the more units General App. outsources, the price will gradually increase due to the increase in demand. The best combination of outsourcing and purchasing from within would be to outsource 60 000 units at an estimated price of $2.25 and purchase 60 000 units internally for $2.40. This would cost the organization $279 000, a savings between $1 000 and $9 000. The average price per unit is $2.325, less than the cost of the market price if the required volume was entirely outsourced. It is also less then purchasing the entire volume internally. This would result in Laundry Equipment saving $7 500 and costing $3 500 to Refrigeration as oppose to purchasing their required volume at $2.15. Transmission Problem – Laundry Equipment has previously entered into an agreement with Thorndike Machining Corp to purchase one-half of its transmission for 10 years. Two years before the expiration of the agreement, General App. decided to manufacture their own transmissions to extend their capacity. Thorndike proposed a price reduction of $0.50 consistently for the next two years with a new economy transmission unit at a price of $10. The Gear and Transmission Division estimates that they can replicate a comparable model of the economy transmission at a competitive price of $9. The Gear and Transmission Division’s proposal failed to eliminate the cost of design features of $0.50 per unit. This would bring the proposed total  unit cost for G&T from $11.66 to $11.11. This error makes Thorndike’s proposed price of $11.21 appear more favourable. Bibliography: Anthony, Robert N., and Vijay Govindarajan. Management Control Systems. New York: McGraw-Hill/Irwin, 2000.

Argumentative essay: Sex education in school Essay

In the U.S, more than 750,000 girls ages 15-19 become pregnant every year. More than 80 percent of these are unintended pregnancies, according to dosomething.org. That is a great amount of teenagers that could have potentially dodged a bullet with a little more sexual education. Will a lack of sexual education continue to play a role in the overwhelming amount of teenage mothers in America? In my opinion of course it will. Just like the article states, sex education is rising in American schools, and this is in favor of my argument on how I greatly support this upward movement my reason is we are just falling way behind! Further thought out and well presented sex education will reduce teen pregnancy and spread of sexual diseases. How exactly will better sex education in the states lead to fewer sex incidents within the sexually active community? Simply by education. Lack of education in anything will not give you positive results. Although it is said that there is no strong proof tha t teaching sex education will have any effect on teenagers and young adults, there is proof. Ex. Hechinger writes â€Å"Analysis in sex education in Sweden, Holland, France, Great Britain and Canada show us lagging far behind† (143). Reading the article and noticing the particular countries mentioned, I went to research. The countries mentioned are up to par with America as far as development and economy go, but fall way behind when it comes to all things sexual! We not only have higher teenage birth rates, we also have higher sexually transmitted diseases and lower use of oral contraceptives. The statistics and education don’t lie. I would have personally benefited from a more well put together sex education class and many other young lady’s would agree. (Rodriguez 2) I’m sure now the reader is wondering if there is a deeper reason for my argument. Yes there is. I am teen mother, I am a statistic, one of the person that adds on to the lack of sex education in America. One of the many teenager girls that had a lack of sexual education. I thought it could never happen to me just like in the article, ex, Hechinger writes â€Å"They believe ‘It can’t happen to me’.† (144). It wasn’t arrogance or ignorance it was my lack of understanding and me not wanting to ask questions related to sex. I now ask myself how many pregnant teenagers had the same questions I did? Lets follow in the countries listed in the article’s foot steps, in fact we have already started, considering sex education has increased dramatically in the last 5 years. Let it keep rising! I stand by my argument, lets give these confused teenagers the knowledge to rely on, just like Sweden, Holland, France, Great Britain and Canada have. They are statistically doing better the article speaks on it and so I stand by my argument. I give my full su pport to the growth of sexual education, I wonder if Laredo agrees with me? (Rodriguez 3) Hechlinger, Fred M. â€Å"The First Step in Improving Sex Education: Remove the Hellfire.† Reading and Writing Short Arguments.Ed. William Vesterman. New York: Mayfield Publishing, 1994. 143-146

Metabical Case Essay

The weight loss drug vailable in three four-week packages. The four week packaging was at the specific point where the consumer did not have to spend too much money to buy it, yet got invested in the product enough that they would come back to buy the second and third portions Marketing Research – According to the US survey 34% overweight 25. % obese 4. 7% severely obese – Health care providers were positive about the prospects of weight loss drugs. – Responses of individuals: indicates 12% would immediately opt for such a solution. – Focus group: Need of Prescription-strength drug with FDA approval & clinical results o backup weight loss results. Decision making The process of decision making for the consumers would follow the hierarchy of effects and would include the following steps Users involved in word of outh publicity – First prescription drug to be approved by the FDA specifically for weight loss of overweight individuals – credibility – First prescription drug for BMI of 25-30 – It worked on low dose formulation hence stress on liver and heart was lesser – Side effects were less severe and conditional – Behavioral modifications and healthier eating habits – Results were seen on an average in 12 weeks – More comprehensive support plan – The above advantage could be used for positioning in the following ways: Premium pricing as it is the only FDA approved prescription drug for weight loss. Strikingly different from dietary supplements for weight loss Segmentation & Targeting multi cluster segmentation Demographic – Income levels – High Income group, since they are ready to pay out of their pockets. – Gender- Females are more weight conscious. – Age: 35+ – Educa tion: college plus Psychographic : Based on, Physical activity, Food preferences, Nutrition, Self image, Overall health – â€Å"l want to be healthier† – † I want to fit into my skinny Jeans† Geographic : US is the largest geographic segment where 65% of the entire adult population is over-weight, obese or severely obese . Targeting customers with a BMI of 25-30 Positioning Strategy Positioning as a ?Life saving drug† Those 20 extra pounds can kill you. Being overweight leads to heart disease, high blood pressure, diabetes â€Å"It†s time to get Healthy- Metabical can help. † Positioning as a ?Motivational Therapeutic drug† â€Å"Discover a happier and a more attractive you† – Increases confidence – Boosts self- esteem Marketing Communication Strategy Electronic media – TV – Radio – Social media Print media – NEWS – Magazines Viral media DTC and prescriber advertising ?Free lunch† pre launch program Metabical Challenge – Biggest looser contest Medical education events Thank you

Food Lion Research Paper Example | Topics and Well Written Essays - 2000 words

Food Lion - Research Paper Example verseas; currently being represented in over 70 countries and seeking to integrate with the Midwestern and Western markets of grocery retail; rather than forever being attributed to the southeast/mid Atlantic region. The mission statement of Food Lion reads as follows: â€Å"Food Lions mission is to ensure that we remain the low price leader in the supermarket industry without compromising quality or customer satisfaction† (Delhaize, n.d.). Naturally, in order to achieve this goal, it is necessary for the human resources Department/organization to ensure that the needs of employees are met, a culture is defined, and effective policies which relate to this mission statement can be trained on and affected. Rather than understanding Food Lion’s mission statement as something of a separate issue to human resources, it must be understood and appreciated that human resources are integral in seeking to accomplish the goals that the mission statement sets forward. Assess the common HR challenges facing this organization (e.g., high turn-over, low wages, lack of skilled workers, etc.). Recommend an HR strategy you would implement to overcome the challenges assessed.   The core problem that Food Lion faces is the fact that it primarily hires low wage earners that have very few marketable skills. As a direct result of this, Food Lion experiences an extraordinarily high turnover rate; as individuals soon a look for other jobs that are more lucrative based upon the skills and valuable work experience that have gained while working at Food Lion. This extends not only to individuals responsible for inventory control, customer relations, and warehouse work, it encompasses the full gamut of logistics and supply that the Food Lion brand leverages each and every day as a function of encouraging further profitability. However, rather than coming to accept the fact that Food Lion is due to continually experienced high turnover rates from these low-wage earners, there are human

Initiate the Steps of Evidence Based Practice Essay

Initiate the Steps of Evidence Based Practice - Essay Example Therefore, this paper aims at highlighting the skills and knowledge that the implementation of evidence based practice requires, given the consistency that this process demands. The clinical practice that the paper will focus on is the reason behind proper washing of the hands and the use of personal protective equipment (PPE) as a measure of infection control. The background questions that guide the relevance of this clinical practice is how often do we see nurses on a unit washing their hands. In addition to that, the practice is based on the definition of effective hand washing and what the purpose of personal protective equipment is in the nursing practice. Besides, the question of how healthcare providers get bacterial contamination comes into light. The practice of hand washing is a first break of infection. It represents the cheapest and most effective way of preventing infections including the nosocomial infections. Many of the HAI cases are preventable by implementing a combination of strategies, which include environmental cleaning and control, the use of personal protective equipment and the utilization of precautions concerning isolation. The use of antiseptic agents as a concept of hand washing began in the 19th century. In 1961, the United States Public Health Service released a film that demonstrated the training of techniques used in effective hand washing and recommended it for use by healthcare workers. In the years 1975 and 1985, there were releases of formal guidelines on the practices on hand washing in hospitals as published by CDC (Isaacs, 2012). Moreover, the history of personal protective equipment dates back to 1970 when the United States CDC recommended the use of seven categories of isolation. Fast track to the year 1983, the precautions of isolation on secretion or drainage, tuberculosis, blood and body fluid were recommended. The CDC further extended the precaution levels in the year 2007 to envisage safe injection

Leadership and change Essay Example | Topics and Well Written Essays - 2500 words

Leadership and change - Essay Example Transformational leaders have the capability to encourage others, supporting their followers to respect and trust them. Companies require leaders who are capable of coping with this massive change, maintain day to day functions, and offer a competitive gain even at the time of downsizing. Transformational leaders can motivate and encourage their followers, uniting them for a combined cause, causing better productivity, performance, as well as job significance. The second section - Literature Review - will highlight the theories and concepts of transformational leadership. Third section will explain why transformational leadership is the appropriate approach to adopt at the time of downsizing. Fourth section will discuss the limitations of this leadership approach. Fifth section will reflect on the needs to develop the appropriate leadership skills, and sixth chapter will conclude the paper by providing the summary of the findings. The theory of transformational leadership has its origins with leadership scholar James MacGregor (Bass & Riggio, 2012). He presented the preliminary framework for the theory of transformational leadership by recognizing what he believed two opposed aspects - transactional leadership and transformational leadership (Bass & Riggio, 2012, p. 102). In transactional leadership, leaders keep a rapport with their team as a series of â€Å"exchanges or bargains† (Avolio & Yammarino, 2013, p. 82) to satisfy existing requirements. Transformational leadership bypasses the conventional form of exchanging incentives and attains preferred performance by intellectually motivating, and encouraging followers to go beyond their self-interests for a better mutual objective. Leadership has exceeded beyond the basis of simplifying the necessary performance of staff to boost the value of the productivity. Kearney & Gebert (2009) significantly developed

Development of the Modern Railroad in America Essay

Development of the Modern Railroad in America - Essay Example In 1740 the machine with the cylinder in length of 2,74 m and diameter of 76 cm during one day performed the work which brigades of 25 person and 10 horses, working in shifts, were carrying out for a week. Nevertheless, machine of Newcomen was far from perfection. It transformed to mechanical energy only about 1% of thermal energy and as a consequence, devoured huge amount of fuel, that, however, had no special value when the machine worked on collieries. About the invention of Newcomen it is possible to say, that it was really steam machine, more truly, the pair atmosphere machine. Therefore the inventor of the steam machine is the Englishman Thomas Newcomen who has developed the pair atmosphere machine in 1712. During same time in England James Uatt also worked on the creation of the steam machine. Debugging the model of the pair atmosphere Newcomen's machines, Uatt was convinced of low efficiency of similar machines. It was clear, that the basic lack of machine of Newcomen was the heating and cooling of the cylinder. Uatt removed this lack. Subsequently the universal steam engine of double action with continuous rotation (Uatt's steam machine) received a wide circulation and played a significant role in transition to a mechanical production. Since 1800 to 1821 Northern war was held. ... Since 1800 to 1821 Northern war was held. So the further development of railway transportation was stopped for some time. But steam machines which were created at the end of 18 centuries had the big popularity. Modern safe position of railways of Northern America is caused by unprecedented growth of freight traffic. This situation promotes also to rise in branch of manufacture of a rolling stock as the railway companies increase transportation capacities. Since then the financial position of the large companies has become stronger, demand for their services exceeds the offer. These changes bring favorable prospects to the railway companies. For many railway companies of Northern America the last years were successful from the point of view of growth of transportations and, hence, incomes. The stage-by-stage decision of these problems and a general economic situation allowed the bases for positive forecasts of Northern America railways development. (Orme 2000) Prospects of cargo railways of Northern America are determined by two tendencies: proceeding economic rise in the countries of continent and globalization of economy. High rates of economic growth in the USA as a whole - 44,2 % since 1980 - have caused a significant gain of demand for services of a truck transport. And the parameter for railways in the the USA, 52 %, is better than the general parameter that has allowed to increase its share in the market from 35 up to 39 %. (Orme 2000) Railways have already confirmed the ability to correspond to significant economic growth. Within the next two decades 50 % growth of the transport market is expected. This gain can be mastered both by the rail, and motor transport. Railway has preconditions for development of throughput and ability to take with smaller

Capital Investment Assignment Example | Topics and Well Written Essays - 1750 words

Capital Investment - Assignment Example Even though after the democratic elections conducted in the year 2005, the country has been advised to be a safer destination for capital investments, there have been apprehensions about the stability of the country and the chances of the conflicts arising again which may hinder the sustained growth of the company's operations in the country. Apart from the political risk, there is the issue of Company's Social Responsibility and the related costs and ethical values that need consideration before taking any decision on investing in Medco Republic. In addition the report focuses on the foreign exchange risk in dealing with the currency of Medco Republic. The objective of this report therefore is to consider the soundness of the proposed capital investment from the angles of financial feasibility, country risk of Medco Republic and the foreign exchange risk in undertaking transactions in the currency of Medco Republic as against the British Pounds as the investments the commitment of substantially larger sums by the Company to be recouped over a longer period. The analysis is based on a review of the net cash flows from the project using the recognized capital budgeting evaluation methods of Net Present Value (NPV) and Internal Rate of Return (IRR), taking the weighted average cost of capital of the Company of 15% as the hurdle rate and the rate for discounting the present value of future cash flows from the project. Financial Feasibility The financial feasibility of any capital investment proposal can be judged based on the ability of the project to enhance the shareholders' wealth by contributing positive net cash inflows from the proposed investments. Just any other domestic capital project is being evaluated, for the international investments can also be evaluated by calculating the 'Net Present Value' (NPV) future cash flows expected out of the project. The NPV of the project depends on the initial investment or initial cash flow, expected future cash flows and the cost of capital. Based on the comparison of the NPV of the future cash flows with the proposed capital investment the feasibility of the project can be established. While working out the NPV the effect of the factors like Sales creation (additional sales), cannibalization (loss of sales), opportunity cost, transfer pricing and fees and royalties on the future cash flows should be taken into account. The Internal Rate of Return (IRR) is the other criter ion that needs to be carefully looked into while deciding on the capital investment. In the case of the proposed capital investment proposals the NPV and IRR from the projects have been worked out and exhibited in the Appendix. From the NPV calculations it is observed that the project has a negative net present value which implies that the project is not acceptable. The internal rate of return (IRR) is also much lower than that of the weighted cost of capital of the company. As against the cost of capital of 15% the IRR from the project works out to 5%. This also indicates that the proposed investment is unviable. Even though the Company can set off the tax payments in the country of Medco Republic against its income tax

The role of Law Enforcement in the community Assignment

The role of Law Enforcement in the community - Assignment Example 2. The purpose of this paper will be to analyze the role of law enforcement in the community, their effectiveness of the roles over time and the changes one can make when serving a local law enforcement organization. The role of law enforcement in the community is to maintain order and to prevent violation of people’s right (Zachary, 1999). Police is the body that deals directly with the law enforcement; they chase down criminals breaking the law risking their lives for the better of the community. Police react to any reported suspicious or criminal activities. They also prevent domestic violence from happening and this helps to improve the society by making people live in peace. The introduction of emergency numbers like 911 helps to minimize the rate of crimes in the society. Law enforcement agencies have improved the way of living among people in the society by responding first, preventing crimes, and controlling traffic jams. Law enforcement was introduced in many communit ies due to the gap between the poor and the rich. The rich wanted personal protection, property protection and life protection from the increasing population of people it led to the introduction and creation of law enforcement agencies. Justice is offered by law courts by giving the punishment either by fines or imprisonment (Zachary, 1999). 3. Law enforcement in a community gives immune and safe feeling to the people in the society because of the set laws that are not regularly changed. Law enforcement has changed and improved greatly over time due to the improvement and advancement of technology. Invention of computers, cars, and the CCTV cameras has led to effective enforcement of law, police and other agencies can be able to enforce the law over a wide coverage by use of satellites and other technological equipments (Hess, & cho, 2008). Fraud has also been reduced

Discussion Board Assignment Essay Example for Free

Discussion Board Assignment Essay In biology a species is a group of animals that is able to mate and produce healthy offspring. According to the biology online dictionary, population is a group of organisms of one species that interbreed and live in the same place at the same time. This discussion is based on the Nile crocodile which is found in Africa. Its species is biologically known as Crocodylas niloticus. It can grow to length of seven metres, and although it mainly feeds on larger mammals including human beings it can also feed on fish. If we take the year 2000 as our time zero then we might see a great change in the size of the body of the Nile crocodile in coming years. The trait that will most likely change in this species is the size of teeth. As at now, the Nile crocodile has got big teeth which are used to crush the large prey it catches. This means that the main source of food will be fish. Since most of fishes available are small in size then it means that the big teeth will be of no use. The crocodiles which are big in the size of their bodies are going to die since the food available will be less and only efficient for the ones which are small in size. As time goes by and due to unavailability of enough food, you will find that small sized crocodiles will have a higher chance of survival as a result of natural selection. Due to environmental changes and human encroachment, in future wild animals (prey) will be fewer. Human beings are increasingly destroying the wild animals’ habitats in Africa, thereby, reducing the population of the wild animals which are the main crocodiles’ prey. It is also worth to note that, environmental changes like global warming which is causing severe droughts in Africa is affecting the populations of the wild animals (crocodiles’ main prey). REFERENCE Biology online, retrieved on 31st, October, 2008, available at http://www. biology-online. org/dictionary/Population Species of crocodilians, retrieved on 31st, October, 2008, available at http://science. jrank. org/pages/1867/Crocodiles-Species-crocodilians. html

Purpose and Use of Different Accounting Records

Purpose and Use of Different Accounting Records Accounting record is defined as the all of the documentations involved in the preparation of financial statements and records which are relevant to financial review and audits which include recording of assets and liabilities, ledgers, journals, and any other supporting documents like invoices. Ledger: Maintaining ledger is a must in all accounting system. Ledger is used for preparing trial balance which checks the arithmetical accuracy of the accounting books. Ledger is the store-house of all kind of information which is used for preparing final accounts and financial statements. Prime entry books: The other one is prime entry books which are also known as books of original entry are books where transactions are first recorded. The main books of prime entry consists of sales day book, purchase day book, sales return day book, purchase return day book, general journal and cash book (Ducha, et.al, 2008). Accounting plays important and useful role by developing the information for providing answers to many questions faced by the users of accounting information. It provides information how good or bad the financial condition of the business is, which activities or products have been profitable. Accounting is important for a business entity for the following reasons: Accounting record, set on the base of even practices, will assist a business to compare results of one period with another period. Insulating records, backed up by proper and genuine vouchers are good evidence in a court of law. Increased volume of business results in large number of transactions and no businessman can remember everything. Accounting records avoid the necessity of remembering various transactions. Fundamental concepts of accounting Accruals concept of accounting: Other than the cash flow statement, the accounts have been set on an accruals basis. The accruals basis of accounting involves the non-cash of transactions to be mirrored in the financial statements for the period in which those effects are experienced and not in the period in which cash is actually received or paid (Open University Course Team, 2006). Going concern: The accounts have been prepared on a going concern basis which means that the accounts have been prepared on a going concern basis. It further clears that the accounts have been prepared on the assumption that the authority will continue to operate for the foreseeable future. The Avenue account and Balance Sheet assume no intention to significantly curtail the city Councils operations (Open University Course Team, 2006). Consistency concept: There are a number of different ways in which some concepts can be applied. Each business must choose the approach that gives the most reliable picture of the business, not just for this period, but over time also. According to the consistency convention, when a method has been adopted for the accounting treatments of an item, the same method will be adopted for all subsequent occurrences of similar items. However, it does not mean that the firm has to follow the method until the firm closes down. (Open University Course Team,2006). Prudence Concepts: The account should be prudent when preparing financial statements. In other words, if something is in doubt, plan for the worst and, if a transaction has not yet been completed ignore ant possible benefits that may arise from it (Open University Course Team, 2006). Business entity concept: It is one of the main accounting principles of accounting this concept says that Business should be treated separately from the property owner or investor In simple words we can say owner of the business should be treated separately from the business whatever profits come in to the business should be taken in company account. Under the business entity concept, the activities of a business are recorded separately from the activities of its owners, creditors, or other businesses (Ducha, et.al, 2008). Different factors of accounting system: Computerised accounting system: Keeping accurate accounting records is a vital part of managing an organisation. Apart from helping to keep it afloat financially and legally, it is also a requirement of funding bodies. Smaller groups can usually manage with simple book-keeping procedures but bigger groups juggling with larger sums of money and more complex financial transactions may find their workload eased by using a computerised accounting system. The good news is that there are easy to use and reasonably priced computerised accounting packages on the market that are either aimed at, or can be adapted to, voluntary sector organisations (Ducha, et.al, 2008). Manual Accounting Systems: Accounting systems are manual or comprised. Understanding a manual accounting system is useful in identifying relationships between accounting data and reports. Also, most computerised systems use principles from manual systems. In other words, Manual accounting and bookkeeping systems are the traditional form of maintaining a businesses accounts and records. They involve keeping various ledgers and files which typically include a cash book, sales and purchase day books and petty cash sheets. Although the use of basic manual bookkeeping systems requires little knowledge or skill in accounting, they are still the preferred method of accounting for those who have used them in the past (Drew, et.al, 2000). Considering factors when using computerised and manual accounting system: The capacity to generate sales /increase invoices; the necessity to compute/include VAT in accounting; cost how much can a firm truthfully afford on software, updates and support, the capability to process payroll, and stock control are the considering factors of computerised accounting system. Task 2 Meaning of business risk: Business risk is associated with the uncertainty of a companys future cash flows, which are affected by the operations of the company and the environment in which it operates. It is the variation in cash flow from one period to another that causes greater uncertainty and leads to the need for greater compensation for investors. For example, companies that have a long history of stable cash flow require less compensation for business risk than companies whose cash flows vary from one quarter to the next, such as technology companies (Fabozzi, et.al, 2007). Components of business risks: Operational risks: The risk of loss resulting from insufficient internal processes, people and systems, or from external events which includes legal risk. In other words, the risk of loss resulting from failure to comply with laws as well as prudent ethical standards and contractual obligations which includes the exposure to litigation from all aspects of an Institutions activities. The definition does not focus strategic or reputational risks. In other words, operational risks are concerned to enhance operational risk assessment efforts by encouraging the industry to develop methodologies and collect data related to managing operational risk. Strategic and reputational risk is not included in this definition for the purpose of a minimum regulatory operational risk capital charge which focuses on the causes of operational risk and the Committee believes that this is appropriate for both risk management and, ultimately, measurement (Fabozzi, et.al, 200). Compliance Risks: Compliance risk can be defined as the current and potential risk to earnings or money arising from violations of, or non-conformance with, laws, rules, approved practices, internal policies, and methods, or moral standards which arises in situations where the laws or rules prevailing certain bank products or activities of the Banks clients may be unclear or unverified. This risk exposes the institution to fines, civil money punishments, payment of damages, and the voiding of contracts (Fabozzi, et.al, 200). Liquidity risks: Liquidity risk can be explained as the current and approaching risk to earnings or capital arising from a banks incapability to meet its obligations when they come due without incurring unacceptable losses. Liquidity risk includes the inability to manage unplanned decreases or changes in funding sources. Liquidity risk also arises from the failure to recognize or address changes in market conditions that affect the ability to liquidate assets quickly and with minimal loss in value (Neu, and Malz, 2007). Meaning of risk management: The true connotation of managing the risks is combined with the activities of human wherein the identification of the risk, risk evaluation, adapting techniques to manage it and lessening of risks by using managerial strategies is done. The various ways in creating risk management includes moving the possible risk to other group, preventing the risk from happening, lessening the risks negative effects and recognizing all the consequences that a specific risk might bring (Blokdijk, 2007) Corporate governance According to Cadbury Report, Corporate governance is the system by which companies are directed and controlled where the role of the shareholders is to appoint the directors and the external auditors, and to satisfy themselves that an appropriate governance structure is in place where directors are responsible for setting the companys strategic aims, providing the leadership to put these into effect, supervising the management of the business and reporting to shareholders on their stewardship. Corporate governance involves a set of relationships between a companys management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. (Gupta, 2005) Cadbury code: The Cadbury Report, formally entitled The Report of the Committee on the Financial Aspects of Corporate Governance was published in December 1992, following the recommendations of the Cadbury Committee. The establishment of the Committee in May 1991 by the Financial Reporting Council, the London Stock Exchange, and the accountancy profession arose in response to the occurrence of financial scandals in the 1980s involving UK listed Companies, which had led to a fall in investor confidence in the quality of companys financial reporting (Cadbury, 1992). Fraud Risk Assessment To be protective of itself and its stakeholders efficiently and effectively from fraud, an organization should recognize fraud risk and the specific risks that directly or indirectly relate to the organization. A structured fraud risk assessment, tailored to the organizations size, complexity, industry, and goals, should be performed and updated periodically. The assessment may be integrated with an overall organizational risk assessment or performed as a stand-alone exercise, but should, at a minimum, include risk identification, risk likelihood and significance assessment, and risk response (ww.acfe.com/documents/managing-business-risk). Managing the risk of fraud, the risk based approach: A risk-based approach enables organisations to target their resources, both for improving controls and for pro-active detection, at problem areas. Developments in corporate governance, including the requirement for statements on internal control, create the atmosphere in which fraud can be considered as a set of risks to be managed alongside other business risks. Managing the risk of fraud should be embedded in the entirety of an organisations risk, control and governance procedures. In wider sense, assessing and managing the risk of fraud involves assessing the organisations overall exposure to fraud, recognising the areas most vulnerable to the risk of fraud, assigning ownership, calculating the scale of fraud risk, responding to the risk of fraud; and determining the success of the fraud-risk strategy (ww.acfe.com/documents/managing-business-risk). Assessing the Organisations Overall Vulnerability to Fraud: Vulnerability to fraud can be assessed at different levels in an organization where a quick assessment of the overall level of risk an organisation is exposed to is often a good starting point and may highlight particular vulnerabilities where some action needs to be taken immediately rather than wait for the results of a more in-depth risk assessment to be completed. A fraud risk assessment should additionally be carried out during the development of any new policies, activities or operations to ascertain whether any new risks arise that need to be managed. The risk assessment should also be reviewed and re-assessed whenever a change in policy occurs or when changes are made to the way in which a policy is to be implemented (ww.acfe.com/documents/managing-business-risk). Fraud risk identification may include gathering external information from regulatory bodies, industry sources, key guidance setting groups), and professional organizations, the American Institute of Certified Public Accountants (AICPA), the Association of Certified Fraud Examiners (ACFE), the Canadian Institute of Chartered Accountants (CICA), The CICA Alliance for Excellence in Investigative and Forensic Accounting. Internal sources for identifying fraud risks should include interviews and brainstorming with personnel representing a broad spectrum of activities within the organization, review of whistleblower complaints, and analytical procedures. A proper and working fraud risk identification process includes an calculation of the incentives, pressures, and chances to commit fraud. Employee incentive programs and the metrics on which they are based can provide a map to where fraud is most likely to occur. Fraud risk assessment should consider the potential override of controls by m anagement as well as areas where controls are weak or there is a lack of segregation of duties (Vallabhaneni, 2008). The speed, functionality, and accessibility that created the enormous benefits of the information age have also increased an organizations exposure to fraud. Therefore, any fraud risk assessment should consider access and override of system controls as well as internal and external threats to data integrity, system security, and theft of financial and sensitive business information (Costa Lewis, 2004). Assessing the likelihood and significance of each potential fraud risk is a subjective process that should consider not only monetary significance, but also significance to an organizations financial reporting, operations, and reputation, as well as legal and regulatory compliance requirements. An initial assessment of fraud risk should consider the inherent risk8 of a particular fraud in the absence of any known controls that may address the risk. Risk assessment The control environment Control activities Information and communication Monitoring (Costa Lewis, 2004). THE COSO MODEL: In the United States many firms have adopted the internal control concepts existing in the report of the Committee of Sponsoring Organizations of the Tread way Commission (COSO). Published in 1992, the COSO report describes internal control as: A process, affected by an entitys board of directors, management and other personnel, designed to provide reasonable assurance regarding the achievement of objectives in the following categories: effectiveness and efficiency of operations, reliability of financial reporting, and Compliance with applicable laws and regulations. COSO describes internal control as consisting of five essential components. These components, which are subdivided into seventeen factors, include: The control environment Risk assessment Control activities Information and communication Monitoring (Vallabhaneni, 2008). Duties and responsibilities of auditor In most countries the auditor has a statutory duty to make a report to the entitys members on the truth and fairness of the entitys annual accounts. As we have seen in the foregoing section, this report must state the auditors opinion on whether the statements have been prepared in accordance with the relevant legislation and whether they give a true and fair view of the profit or loss for the year and state of affairs at the year end. The duty to report on the truth and fairness of the financial statements is the primary duty associated with the external audit. The auditor has a duty to form an opinion on certain other matters and to report any reservations. The auditor must consider whether: 1. The entity has kept proper accounting records; 2. The entitys balance sheet and income statement agree with the underlying accounting records; 3. All the information and explanations that the auditor considers necessary for the purposes of the audit have been obtained and whether adequate returns for their audit have been received from branches not visited during the audit; 4. The entity has complied with the relevant legislations requirements in respect of the necessary disclosures. If the entity has not made all the disclosures required the audit report should, if possible, contain a statement of the required particulars (Vallabhaneni, 2008). Relationship between internal and external audit The coordination of internal audit activity with external audit activity is very important from both points of view: from external audits point of view is important because, in this way, external auditors have the possibility to raise the efficiency of financial statements audit; the relevancy from internal audits point of view is assured by the fact that this coordination assures for the internal audit a plus of essential information in the assessment of risks control The role of internal auditing is determined by management, and its objectives differ from those of the external auditor who is appointed to report independently on the financial statements. The internal audit functions objectives vary according to managements requirements. The external auditors primary concern is whether the financial statements are free of material misstatements; the external auditor should obtain a sufficient understanding of internal audit activities to identify and assess the risks of material misstatement of the financial statements and to design and perform further audit procedures. The external auditor should perform an assessment of the internal audit function, when internal auditing is relevant to the external auditors risk assessments. Liaison with internal auditing is more effective when meetings are held at appropriate intervals during the period. The external auditor would need to be advised of and have access to relevant internal auditing reports and be kept informed of any significant matter that comes to the internal auditors attention which may affect the work of the external auditor. Similarly, the external auditor would ordinarily inform the internal auditor of any significant matters which may affect internal auditing (Diamond, 2002). Appropriate audit tests Meaning of audit test: An audit test is a procedure performed by either an external or internal auditor in order to assess the accuracy of various financial statement assertions. The two common categorizations of audit tests are substantive tests and tests of internal controls. Both types of tests are used in external and internal audits in order to reach established audit objectives, as can be outlined in audit checklists or determined based on the results of audit questionnaires. Audit tests typically are performed on a sample basis over an existing group of similar transactions. Sampling approaches can either be statistical or non-statistical, with the ultimate goal being to obtain the most representative sample of the population before testing begins (Diamond, 2002). Types of audit tests It is essential for internal auditors to understand how this method works, as well as its purpose. Also, given the variety of testing methods that may be used during the audit process, it helps to distinguish sampling from other types of examination. Identifying the qualities that distinguish sampling as a distinctive form of testing will provide good understandings for beginning auditors to know why it is used under certain circumstances and determine when to employ this process. During an operational audit, an internal auditor might use observation as an aid in evaluating a units procedures (Diamond, 2002). Simple Random Sampling: In auditing, this technique practices sampling without replacement; that is, once an item has been selected for testing it is not included in population and is not subject to re-selection. An auditor can implement simple random sampling in one of two ways: computer programs or random number tables (Beasley, et.al, 2005). Systematic (Interval) Sampling: This method describes the choice of sample items in such a way that there is an unchanging interval between each sample item. In this method, every Nth item is selected with a random start (Beasley, et.al, 2005). Stratified (Cluster) Sampling: This method describes the selection of sample items by breaking the population down into stratas, or groups. Each stratum is then treated separately. For this strategy to be effective, distribution within clusters should be greater than distribution among clusters. An example of cluster sampling is the inclusion in the sample of all payments or cash disbursements for a particular month. If blocks of homogeneous samples are selected, the sample will be subjective (Beasley, et.al, 2005). Audit tests Process mapping analysis: Develop process maps of the supplier delivery and accounts payable/ approval processes and analyse these maps to identify potential for suppliers to refuse to deliver supply Survey techniques: Perform a supplier satisfaction survey to identify details, magnitude and external perspective of supplier concerns over the accounts payable process. Analytical review: Perform benchmarking analytical tests to compare key process operating statistics with industry best practices and compare specific processes with best practice procedure. Inquiry through facilitated groups: Conduct a focus group involving several major suppliers, key members of the accounts payable process and major departments required to authorize invoices (Beasley, et.al, 2005). Difference between management and auditors responsibilities: In considerable certainty, managements responsibility is to create internal control. Internal control includes the whole system of controls and procedures, both monetary and operational, which are established to lessen risks and their impact, safeguard assets, and ensure efficiency and to inspire devotion to College policies and directives where, it is Internal Audits role to carry out an independent evaluation of the efficiency of these controls. Audit is not part of line management where internal audit does not grow and install procedures, make records or involve in any activity which could compromise its independence (Wilkinson, et. al, 2008). Audit planning: Initial audit planning takes place before the thorough audit work begins, and in planning for a specific audit assignment an auditor must take on a plan with regard to the timing, nature and degree of the audit work to be carried out. The aims of the plan are to ensure proper attention is dedicated to the different areas of the audit and potential problems are identified. On the other hand, audit plan have to be observed as a organized plan of action plotting out the audit processes to be carried out with the aim of reporting on whether a stated set of accounts show a factual and fair-minded view. However, the fact that the audit assignment is the commercial motion of the audit firm should be recognised, and if the costs of carrying out the planned procedures are likely to exceed the client entities budgeted fee then this unevenness should be informed at the planning stage by discussing with the management of the entity (Gupta, 2009). Scope of audit planning: It is importance to keep in mind the formal scope of audit work when considering audits role in risk management. Based on the results of the risk assessment, the internal audit activity should evaluate the adequacy and effectiveness of controls encompassing the organizations governance, operations, and information systems which should include reliability and integrity of financial and operational information. Effectiveness and efficiency of operation, Safeguarding of assets, compliance with laws, regulations, and contracts are the scope of audit planning (Spencer Pickett, 2006). Audit testing: Direct tests of account balances and transactions are designed by determining the most efficient manner to substantiate the assertions embodied in the account or transactions. There are many alternatives open to the auditor in planning audit tests. The following are the types of audit tests. Tests of effectiveness: It is essential to determine whether the controls are effective over cash disbursements. Utilize the information performing an integrated audit of controls and account balances. Dual-Purpose Tests of Controls and Account Balances: It is useful to determine whether the controls are effective to help plan the nature, timing, and extent of other audit tests, and test the accuracy of recording the related transactions. Substantive Analytical Tests: It is essential to determine whether account relationships meet expectations, including the possibility that some of the receivables are not collectible. Direct Tests of Account Balances: It is essential to test the existence and dollar accuracy of account balances as stated at historical cost. Direct Tests of Transactions: It is essential to test the existence of sales transactions (Gramling, et.al, 2009, Auditing: A business risk, Cengage Learning Publishing (Gupta, 2009). Evidences that auditors collect from audit files and working papers: There are 7 broad categories of evidence from which the auditor can choose which are physical examination, confirmations, documentation, analytical evidence, written representations, mathematical evidence, oral evidence, and electronic evidence(Online resource: accessed at 20th May 2010, www.issai.org/media). Audit files and testing papers: Working papers provide evidence that an effective, efficient, and economic audit has been carried out. They should therefore be prepared with care and skill. Importance of working papers: Working papers are important because they are necessary for audit quality control purposes provide assurance that the work delegated by the audit partner has been properly completed provide evidence that an effective audit has been carried out increase the economy, efficiency, and effectiveness of the audit contain sufficiently detailed and up-to-date facts which justify the reasonableness of the auditors conclusions retain a record of matters of continuing significance to future audits(Online resource, accessed at 18th May 2010: www.accaglobal.com/pubs/students). Meaning of Statutory Audit Statutory Audit is a checking of accounts required by law where a municipality may be required by its own law to have an annual audit of financial records or a company which is governed by any Law, the Law may require the audit to be conducted and the manner in which audit should be conducted and to whom the report of auditors should be presented (Stittle, 2003) Statutory Audit Report Statutory Auditors Report is prepared in accordance with Article L(225-235) of the French Commercial Code, on the report prepared by the Chairman of the Supervisory Board of Peugeot S.A., on the Internal Control procedures relating to the preparation and processing of financial and accounting information(Stittle , 2003). Purpose of statutory Audit Report The purpose of Statutory Audit Report is to present the fair presentation and the consistency with the financial statements of the information given in the Management Report of the Board of Directors, and in the documents addressed to the shareholders with respect to the financial position and the financial statements; the fair presentation of the information provided in the Management Report of the Board of Directors in respect of remuneration and benefits granted to certain company officers and any other commitments made in their favour in connection with, or subsequent to, their appointment, termination or change in function(Stittle , 2003). Contents of Audit Report The subjects of audit report are title, addressee, opening or Introductory Paragraph, Scope Paragraph, opinion paragraph, signature, place of signature, and date of report. Auditors view of a financial statement, given without any reservations, such view basically states that the auditor feels the company followed all accounting rules properly and that the financial reports are an accurate demonstration of the companys financial condition opposite of qualified opinion(Stittle, 2003). Statutory audit report: The Audit Commissions auditors issue two types of statutory reports: reports in the public interest (RIPIs) issued under Section 8 of the Audit Commission Act 1998 immediate referrals to the Secretary of State issued under Section 19 of the Audit Commission Act 1998 Reports in the public interest Where matters are serious and an auditor decides a matter should be brought to the attention of the public he does this by issuing a report under S8 of the Audit Commission Act 1998 This report is issued to the health body concerned and copied to the Secretary of State. It is for the health body concerned to make this public and to respond to the report and for the NHS Executive to ensure they do so( Sangster, and Wood, 2008) Qualified and unqualified report: An unqualified report is a report from an independent auditor who has examined the accounting records and found no irregularities which has the following demerits a) Lack of consistent application of generally accepted accounting principles b) Substantial doubt about going concern c) Auditor agrees with a departure from promulgated accounting principles d) Emphasis of a matter e) Reports involving other auditors A Qualified Opinion report is supplied when the auditor met one of two types of situations which do not comply with normally accepted accounting principles, however the rest of the monetary statements are properly presented. This type of judgement is very alike to an unqualified or clean opinion, but the report states that the monetary statements are clearly presented with a certain exception which is otherwise misstated. The two types of situations which would cause an auditor to issue this opinion over the unqualified opinion are: Single deviation from GAAP this type of qualification occurs when one or more areas of the financial statements do not conform to GAAP, but do not affect the rest of the financial statements from being fairly presented when taken as a whole. (Accounting Standards Board, 1988)

Analysing Homelessness along with its causes and effects

Analysing Homelessness along with its causes and effects Though the economy has been getting better slowly but surely, one issue has been apparent throughout the past years and remains to get much attention due to the need of its solution. The homeless population within the United States has been steadily rising since the late 1970 s when the housing and social service cuts increased and the economy went on a downward spiral. All types of people have been impacted by many types of factors that led them to their homeless position. The U.S. federal government defines homeless individuals as: those who lack a fixed, regular, and adequate nighttime residence; have a primary nighttime residence that is: [either] a supervised publicly or privately operated shelter designed to provide temporary living accommodations (including welfare hotels, congregate shelters, and transitional housing for the mentally ill); an institution that provides a temporary residence for individuals intended to be institutionalizes; or a public or private place not desi gned for, or ordinarily used as a regular sleeping accommodation for human beings, (Swick, 2004). Though the number of homeless people in America still climbs, child homelessness seems to be the most prevalent among the rapidly growing group. Policies have been constructed and enacted, their effectiveness is not yet apparent. Many organizations have ideas for solving the problem, but are faced with road blocks due to the long-term process of enacting possible solutions. In a vicious cycle, once one becomes homeless, he or she is likely to remain that way for a long period of time. Some public policies work with the homeless, while others make it harder to get out of the cycle. Within the U.S. the main cause of homelessness is the lack of affordable housing. Besides that, other factors include mental illnesses, substance abuse, and low-paying jobs. Some minor causes include prisoner release, unemployment, domestic violence, and poverty. Family units are the largest and fastest growing segment of the homeless population. Though homelessness is impossible to measure to complete accuracy due to the lack of communication between all homeless and the surveyors along with the problem of finding the homeless, the estimates still prove to be rather shocking. According to a 2008 U.S. Department of Housing and Urban Development report an estimated 671,888 people experienced homelessness in one night in January 2007, (PBS, 2009). Within New York City by itself, officials reported that 6,252 families are lodging nightly in city shelters (NYPIRG). The website also reports that nearly 1 in 5 children within the U.S. live in poverty, therefore the U.S. child poverty rate is much higher than that of most other industrialized nations. In its 1998 survey of 30 cities, the U.S. Conference of Mayors found that the homeless population was 49% African-American, 32% Caucasian, 12% Hispanic, 4% Native American, and 3% Asian, (NYPIRG). This means that homelessness affects people of all sorts, without regard to race or other factors. Mental illness is a huge factor in the homeless community. Approximately 20-25% of homeless, single adults suffers from some form of a severe mental illness, specifically one that is persistent. According to the Federal Task Force on Homelessness and Severe Mental Illness, only 5-7% of homeless persons with mental illness require institutionalization; most can live in the community with appropriate supportive housing options, (NYPIRG). This is a rather hypocritical comment mainly due to the fact that the reason those people are on the street is because of their illness, if they don t receive the help they need, they will remain homeless. There are those communities who chose to take care of the problem rather than watch it get worse. Washington County in Portland, Oregon had a huge population growth within the past 20 years. Some of these people though, were traveling homeless people. What used to be limited to a few homeless individuals known to local residents on a first-name basis , and who were taken care of for the most part by the faith-based community and law enforcement, now became a population of more than 1,200 homeless adults, (Spanbock, 2008). No services were offered to these homeless people, so the community felt that something had to be done. Almost half of the countys homeless adults suffered from mental health challenges, so in 2004 a program was established for single homeless adults with severe and persistent mental illnesses. Luke-Dorf, Inc. thought of the idea due to their experience with adult mental healthcare. Though it took time, the Garret Lee Smith Safe Haven was opened in December of 2006. It went on to serve 10 formerly homeless people at their own level of need. As the success of the facility became more visible, a new center was opened within a year that now serves 25 formerly homeless people. As a result of this, they have seen many improvements and accomplishments: the newly renovated homes that house the facilities improve the l ook of the town, the facility gets a few homeless people off the streets, and a creation of new social service employment opportunities (Spanbock, 2008). This county is proof that not all solutions to homelessness have to come from public policy, but can stem from small groups wanting to make a big difference. Apart from the mentally ill, children are another large group within the homeless population. It is estimated that as many as one in 50 U.S. children (1.5 million) are homeless or precariously housed in temporary quarters such as motels and shelters, (Cohen, 2009). In a report about child homelessness specifically, Cohen shows that the ten cities most affected by child homelessness are Nevada, North Mexico, Texas, Arkansas, Louisiana, Mississippi, Kentucky, Georgia, Florida, and North Carolina. The National Center on Family Homelessness recently launched the Campaign to End Child Homelessness which proposes initiatives that would help children get into more stable situations and in the end brighten their outlook on life in the future. Some believe that its up to the U.S. government to end child homelessness by imposing policies that can be enacted at all levels of the government. It is possible to end child homelessness [in the United States] within a decade, (Cohen, 2009) which wou ld mean that if all the right programs and policies were implemented, the trend of growing child homelessness could be reversed even in this recession. Some of the more prevalent recommendations at the federal level include creating new low-income housing units, providing more housing vouchers, temporarily increasing food stamp benefits, raising of the minimum wage, and making it easier for homeless children to attend public schools. An issue that seems to be easily looked over is the idea that if a family is homeless, it makes it hard for the parents to find child care so that they may work. There is an extremely small number of child care facilities that would provide childcare to parents that dont have a fixed income. Yet without the childcare, most of those parents arent able to go to work to actually have that fixed income. As of right now, only Massachusetts gives priority to children who are homeless when distributing [child care] vouchers, (Cohen, 2009). If more states did t hings that way, the homeless population would decline in a major way. Once one is homeless, its hard for them to become financially stable again. This rings true to homeless children and young adults as well. According to the social adaptation hypothesis, the longer young people are homeless the more they adapt to homelessness as a way of life, (Johnson Chamberlain, 2008). This is why it is critical to get these children and young adults off the streets as soon as possible in order to lessen the final impact of homelessness. According to their survey of 1,677 individuals who became homeless before they turned 18, Johnson and Chamberlain (2008) found that 75% progressed to adult homelessness. It is estimated that between 1.5 and 2 million youth under age 18 are homeless and unaccompanied by a parent or guardian for at least one night, (Dworsky, 2010). The difference between the youth and adult homeless population is that a majority of homeless youth chose to leave their home. Apart from that most are homeless because they are abandoned by their parents or are forced to leave their home. Others grow out of the foster care system or are released from the juvenile justice system. The experiences they have are also different from other homeless elders, depending on whether they are living on the streets, squatting in abandoned buildings, staying in shelters, or couch surfing among family members, friends, and even strangers, (Dworsky, 2010). Though some progress has been made to get the homeless youth off the streets, the major benefactors have been housing-based independent living programs that give the youth a place to stay as well as teach them things necessary to get out of the system. Just like any other young adult, the homeless need specific things in order to transition to their adulthood properly. A safe and stable living environment is a primary need of the homeless youth, when someone is on their own, they dont have the ability to learn things necessary for living successfully. Budgeting, meal preparation, hygiene, conflict resolution, and time management are just some life lessons that the homeless youth does not necessarily receive. An education is just as important as the previous points, if one does not get a degree, he or she is most likely to remain in the homeless system with low chances of getting well paying jobs. The Lighthouse Youth Services in Cincinnati, Ohio, is one of few organizations that helps prevent homelessness among specifically foster youth and juvenile offenders. With its Independent Living Program, The Lighthouse Youth Services has made a huge impact on the youth that has entered it. Of the 455 youth who entered durin g the six-year period between 2001 and 2006, 60% had completed high school or obtained a GED, 31% were employed or had completed a vocational training program, and one-half were living independently at the time they were discharged from the program, (Dworsky, 2010). It s apparent that if the effort is made, and the help is offered, the homeless youth will not have as negative results as expected. Though much of the homeless youth chose to leave, it s doubtful they chose to give up the rest of their lives. Given the chance, they d surely pick their life back up and better their living habits and opportunities. Though the demographic may be smaller, the same issues face the homeless of Springfield, MO as do the rest of the nation. According to Randy McCoy (2010), families are the fastest growing of the homeless population in Springfield. Over three hundred go unsheltered every day. In the winter of 2009, 457 individuals were homeless of which 301 were family units. In a 2006 documentary about the homeless community in Springfield, its estimated that there are 600 homeless individuals in Springfield on any given night. Of those, 250 don t have a place to stay each night. Beverly Tadeja, the director of social services at the Missouri Hotel notes the following: [You can] see people in the dumpsters, that s a perfect example. They stay in there (women especially) in their mental state, they want to be protected. Well, they turn around and go into the dumpster for protection, so they don t get beat up or raped, or whatever. Whatever the situation is. So they find that a security because it s li ke a shelter to them, (2006). Out of the 250 people that don t have a place to stay at night, many have to make decisions like the above mentioned on a daily basis. They have no protection from the outside world and choose to protect themselves in the way they find most suitable under their conditions. In 2008, a survey was drafted about 148 people living in Springfield who were homeless during any period of their life. The report was finished, but lacked feedback from the agency giving helpful information in order to fully complete it. The sample was selected by asking homeless individuals if they had spent the previous night in a place meant for human habitation [and] whether they had been without shelter for at least one year in their lives or four times in a three-year period, (unidentified author, 2008). Interviews of the 148 individuals were conducted by volunteers at The Missouri Hotel. Results that were found were rather unexpected and quite shocking. The mean age of participants was 38.67 years, which is comparable to the mean age of 41.32 of summer 2007 participants, (unidentified author, 2008). With the youngest interviewee at 17 years of age and the oldest at 56, the variety of the surveyed was quite broad. Sixty-five percent of the interviewed were male, which may seem large, but the number of females represented was larger in 2008 than in the interviews conducted the previous year. One of the conclusions of this survey that correlated with the rest of the U.S. population was the fact that the homeless individual had a small education level. On average, the time the homeless person received education was 11.16 years. Thirty-seven percent of participants reported having 12 years of education, (unidentified author, 2008). In comparison to the national number of homeless youth, almost 20% of the interviewees in this survey experienced foster care as children. Forty-eight percent reported having a family that supported them, in contradiction to the national standard of children being completely on their own. Though no children were specifically interviewed, 23% of the actual participants spoke of knowing homeless children and families in the area. For Springfield not being a major city in Missouri, its homeless rate is definitely high.

Polar Bears :: essays research papers

Polar Bears Life Span It is believed that polar bears live an average of 15 to 18 years, though some bears have tagged in their early 30s. In some zoo’s bears have been known to live up to the mid 30s. There is only one individual bear that has been known to have lived up to the age of 40. Biologists believe that starvation is the leading cause of death for sub adult bears, which is probably the reason that when bears are in captivity (a zoo) they live longer. Population Polar bears live in Russia, Alaska, and Canada to Greenland. There is no exact number of a population estimate, but biologists believe there is an estimated figure of 22,000 to 25,000 bears, of which 60% of bears are living in Canada. Habitat It all begins in late autumn. The short summer is over, and it gets colder every day as the sun slowly disappears a pregnant polar bears starts looking for place to give birth to its cubs. She walks around until she finds a deep snowdrift. There she starts digging her winter den. The female polar bear uses her claws as shovels to move away the snow this can take a few hours and even up to a couple of days. These dens are thirty to fifty feet long. At the bottom of the tunnel, she makes a small cave. When she is finished digging, she lies down to rest. The drifting snow will close the entrance of the cave and the thick snow will protect her the harsh Artic nights. Then around Christmas or New Year’s she will give birth to her cubs. These bears remain in their habitat for about 6 months, by then the cubs are ready to slowly come to play. The mother will soon start looking for food and will rove the area as the new bears follow. Range A polar bear’s home range can be enormous, much bigger than any other species of bears. It is believed that a single polar bear can rove across an area as twice as big as the country of Iceland. An Alaskan polar bear was found a home range 45 times the size of Tennessee. Food The diet of polar bears is: walruses, seal, and whale carcasses. Ringed seal is their main food. Polar bears are true carnivores, which mean that they feed mainly of meat. Sometimes these bears walk around for days and weeks without finding any food.

Prejudice :: essays research papers

Prejudice By Prejudice people have been around forever. Prejudice goes on everywhere including here at Box Elder Middle School. It is sad people can’t have mutual respect for each other even though we are all different in our own ways. Prejudice can be caused because of various reasons. Religion, ethnic race and social status are examples of causes of prejudice. Sometimes prejudice is caused by how we are raised. Many times parents pass on prejudice beliefs to their children. A lot people raised in the southern part of the country are prejudice against blacks. In the early to mid 1960’s, prejudice was alive and well in the south. Blacks had their own bathrooms and were forced to ride in the back of city busses. It’s hard to believe that was doing on only 40 years ago. A lot of Middle Eastern countries are very prejudice against women. The Civil War was based on prejudice beliefs. The North wanted to keep slavery and the South wanted to abolish slavery. Many blacks were beat, raped and killed just because of the color of their skin. Schools in the 1950’s were segregated. Some students were forced to ride buses for many miles to prevent whites and blacks from attending the same school. Finally segregation was introduced. It caused a lot of problems, including some riots but eventually people learned to live together and I believe it ended up being a good thing for people and out country. Slavery was stopped shortly after the Civil War but it did not stop people from being prejudice. The only way to stop prejudice is to teach all children from a young age to respect all people. Sometimes parents are not the right people to teach their children because they are already set in their ways and will never change. Some people are prejudice because they just don’t know how to act any different or maybe they have never been exposed to different cultures or beliefs. Some people just think they are better than somebody else for no reason at all. Our only chance for a successful society is to get rid of prejudices. This is much easier said than done. Some religious prejudices have been going on for thousands of years. I don’t know if there is any hope for these people. There are some simple things we can do as students and people. It is real simple.

Hum/130 Final

Buddhism HUM/130 January 13, 2013 Buddhism In this paper we will put to an end to the ongoing question if the Buddhists are bowing down to Idols or Gods and why they do what they do. This paper will go into detail about the temple that I went to and the different tours that I was able to go on and the interview I was able to hold. I will also go into great detail about what you experience during one of the services in the Main Shrine. The Hsi Lai Temple sits on 15 acres of land and has a floor area of 102,432 sq. ft. nd is located at 3456 Glenmark Drive, Hacienda Heights CA 91745. The architecture when you first drive up is mind blowing and beautiful. The architecture stays true to the traditional styles of buildings, gardens, and statuary of the ancient Chinese monasteries. They started the planning and building of the temple in 1978 and finished the building ten years later in 1988. Hsi Lai means â€Å"coming west† and signifies the dedication of the Fo Guang Shan Buddhist O rder to spreading the teachings of the Buddha. Fo Guang Shan is the largest monastery and covers over 370 acres.When you walk up the first set of steps you come to what they call the gate. On the top part of the sign it says Hsi Lai Temple which again means â€Å"coming west† and then on the four pillars it says the four universal vows, which are â€Å"to save all sentient beings, to eradicate all worries, to study the boundless Dharma, and to attain supreme Buddhahood. † After you walk up the steps from the lower parking lot where the gate is you walk up more steps to the upper parking lot and then from their you walk up more steps to what they call the Bodhisattva Hall.Bodhisattvas are enlightened beings that made a vow to selflessly serve others with loving-kindness and compassion and are committed to liberating all beings from suffering. It is said that each one of the bodhisattvas represents a virtuous quality essential to all Buddhists. When talking about the bod hisattvas they made a point to make sure that we understood that when we saw that people were bowing to them that they were not bowing to an idol, but rather a sign of showing respect and seeking their guidance to develop the virtuous qualities they represent. Bowing also shows our own humility and the curbing of our ego.There are five bodhisattvas are: Samantabhadra Bodhisattva which is symbolic of great practice, and helping us achieve more discipline in our daily life, Ksitigarbha Bodhisattva which was known for his great vow to help all beings in hell and would not stop till hell was emptied of all beings, Maitreya Bodhisattva is the future Buddha and is the symbol of great benevolence and is often referred to as Happy Buddah, Avalokitesvara Bodhisattva which symbolizes the perfection and loving-kindness, and Manjusri Bodhisattva which is known for great wisdom which empowers one to distinguish universal morality from wrongdoing.Underneath the five bodhisattva are engraved Chine se characters from the Diamond Sutra. Next to the Heart Sutra the Diamond Sutra is the most widely read of the Mahaprajnaparamita Sutra, and is highly valued among sects in Chan Buddhism.While I was at the His Lai Temple I found that they have an information where you can go on two different types of tours of their temple: the first being a self-guided audio tour where they give you a cd player and it gives you valuable information about the temple and all its rooms and buildings as well as the gardens and information on the statues that are found throughout the temple, The second type of tour they offer is with a docent who is more than willing to answer any questions that may come up during the tour, while they inform you about everything within the temple.The two gardens I was able to see within the temple was: the first being the Arhat Garden where the eighteen arhats are seated. The Arhats have realized the truth of no-self and that all is a composite of the five aggregates dep endant on other phenomena originally empty and subject to impermanence. It is said that the eighteen Arharts were able to overcome the difilements of greed, anger, and ignorance.The eighteen Arhats are: Cudapanthaka which is the door watching arhat, Jivaka which is the heart exposing arhat, Vajraputra which is the persuading arhat, Subinda which is the pagoda holding arhat, Panthaka which is the arhat with stretched arms, Kalika which is the dust cleaning arhat, Bhadra which is the arhat that crossed the river, Pindola which is the arhat with long eyebrows, Nakula which is the silently seated arhat, Ajita which is the arhat riding the deer, Maitreya which is the tiger taming arhat, Angaja which is the arhat with a sack, Vananasim which is the arhat under the banana tree, Rahula which is the arhat in deep conversation, Manakassapa which the dragon subduing arhat, Kanakabharadavaja which is the arhat holding the alms bowl, Nagasena which is the ear cleaning arhat, and Kanakavatsa whic h is the jolly arhat. The second garden is the Avalokitesvara Garden. Avalokitesvara Bodhisattva is seated on a giant rock with both her attendants, Shanci and Longnu who are standing beside her.Surrounding the pond are the four Deva Kings: Virudhaka of the Southern Kingdom which is holding the sword, Virupaksa of the Western Kingdom which is holding the dragon, Dhanada of the Northern Kingdom which is holding the umbrella, and the Dhrtarastra of the Eastern Kingdom which is holding a sitar. The four Deva Kings are revered as guardians who protect devout sentient beings from being harmed by unwholesome elements. Standing around the four Deva Kings are the four Dragon Kings of the Four Seas. The flowing water in the garden is symbolic of the Dharma water flowing everywhere to purify people’s minds. Although the Buddhist love informing people of their religion and teaching you about their beliefs. They are really not very forth coming when it comes to helping someone who is the re for a school assignment.I was asked by the individual to leave his name out and was further informed that they do not normally do this kind of interview. When asked about the holidays and traditions he said the most important holiday is Wesak Day which comes in May on the day of the full moon. As for traditions he said that it all depends on the form of Buddhism tradition that you followed. When asked how has his life has been shaped by the Buddhism religion he said that it has made him a more understanding person to what he called the true nature of life. When asked what the biggest challenge is to the Buddhist religion he said that with all beliefs the biggest challenge is changing you.He has been practicing Buddhism since he was born and was taught by monks and other teachers about the Buddhist religion. When asked if there were any dietary restrictions, he did not come out and say that you had to be vegan but stated that it was more wholesome to be vegan. During our interview I found that it was real simple to become a Buddhist and that all you really have to do is follow the teachings. After that question he seemed to be in a real hurry to end the interview but I thanked him for his time and let him know that what I was able to get answered was very helpful. When it came to compairing this religion to another I chose Christianity, not because it was the easier to compare because I found them to have very obvious differences.In Christianity when you become a Christian you accept God into your heart as Lord and Savior and then are baptized as a symbol of the washing of your sins. When you become a Buddhist you just start following the teachings of the Buddha. The other difference that stood out to me was that Christians believe in a heaven and hell and Buddhist believe that hell is only in the mind. Christians believe that when you die you go to heaven to be with your Lord and Savior, Buddhist believe that when you are done with this life you are reincar nated in the next life. I found this religion to be incredibly interesting as well as beautiful. This religion is all about selflessness, which I found in this day and age to be comforting.In order to become a Buddhists you, you are told to give up all your worldly possessions. Today, everything is about worldly possessions from the cell phone that they have the designer clothes they own, to the car that they drive. When the subject of material possessions is brought up it starts making you think about what is really important in your life and how much thought you actually put into material possessions. I have found that people say that their family and friends are important, but if someone were to ask them to give up these possessions what do you think they would say? These people would tell you that you were out of your mind and then proceed to give you every excuse under the sun on why they could not do this.I believe that it takes an amazing person to be able to put someone else ’s life before their own and to truly be devoted unconditionally. As I watched the monks interact with people throughout the times I was there it seemed like they were truly at peace and seemed like they had it all figured out when it came to life. When I first started the assignment I thought that it was going to be stuffy and that I would have to deal with someone who did not want to truly be in the place of having to help someone with a school paper. I found that to be completely false and actually found that not only the monks were willing to answer questions, but all the staff members were happy to answer whatever questions that anybody came up with.At the end of this assignment I found that Buddhism not only left you with such a serine feeling not only while you were in the temple but when you left it made you feel like you could accomplish anything if you just believed. They believe that the only way to truly achieve happiness is by giving up yourself and start paying more attention to others. References: An Introduction to Buddhism. (2000). Retrieved from http://webspace. ship. edu/cgboer/buddhaintro. html Religious Tolerance. (2011). Retrieved from http://www. religioustolerance. org/buddhism. htm buddhanet. (2013). Retrieved from https://ecampus. phoenix. edu/secure/aapd/cwe/citation_generator/web_01_01. asp

Logistic: Inventory and Total Logistics Cost

Supply chain is a network of logistic systems. Logistics concerns one company's system. Supply chain includes different companies. E. G. Dell computer – the logistics is Just their company but the supply chain includes all the part suppliers. Their logistics system is a part of dells supply chain. It includes also the retailers and supplier. Other company's logistics included in Dell's supply chain. Logistics is an early version of the supply chain. Logistics originated in the US military. Flow of cargo (people, weapon in war is logistics. ) Organizing a course/seminar – logistics needed for success.Today all the successful companies find their competitiveness from logistics, not from the product itself. E. G. Walter (retailer, wholesaler, supermarket chain) – their competitive edge comes from logistics. They are not selling anything different from others. They have a superior logistics system. Logistics make them succeed. Dell also, service is good, price attrac tive – success comes from logistics. Another definition people define logistics differently but they mean the same thing. Slide Logistics/Concept 4 Instead of saying process, they say optimization, etc. Process of location.Says movement and storage of resources instead of saying goods/services and information. They call logistic activities economic activities. Transport is one of then, port services, production, storage, distribution, etc. – take place bet. The point of origin and point of destination and consumption. Logistics is about the 5 RSI. What are the 5 RSI? Logistics is about getting right goods at right place at right time in right form at right price. Military is really about this. In commercial entities we emphasize on the price a lot. This is also the definition of logistics.Right goods, right in quality in correct quantity. Different level of logistics. In-bound, out-bound logistics. Logistics of production (table, book, car, etc. ), there are two levels of logistics. Logistics within the production process – in the factory. How do you optimize the production within the factory? We call this operational logistics or workers together. How do you put temporary storage along the assembly line? All this is logistics. E. G. WHIM library – lack of space. How to maximize space? Library space layout. It's about logistics. Different factories have different layouts – this is logistics.We are interested in logistics before the production starts. The cargo coming into the factory and when the production is finished, the cargo moving out to the next step – all towards the final consumption. This is what we call in-bound and out-bound logistics. This is what we are interested in. Maritime transport takes part in inbound and out-bound logistics than for production logistics. We are interested in how to move material to production and from production to consumers. When we try to understand logistics, we look at some lo gistics questions for example a typical question is about where to find the raw material needed.Raw material may be in different places. Some places might have different quality and prices. The difference between that place and the production might be different and therefore remonstration time and cost might be different. Where to find energy supply? Labor supply? Should you move your factory offshore to benefit cheap labor? If you do that be careful that higher prices might have to be paid on other services for example transportation. Where to set up production bases? In shipping, where should the port be located? Where to build warehouse and distribution centre. E. . Toyota car has their distribution centre for the Nordic countries at the port of Mammal. Before that they had centre in all the countries. So many distribution centre, different logistics cost than if there is a concentration of activities. Where to have branch organizations? The answers consider a lot of activities i ncluding transportation. We are in maritime transport so we are affected by the customers decision. Other types of logistics questions for ex. How to transport from A to B and choice of transport mode – air sea, road. Egg. Oslo to Mammal – road, sea. Air, rail.Different modes of transport have different logistics implications. Ex field trips – logistics question, how to transport students – sea (too long), air, road, rail. How to transport container? Hub and spoke – benefit from economies of scale. More cargo handling costs. The best solution must be a logistics solution. Best way to transport cargo from A to B. Flow and storage from point of origin to destination to comply with customers' requirement. Moving from A to B different options – different solution. When should transport start – how long should it take. Route? Storage? How, when needed?Mat of cargo to be transported at one time? Economies of scale? Packing needed? Logistics is everywhere. Farmer from southern Sweden – buy fertilizer in Sweden, buy from Germany (expensive land transport), buy from US where its much cheaper, but he has to pay more transportation cost. Where to find the material? Emphasis is on maritime transport – movement of goods. Shipping co. Transport goods – need info to do so. Port and shipping concerned with flow and storage of goods. October 28, 2008 Session 2 Slide Logistics/Concept 9 There always has to be a logistics concept. And a logistics concept is what?It's about total cost concept. This is the most important concept. It looks easy but total cost concept is not always observed, so people make mistakes as a result. It is a customer service requirement. Logistics concept is also about outsourcing, integration, global about concept, it is also about processes. The processes we call drivers. It drives the logistics process. It can't all be about concept. It has to be something tangible. Logistics is abou t processes. We are doing these everyday, ex. Manufacturing and transportation, distribution, inventory control, procurement.These are all activities, but the difference between these and logistics are that we are doing these in an integrated manner under the concept of logistics. So we have the concept and the drivers. The difference between these activities and logistics, we are doing them under the total cost and the customer service concept, so this is relatively new. Third is IT. We call IT enablers – that enables us to do the processes under the concept of logistics. Sometimes we can't do the processes (drivers) without IT. Ex. Dell computers. They obtained their competitive edge from logistics.Logistics means to get a computer from the production to the customers without any retailers. No middlemen. Order online, design own computer. The aim of logistics is to minimize the total cost. Can only do this with IT tools. So the three components have to come together using t he IT tools. We need to understand the role of IT in the whole process. Ex. Just in Time system. This is Inventory control under the concept of egoistic using information technology. The 3 components have to work together. How do we take all these functions (MFC, transportation, distribution, warehousing, etc. In an integrated manner under the concept of logistics using IT tools. Ex. Individual delivery. Concept is to minimize total cost. Total cost is manufacturing, transport, didst. , etc. How do we minimize that? Use IT. Dell used IT to find out that their total cost will be minimized if they cut out the middle man. IT enables the cutting out of the middle man. Good online service. Shipping line is not making anything – it is a part of transport. Shipping companies as a company have logistics problems also. Shipping has a double role to play.Shipping is a part of the logistics chain of a customer, but at the same time they have their own logistics problem. Shipping's logis tics problems include arranging bunkers, choosing port of call, types of service to provide, empty container management, repositioning of containers, terminal logistics, fleet logistics, agency logistics, but shipping as a service provider is part of the logistics of customers. Ex. KEA – furniture maker – shipping important. Shipping has a double role to play. Ex. Wimp's logistics service. Logistics in third world countries is not good enough. Read World Bank Report.The three components of logistics are important. Dell manages their total cost through logistics, so does Wall-Mart. All the processes have to be IT enabled. Control-implementation-control. HP has a fixed model on the shelf. Dell, make your own – different customer service. One is enabled by IT. Logistics has 3 components – concept, process, IT. Slide logistics/Concept 10 Supply chain – different sources to choose from. Take one then the next step and the next. This is the flow of cargo from origin to destination – the flow of information from user to origin. Information flow and cargo flow go in opposite directions.Ex. Dell – the information goes from the customer to Dell and the cargo from Dell to the customer. How will the producer know what kind of products the consumer will need? The consumer will have to tell. Opposite directions. Dell transport one computer to each customer so the customer pays more for transportation, but other costs like the shops and overhead related costs do not exist. If we compare this cost with the cost is very important. Total cost concept can be better understood by looking at slide Logistics/Concept 1 1 . This is a Total cost in Logistics and Supply Chain System.Marketing and logistics are closely related. This picture is very true. What is marketing? It is about the 4 As – product, price, promotion, place. So in this marketing there is one component about place which is about logistics. In the logistics about the place and the customer service (where the customer wants the cargo to be) and there are other cost elements. Ex. Related to place, transport cost has to be incurred – also warehousing cost, flow and storage. Other costs like inventory costs will be incurred. What is the difference between inventory cost and warehousing cost – inventory cost for keeping goods in stock).Inventory cost is the value of the goods. Books for new WHIM students – cost of book (inventory) plus storage (warehousing). Processing and information cost – each time we order, we have to follow procedure, fill in forms, etc. Processing cost can be high. Egg. When we are transporting our boxes home, have to have bill of lading. This has a cost (processing and information cost). Lot quantity cost – economies of scale. Purchasing/transporting/buying a big amount and will benefit from economies of scale, this is called lot quantities. Put all these 5 elements together and this is total cost.The objective of logistics is not to optimize a cost element, it's not to minimize a cost element, but rather to optimize the total cost and minimize the total cost. Minimize the total cost – this is what logistics is all about. This is easier said than done. KIT, the idea is to reduce the inventory cost to zero if possible. At the same time warehousing cost is being reduced – this is a good system. What other cost will be affected – transport cost. All these cost elements are interrelated and interdependent. So interaction and interdependence are also important.Change of inventory will affect transport cost, lot quantity cost, etc. KIT system for example – daily consumption of rice. Let's say we eat egg of rice each time. Based on KIT, each time we need rice, we should buy only egg. Do we do this? No, then against KIT principle. We buy 200 kilos – 2 cost occur – inventory cost and the money spent on the rice cannot be used (capit al tied up – cash flow problem). If this money was put in the bank it would generate some interest. Where is the rice put? The place occupied by the rice can't be used for something else.In production if you buy too much to get economies of scale from purchasing, we'll incur a high inventory cost. If we are not buying kilos, we buy a quantity in between – say 2 kilo. Optimal total cost. If we buy egg each time inventory cost is zero – have to buy each time we need to cost. That is time and transport cost. Lot quantity cost will change as there is no savings to be got through economies of scale. And each time we buy there are other costs like information and processing (maybe not in the case of rice, but generally). Put all these costs together, and find a good place in between. We do this by Cost Trade-off.Cost Trade Off Slide Ex. Manufacturing activity involves making projectors in Mammal, Sweden and need to supply them to the rest of Europe. No distribution ce ntre, or warehouses, or depots, o because we cover the entire Europe, each time we have an order from someplace in Europe, we pack the projector and send it off. What do we save – inventory, we do not keep inventory. What do we have to spend more – transportation cost will be very expensive. We therefore have to find out if we have a warehouse somewhere in them from Mammal to the customer; we send it from that storage which is closer so we save transportation cost.How many such warehouses we need to cover Europe? It depends on the elements: transport, inventory, lot quantity, warehouse costs. In optimizing all these costs together is a logistics decision. Ex. In the case of the depots, we might have 8, 10, 12 to cover the entire Europe. What cost elements we have in the case of the distribution of projectors in Europe. First the systems cost, the processing and information cost. When there is a centre there needs to be a computer system, a financial system, etc. If the re is no centre, the system cost is very low.The more centre, the higher the system cost and this is a storage cost. If there is only one storage at the headquarters in Mammal, the cost would be relatively low. As the numbers of depots are being increased the storage cost will be very high. Inventory cost – more depots, more stock – higher inventory cost. Trucking cost – tree has trunk and branches. Trunk means main transportation, branches mean local delivery. Transport cargo from production to main distribution centre = trunk transport and then from distribution centre to each individual apartments = local delivery.Trucking cost – the more centre, the more trucking cost. If there are no depots, each time to ship from mammal to each individual location will be very high. The more depots, the less the local delivery cost will be. The total distribution cost is the addition of all cost, this is what we call total logistics cost. When we have the total logi stics cost curve it corresponds to the number 8 meaning there should be eight distribution centre. So this is the solution – 8 centre. As costs change, oil, etc, the optimal numbers of centre will change. Its not static, its dynamic (the Total Didst. Curve).Logistics – one has to plan, implement, control. If the individual costs are changed then total cost will be different – high/low. E. G. If the interest becomes low – inventory cost will be affected as the capital will become cheap. If oil cost increase, interest rate decrease – could end up with more centre which means saving more rainspout cost, esp.. Local delivery cost. Transport cost in total will be less. Inventory cost is dependent on interest rates. May have 9/10 depots. # of depots depend on cost elements. Cost trade off is important. With depots total cost is lower, so this will save cost.Having depot is a cost but the cost is lower than not to have them. E. G. KEA used to rent warehou ses, now they build – benefit of depreciation. Next Slide Logistics cost in the USA Logistics cost include transportation cost, inventory, warehousing, distributing, etc. How much logistics cost people pay as a percentage of a country GAP – 10% in the US. Inventory cost increase faster than the transportation cost bet. 1980 and 2005- why? Better inventory control, interest rate lower so inventory cost lower. Interest was low in the rest of the world until about 2005. Deflation = lower inventory cost.In other countries this percentage is much higher. China – 18% of GAP spent on logistics (used to be 20%). China is more representative of developing countries. So in developing countries logistics systems are not as efficient as those in industrialized countries. 9. 5% is similar in Europe and Japan (COED countries). In developing countries it's much higher. Includes all logistics cost element – transport, inventory, etc. – big room for improvement. Ne xt slide Customer service is another concept. Customer service is the output of logistic based, performance-based, philosophy based.Activity based e. G. After sales service, marketing, public relations. Performance based – what is the standard? Ex. Dell computer is performance based, delivered in 48 hours – performance-based customer service. Can be measured. Ex. , ports – waiting time for ships – rush. Philosophy based on what customers require is the customer service – according to customers taste – before, during, and after transaction. What is transaction? Buy goods, pay. Customer service can take place before this, during, after. Changes in CSS level affect total logistics cost. Next slide CSS High, Low.Cost Low/High – the higher the customer service level, the higher the cost. No ship should wait in port for more than 3 hours. This will cost a lot of money – will have to build more berths. Define customer service level. T ry to minimize total cost based on this pre-condition. Why CSS level increase and inventory level affected. The higher the CSS, the higher the inventory level. Goal: increased SSL, so high inventory level. It's a decision the company makes – customer service level is very important. (Refers to graph on the right) Try to find a way to push the line by introducing a better way of production e. . Using IT, new production method. Reduce cost but still satisfy goal – IT, use better system. Next slide: industry norm, etc. Customer's response to stock out. Is a risk being run of losing the customer? All different ways to define the customer service level. KIT System Developed by Toyota. Called the Kanata system. When a container of parts is chosen to be used from inbound stockinet in-out in-out This is the production. Eng the assembly line how do you get different stages to work together in harmony. The system has two cards. KIT works with 2 cards – the move cards and the production cards. Hen you see the move card, time to move the container or the other card, time to produce. Work centre 1 the card moves along the production line from one work centre to the next. Toyota manage to have minimum inventory along the assembly line. They have one container of part. Cards are turning around and the parts are being moved from one centre to another. For logistics a better understanding of Just in time is very important. 9 Cot 2008 There are two circulations of cards. How do the 2 circulations make the KIT system work? Why does it work? Key elements: to reduce inventory therefore reduces the capital tied up in inventory.Planning, staff commitment including suppliers, suppliers' ability to meet the demand. Some inventory is kept because there is a container. One piece at a time is being used from the container so the rest must be inventory. What is the average inventory? What is the customer requirement? It's the size of the container. The container is fu ll – how big is the container. How is the size of the container defined? The size of the container is planned based on production. Supply 20 units at the beginning and then it's consumed and a new container comes. The container is consumed during a cycle. The cycle is the time needed.The average inventory is a half of the container what ever the amount it contains. Typical KIT, there should be no inventory so why is inventory kept? When we need egg rice why don't we get exactly that? Other costs would increase too much. KIT – to keep as little inventory as possible. The size of the container depends on what? Transportation two don't match then the size of the container needs to be changed. If the transport sakes more time then increase the size of the container and vice versa. Transport time important. Volvo had KIT between Gent and Mammal. How much inventory should be in the Volvo factory in inventory?A lot. Why? Engine parts are made in Sweden to be used in Belgium. This transport takes one week by ship. As it takes one week, there should at least be spare parts for one week. Toyota has KIT. In the city of Toyota in Japan within 30 kilometers of the factory all Toyota parts are made there. This is the perfect KIT system. KIT emphasizes the reliability of the transport system. The two containers must have the same matching size. If parts can't be produced in time, the cart must be moved earlier. At the moment one container is taken to the in stock point, another container load of part should be produced.Suppose the production takes more time than when one cart comes back? Egg. If production takes 20 hours, parts can be made in 10 hrs. The time information is sent – information flow is the key. Plan to know how long production will take. In Japan, transport is guaranteed (Toyota). What is supplier commitment? Shortcomings of the KIT system? Now we assume we only need 20 parts in 10 hours, how about if the demand change and we need 30 parts in 10 hours. If the speed of production is variable the whole system is challenged. If the demand is certain/flexed then it can be planned – production rate and transportation.But what if production rate changes? This is a challenge for some of the production down the line that may need more time and material which might have to come from far. Not easy to adjust production. Shortcomings: Does only one supplier have to be used with KIT? No, Honda uses more than one supplier. In KIT, anything that goes wrong will collapse the entire system. In KIT the entire chain has to be KIT, it can't be at only one stage of the production. If not it forces other suppliers downs the line to keep inventory. KIT of big companies push inventory down the line if the don't plan effectively.Because smaller suppliers want to satisfy big companies, they are forced to keep inventory. KIT has to be along the entire supply chain. KIT may be only at the very large suppliers who push the inventory down the line to smaller suppliers. Toyota case: 1/52 weeks car production stopped because of a fire at one supplier – ripple effect. The decision of Toyota to do nothing was based on the total minimum cost of they did various studies. CCITT Case: The reliability of transportation and the uncertainty factors make logistics system key. The importance of information. Logistics concept drivers enablers, under total cost and customer level.KIT will never work without IT. Everything works together with IT supporting the processes under total cost and customer level. The process, concept or IT cannot work separately. Information is critical for success as well as the reliability of demand. Forecast and planning important to know when demand change. Transportation is also important for this system. If the transport distance is long, the container has to be big. The size of the container is influenced by time (transport). Transport is via sea – only use air in case of emergency. If transport takes a long time or is unreliable then more inventory needs to be kept.Gent is the biggest Volvo manufacturer. Terrines transport the parts from Sweden to Belgium. The shorter the interval of the shipping service, the lower the level of inventory required. This can make the transport expensive. So it's the total cost that is important that will Supply chain 2 definitions (see slide): it's a network, not port to port. In logistics there is no procurement. The 2 key words in logistics are flow and storage. Supply chain includes manufacture. Transformation = manufacturing. 1st law of dynamics – don't create anything, only change the form. Supply chain includes much more than logistics.Logistics narrowly defined. Supply chain is broader. Procurement also concerned with about origin of the goods. Optimization Integration Collaboration Synchronization Optimization – optimize one stage, the entire thing is not optimized so integration has to take place then consol idation then synchronization (concerted manner, happening in the same time). Relationship along supply chain. Start from optimization to synchronization. The idea of supply chain is relatively recent compared to logistics. 1960/ass people start to talk about total cost. E. G. In stage one warehousing and transport are separate functions.Management focus was operations performance. No integration. Logistics integrated both to see how they can be optimized. This is called total cost management. So the focus changed to optimizing total cost and customer service. Customer service put together with cost. Organization design is a centralized function. 80,s integrated logistics function. This moved today to supply chain MGM. Put logistics together to get supply chain. Supply chain broader than logistics. Stage 1 -separately treated, not optimized. Optimization done within the company. Optimize internal functions – transportation and inventory.Intra company and intra functional. This function is a logistics function. The logistics function today is moving still in the company but inter functional. Everything in the company put together – integration. Toyota inter company – higher level of integration. Toyota owns the supplier – easier to do KIT. Companies are integrated supply chain – Inter company and inter functional. Dell and their suppliers are integrated. Also Wall-Mart. The producers don't take orders from Wall-Mart – the ‘cards' in KIT comes from individual supermarkets. Producers can check storage level of Wall-Mart outlets.Everything is totally integrated. No personal intervention to place order etc. The system is integrated – good supply chain – inter company. Next Slide From fragmented logistics to integrated supply chain. In the fist stage do one function at a time – inventory or warehouse or transport. In the later stage, intra functional – the whole function optimized. From fragm ented logistics to integrated SCM. Suppliers, manufacturer, distributor, retailer, customer are all integrated with he other functions in the company and go to the next stage you integrate between the functions in the companies and between the companies.This is interception and will become in the true sense a supply chain. Supply chain broader today than the logistics. SC have to work with other companies. To satisfy your customers require more than one company: need supplier, manufacturer, distributor, and retailer. E. G. Markers – their system integrated with some of their key customers – key client management. Copra's definition of supply chain. Within an organization there is a supply chain. Egg. WHOM, teaching, supply services, library, canteen, etc. Al depots. Work together to satisfy customer. SC decisions – have to have supply chain design and strategy.Strategic level, medium term, short term – operational, daily and based on the company's competi tive strategy. Michael porter: define competitive strategy in terms of product differentiation or cost cutting leadership. How to achieve strategy: SC strategy. Balance bet. Efficiency and responsiveness. How to respond to demand? Efficiency includes cost-effectiveness, I. E. Cheap. Fast response – this is provided at a cost. Efficiency might compromise cost. Decision making is from lower level to higher. Many competitive strategies come from SC strategy. Wall-Mart is from logistics.Dell is from Supply chain Beer game: Once demand is variable SC difficult to maintain. KIT difficult to maintain. Long time to reach an equilibrium. In the end have to keep large inventory. Once demand is unstable KIT is not suitable. SC Design. Planning is important. SC design is about planning. When suppliers design their supply chain maritime and port services is a part of that. So mapping is important. Stockholders point is storage. Horizontal line represents move. When it stops – verti cal lines = storage or waiting. Egg. BBC container tracking. This is SC mapping.Horizontal line is lead-time (time from production centre 1 to production centre 2). Lead time depends on inventory to determine when order is to be placed. SC starts from the fiber and end with the clothes on the shelf. Through this we see pipeline length and volume. E. G, coca cola. Postponement of safety stock What is postponement? H and Ezra – they use postponement principle. Clothes must be in fashion. Don't know faction of 09. Try to postpone as much as possible the manufacturing time. Forecast, ii, postpone. Dell also uses this strategy. Don't develop their machines until last moment.Can use the latest technology and the price gets cheaper. Anticipate time needed and kind of product needed. Decision is postponed to the last moment. Postponement principle can reduce stock. Has bearing on transport too. Better information flow will impact SC. Next slide Sometimes for material flow speed might not be appreciated. Transport is used as storage to adjust transport time to match with performance. Sometimes it's because of the price. E. G. Iron ore in China, there is too much now. Information speed is always good but for material sometimes it needs to be fast and other times not so fast.Compression of lead-time in manufacturing activity. Supply chain map – length (vertical) volume (horizontal) – try to compress it to see possibilities to reduce some of the variable. Ocean transport can't be adjusted as speed can't be reduced. SC design. Lead-time is transport. Port of Amsterdam case study summary Market research – likelihood to attract new carriers / guarantee – balance and supply (elasticity). When port built no congestion in Europe – more port than ships. Impossible to get firm commitment – plenty choices. More supply than demand. Demand price inelastic. Shipping companies never give guarantees.Optimization, integration, collaborati on, synchronization. Have to synchronize. Increase speed of one operations but the speed of other things remained unchanged. No synchronization. If the discharged boxes cannot be moved this is a logistics problem. The concept of logistics: most important – total cost. Port of Amsterdam forgot total cost. Typical failure case that should never have been done. Restricted berths – bigger ships cannot fit in today – size is restrictive. How wide and long should ship be. (Panama Canal has size restriction and is thus a constraint – ships in the Asian Logistic: Inventory and Total Logistics Cost Supply chain is a network of logistic systems. Logistics concerns one company's system. Supply chain includes different companies. E. G. Dell computer – the logistics is Just their company but the supply chain includes all the part suppliers. Their logistics system is a part of dells supply chain. It includes also the retailers and supplier. Other company's logistics included in Dell's supply chain. Logistics is an early version of the supply chain. Logistics originated in the US military. Flow of cargo (people, weapon in war is logistics. ) Organizing a course/seminar – logistics needed for success.Today all the successful companies find their competitiveness from logistics, not from the product itself. E. G. Walter (retailer, wholesaler, supermarket chain) – their competitive edge comes from logistics. They are not selling anything different from others. They have a superior logistics system. Logistics make them succeed. Dell also, service is good, price attrac tive – success comes from logistics. Another definition people define logistics differently but they mean the same thing. Slide Logistics/Concept 4 Instead of saying process, they say optimization, etc. Process of location.Says movement and storage of resources instead of saying goods/services and information. They call logistic activities economic activities. Transport is one of then, port services, production, storage, distribution, etc. – take place bet. The point of origin and point of destination and consumption. Logistics is about the 5 RSI. What are the 5 RSI? Logistics is about getting right goods at right place at right time in right form at right price. Military is really about this. In commercial entities we emphasize on the price a lot. This is also the definition of logistics.Right goods, right in quality in correct quantity. Different level of logistics. In-bound, out-bound logistics. Logistics of production (table, book, car, etc. ), there are two levels of logistics. Logistics within the production process – in the factory. How do you optimize the production within the factory? We call this operational logistics or workers together. How do you put temporary storage along the assembly line? All this is logistics. E. G. WHIM library – lack of space. How to maximize space? Library space layout. It's about logistics. Different factories have different layouts – this is logistics.We are interested in logistics before the production starts. The cargo coming into the factory and when the production is finished, the cargo moving out to the next step – all towards the final consumption. This is what we call in-bound and out-bound logistics. This is what we are interested in. Maritime transport takes part in inbound and out-bound logistics than for production logistics. We are interested in how to move material to production and from production to consumers. When we try to understand logistics, we look at some lo gistics questions for example a typical question is about where to find the raw material needed.Raw material may be in different places. Some places might have different quality and prices. The difference between that place and the production might be different and therefore remonstration time and cost might be different. Where to find energy supply? Labor supply? Should you move your factory offshore to benefit cheap labor? If you do that be careful that higher prices might have to be paid on other services for example transportation. Where to set up production bases? In shipping, where should the port be located? Where to build warehouse and distribution centre. E. . Toyota car has their distribution centre for the Nordic countries at the port of Mammal. Before that they had centre in all the countries. So many distribution centre, different logistics cost than if there is a concentration of activities. Where to have branch organizations? The answers consider a lot of activities i ncluding transportation. We are in maritime transport so we are affected by the customers decision. Other types of logistics questions for ex. How to transport from A to B and choice of transport mode – air sea, road. Egg. Oslo to Mammal – road, sea. Air, rail.Different modes of transport have different logistics implications. Ex field trips – logistics question, how to transport students – sea (too long), air, road, rail. How to transport container? Hub and spoke – benefit from economies of scale. More cargo handling costs. The best solution must be a logistics solution. Best way to transport cargo from A to B. Flow and storage from point of origin to destination to comply with customers' requirement. Moving from A to B different options – different solution. When should transport start – how long should it take. Route? Storage? How, when needed?Mat of cargo to be transported at one time? Economies of scale? Packing needed? Logistics is everywhere. Farmer from southern Sweden – buy fertilizer in Sweden, buy from Germany (expensive land transport), buy from US where its much cheaper, but he has to pay more transportation cost. Where to find the material? Emphasis is on maritime transport – movement of goods. Shipping co. Transport goods – need info to do so. Port and shipping concerned with flow and storage of goods. October 28, 2008 Session 2 Slide Logistics/Concept 9 There always has to be a logistics concept. And a logistics concept is what?It's about total cost concept. This is the most important concept. It looks easy but total cost concept is not always observed, so people make mistakes as a result. It is a customer service requirement. Logistics concept is also about outsourcing, integration, global about concept, it is also about processes. The processes we call drivers. It drives the logistics process. It can't all be about concept. It has to be something tangible. Logistics is abou t processes. We are doing these everyday, ex. Manufacturing and transportation, distribution, inventory control, procurement.These are all activities, but the difference between these and logistics are that we are doing these in an integrated manner under the concept of logistics. So we have the concept and the drivers. The difference between these activities and logistics, we are doing them under the total cost and the customer service concept, so this is relatively new. Third is IT. We call IT enablers – that enables us to do the processes under the concept of logistics. Sometimes we can't do the processes (drivers) without IT. Ex. Dell computers. They obtained their competitive edge from logistics.Logistics means to get a computer from the production to the customers without any retailers. No middlemen. Order online, design own computer. The aim of logistics is to minimize the total cost. Can only do this with IT tools. So the three components have to come together using t he IT tools. We need to understand the role of IT in the whole process. Ex. Just in Time system. This is Inventory control under the concept of egoistic using information technology. The 3 components have to work together. How do we take all these functions (MFC, transportation, distribution, warehousing, etc. In an integrated manner under the concept of logistics using IT tools. Ex. Individual delivery. Concept is to minimize total cost. Total cost is manufacturing, transport, didst. , etc. How do we minimize that? Use IT. Dell used IT to find out that their total cost will be minimized if they cut out the middle man. IT enables the cutting out of the middle man. Good online service. Shipping line is not making anything – it is a part of transport. Shipping companies as a company have logistics problems also. Shipping has a double role to play.Shipping is a part of the logistics chain of a customer, but at the same time they have their own logistics problem. Shipping's logis tics problems include arranging bunkers, choosing port of call, types of service to provide, empty container management, repositioning of containers, terminal logistics, fleet logistics, agency logistics, but shipping as a service provider is part of the logistics of customers. Ex. KEA – furniture maker – shipping important. Shipping has a double role to play. Ex. Wimp's logistics service. Logistics in third world countries is not good enough. Read World Bank Report.The three components of logistics are important. Dell manages their total cost through logistics, so does Wall-Mart. All the processes have to be IT enabled. Control-implementation-control. HP has a fixed model on the shelf. Dell, make your own – different customer service. One is enabled by IT. Logistics has 3 components – concept, process, IT. Slide logistics/Concept 10 Supply chain – different sources to choose from. Take one then the next step and the next. This is the flow of cargo from origin to destination – the flow of information from user to origin. Information flow and cargo flow go in opposite directions.Ex. Dell – the information goes from the customer to Dell and the cargo from Dell to the customer. How will the producer know what kind of products the consumer will need? The consumer will have to tell. Opposite directions. Dell transport one computer to each customer so the customer pays more for transportation, but other costs like the shops and overhead related costs do not exist. If we compare this cost with the cost is very important. Total cost concept can be better understood by looking at slide Logistics/Concept 1 1 . This is a Total cost in Logistics and Supply Chain System.Marketing and logistics are closely related. This picture is very true. What is marketing? It is about the 4 As – product, price, promotion, place. So in this marketing there is one component about place which is about logistics. In the logistics about the place and the customer service (where the customer wants the cargo to be) and there are other cost elements. Ex. Related to place, transport cost has to be incurred – also warehousing cost, flow and storage. Other costs like inventory costs will be incurred. What is the difference between inventory cost and warehousing cost – inventory cost for keeping goods in stock).Inventory cost is the value of the goods. Books for new WHIM students – cost of book (inventory) plus storage (warehousing). Processing and information cost – each time we order, we have to follow procedure, fill in forms, etc. Processing cost can be high. Egg. When we are transporting our boxes home, have to have bill of lading. This has a cost (processing and information cost). Lot quantity cost – economies of scale. Purchasing/transporting/buying a big amount and will benefit from economies of scale, this is called lot quantities. Put all these 5 elements together and this is total cost.The objective of logistics is not to optimize a cost element, it's not to minimize a cost element, but rather to optimize the total cost and minimize the total cost. Minimize the total cost – this is what logistics is all about. This is easier said than done. KIT, the idea is to reduce the inventory cost to zero if possible. At the same time warehousing cost is being reduced – this is a good system. What other cost will be affected – transport cost. All these cost elements are interrelated and interdependent. So interaction and interdependence are also important.Change of inventory will affect transport cost, lot quantity cost, etc. KIT system for example – daily consumption of rice. Let's say we eat egg of rice each time. Based on KIT, each time we need rice, we should buy only egg. Do we do this? No, then against KIT principle. We buy 200 kilos – 2 cost occur – inventory cost and the money spent on the rice cannot be used (capit al tied up – cash flow problem). If this money was put in the bank it would generate some interest. Where is the rice put? The place occupied by the rice can't be used for something else.In production if you buy too much to get economies of scale from purchasing, we'll incur a high inventory cost. If we are not buying kilos, we buy a quantity in between – say 2 kilo. Optimal total cost. If we buy egg each time inventory cost is zero – have to buy each time we need to cost. That is time and transport cost. Lot quantity cost will change as there is no savings to be got through economies of scale. And each time we buy there are other costs like information and processing (maybe not in the case of rice, but generally). Put all these costs together, and find a good place in between. We do this by Cost Trade-off.Cost Trade Off Slide Ex. Manufacturing activity involves making projectors in Mammal, Sweden and need to supply them to the rest of Europe. No distribution ce ntre, or warehouses, or depots, o because we cover the entire Europe, each time we have an order from someplace in Europe, we pack the projector and send it off. What do we save – inventory, we do not keep inventory. What do we have to spend more – transportation cost will be very expensive. We therefore have to find out if we have a warehouse somewhere in them from Mammal to the customer; we send it from that storage which is closer so we save transportation cost.How many such warehouses we need to cover Europe? It depends on the elements: transport, inventory, lot quantity, warehouse costs. In optimizing all these costs together is a logistics decision. Ex. In the case of the depots, we might have 8, 10, 12 to cover the entire Europe. What cost elements we have in the case of the distribution of projectors in Europe. First the systems cost, the processing and information cost. When there is a centre there needs to be a computer system, a financial system, etc. If the re is no centre, the system cost is very low.The more centre, the higher the system cost and this is a storage cost. If there is only one storage at the headquarters in Mammal, the cost would be relatively low. As the numbers of depots are being increased the storage cost will be very high. Inventory cost – more depots, more stock – higher inventory cost. Trucking cost – tree has trunk and branches. Trunk means main transportation, branches mean local delivery. Transport cargo from production to main distribution centre = trunk transport and then from distribution centre to each individual apartments = local delivery.Trucking cost – the more centre, the more trucking cost. If there are no depots, each time to ship from mammal to each individual location will be very high. The more depots, the less the local delivery cost will be. The total distribution cost is the addition of all cost, this is what we call total logistics cost. When we have the total logi stics cost curve it corresponds to the number 8 meaning there should be eight distribution centre. So this is the solution – 8 centre. As costs change, oil, etc, the optimal numbers of centre will change. Its not static, its dynamic (the Total Didst. Curve).Logistics – one has to plan, implement, control. If the individual costs are changed then total cost will be different – high/low. E. G. If the interest becomes low – inventory cost will be affected as the capital will become cheap. If oil cost increase, interest rate decrease – could end up with more centre which means saving more rainspout cost, esp.. Local delivery cost. Transport cost in total will be less. Inventory cost is dependent on interest rates. May have 9/10 depots. # of depots depend on cost elements. Cost trade off is important. With depots total cost is lower, so this will save cost.Having depot is a cost but the cost is lower than not to have them. E. G. KEA used to rent warehou ses, now they build – benefit of depreciation. Next Slide Logistics cost in the USA Logistics cost include transportation cost, inventory, warehousing, distributing, etc. How much logistics cost people pay as a percentage of a country GAP – 10% in the US. Inventory cost increase faster than the transportation cost bet. 1980 and 2005- why? Better inventory control, interest rate lower so inventory cost lower. Interest was low in the rest of the world until about 2005. Deflation = lower inventory cost.In other countries this percentage is much higher. China – 18% of GAP spent on logistics (used to be 20%). China is more representative of developing countries. So in developing countries logistics systems are not as efficient as those in industrialized countries. 9. 5% is similar in Europe and Japan (COED countries). In developing countries it's much higher. Includes all logistics cost element – transport, inventory, etc. – big room for improvement. Ne xt slide Customer service is another concept. Customer service is the output of logistic based, performance-based, philosophy based.Activity based e. G. After sales service, marketing, public relations. Performance based – what is the standard? Ex. Dell computer is performance based, delivered in 48 hours – performance-based customer service. Can be measured. Ex. , ports – waiting time for ships – rush. Philosophy based on what customers require is the customer service – according to customers taste – before, during, and after transaction. What is transaction? Buy goods, pay. Customer service can take place before this, during, after. Changes in CSS level affect total logistics cost. Next slide CSS High, Low.Cost Low/High – the higher the customer service level, the higher the cost. No ship should wait in port for more than 3 hours. This will cost a lot of money – will have to build more berths. Define customer service level. T ry to minimize total cost based on this pre-condition. Why CSS level increase and inventory level affected. The higher the CSS, the higher the inventory level. Goal: increased SSL, so high inventory level. It's a decision the company makes – customer service level is very important. (Refers to graph on the right) Try to find a way to push the line by introducing a better way of production e. . Using IT, new production method. Reduce cost but still satisfy goal – IT, use better system. Next slide: industry norm, etc. Customer's response to stock out. Is a risk being run of losing the customer? All different ways to define the customer service level. KIT System Developed by Toyota. Called the Kanata system. When a container of parts is chosen to be used from inbound stockinet in-out in-out This is the production. Eng the assembly line how do you get different stages to work together in harmony. The system has two cards. KIT works with 2 cards – the move cards and the production cards. Hen you see the move card, time to move the container or the other card, time to produce. Work centre 1 the card moves along the production line from one work centre to the next. Toyota manage to have minimum inventory along the assembly line. They have one container of part. Cards are turning around and the parts are being moved from one centre to another. For logistics a better understanding of Just in time is very important. 9 Cot 2008 There are two circulations of cards. How do the 2 circulations make the KIT system work? Why does it work? Key elements: to reduce inventory therefore reduces the capital tied up in inventory.Planning, staff commitment including suppliers, suppliers' ability to meet the demand. Some inventory is kept because there is a container. One piece at a time is being used from the container so the rest must be inventory. What is the average inventory? What is the customer requirement? It's the size of the container. The container is fu ll – how big is the container. How is the size of the container defined? The size of the container is planned based on production. Supply 20 units at the beginning and then it's consumed and a new container comes. The container is consumed during a cycle. The cycle is the time needed.The average inventory is a half of the container what ever the amount it contains. Typical KIT, there should be no inventory so why is inventory kept? When we need egg rice why don't we get exactly that? Other costs would increase too much. KIT – to keep as little inventory as possible. The size of the container depends on what? Transportation two don't match then the size of the container needs to be changed. If the transport sakes more time then increase the size of the container and vice versa. Transport time important. Volvo had KIT between Gent and Mammal. How much inventory should be in the Volvo factory in inventory?A lot. Why? Engine parts are made in Sweden to be used in Belgium. This transport takes one week by ship. As it takes one week, there should at least be spare parts for one week. Toyota has KIT. In the city of Toyota in Japan within 30 kilometers of the factory all Toyota parts are made there. This is the perfect KIT system. KIT emphasizes the reliability of the transport system. The two containers must have the same matching size. If parts can't be produced in time, the cart must be moved earlier. At the moment one container is taken to the in stock point, another container load of part should be produced.Suppose the production takes more time than when one cart comes back? Egg. If production takes 20 hours, parts can be made in 10 hrs. The time information is sent – information flow is the key. Plan to know how long production will take. In Japan, transport is guaranteed (Toyota). What is supplier commitment? Shortcomings of the KIT system? Now we assume we only need 20 parts in 10 hours, how about if the demand change and we need 30 parts in 10 hours. If the speed of production is variable the whole system is challenged. If the demand is certain/flexed then it can be planned – production rate and transportation.But what if production rate changes? This is a challenge for some of the production down the line that may need more time and material which might have to come from far. Not easy to adjust production. Shortcomings: Does only one supplier have to be used with KIT? No, Honda uses more than one supplier. In KIT, anything that goes wrong will collapse the entire system. In KIT the entire chain has to be KIT, it can't be at only one stage of the production. If not it forces other suppliers downs the line to keep inventory. KIT of big companies push inventory down the line if the don't plan effectively.Because smaller suppliers want to satisfy big companies, they are forced to keep inventory. KIT has to be along the entire supply chain. KIT may be only at the very large suppliers who push the inventory down the line to smaller suppliers. Toyota case: 1/52 weeks car production stopped because of a fire at one supplier – ripple effect. The decision of Toyota to do nothing was based on the total minimum cost of they did various studies. CCITT Case: The reliability of transportation and the uncertainty factors make logistics system key. The importance of information. Logistics concept drivers enablers, under total cost and customer level.KIT will never work without IT. Everything works together with IT supporting the processes under total cost and customer level. The process, concept or IT cannot work separately. Information is critical for success as well as the reliability of demand. Forecast and planning important to know when demand change. Transportation is also important for this system. If the transport distance is long, the container has to be big. The size of the container is influenced by time (transport). Transport is via sea – only use air in case of emergency. If transport takes a long time or is unreliable then more inventory needs to be kept.Gent is the biggest Volvo manufacturer. Terrines transport the parts from Sweden to Belgium. The shorter the interval of the shipping service, the lower the level of inventory required. This can make the transport expensive. So it's the total cost that is important that will Supply chain 2 definitions (see slide): it's a network, not port to port. In logistics there is no procurement. The 2 key words in logistics are flow and storage. Supply chain includes manufacture. Transformation = manufacturing. 1st law of dynamics – don't create anything, only change the form. Supply chain includes much more than logistics.Logistics narrowly defined. Supply chain is broader. Procurement also concerned with about origin of the goods. Optimization Integration Collaboration Synchronization Optimization – optimize one stage, the entire thing is not optimized so integration has to take place then consol idation then synchronization (concerted manner, happening in the same time). Relationship along supply chain. Start from optimization to synchronization. The idea of supply chain is relatively recent compared to logistics. 1960/ass people start to talk about total cost. E. G. In stage one warehousing and transport are separate functions.Management focus was operations performance. No integration. Logistics integrated both to see how they can be optimized. This is called total cost management. So the focus changed to optimizing total cost and customer service. Customer service put together with cost. Organization design is a centralized function. 80,s integrated logistics function. This moved today to supply chain MGM. Put logistics together to get supply chain. Supply chain broader than logistics. Stage 1 -separately treated, not optimized. Optimization done within the company. Optimize internal functions – transportation and inventory.Intra company and intra functional. This function is a logistics function. The logistics function today is moving still in the company but inter functional. Everything in the company put together – integration. Toyota inter company – higher level of integration. Toyota owns the supplier – easier to do KIT. Companies are integrated supply chain – Inter company and inter functional. Dell and their suppliers are integrated. Also Wall-Mart. The producers don't take orders from Wall-Mart – the ‘cards' in KIT comes from individual supermarkets. Producers can check storage level of Wall-Mart outlets.Everything is totally integrated. No personal intervention to place order etc. The system is integrated – good supply chain – inter company. Next Slide From fragmented logistics to integrated supply chain. In the fist stage do one function at a time – inventory or warehouse or transport. In the later stage, intra functional – the whole function optimized. From fragm ented logistics to integrated SCM. Suppliers, manufacturer, distributor, retailer, customer are all integrated with he other functions in the company and go to the next stage you integrate between the functions in the companies and between the companies.This is interception and will become in the true sense a supply chain. Supply chain broader today than the logistics. SC have to work with other companies. To satisfy your customers require more than one company: need supplier, manufacturer, distributor, and retailer. E. G. Markers – their system integrated with some of their key customers – key client management. Copra's definition of supply chain. Within an organization there is a supply chain. Egg. WHOM, teaching, supply services, library, canteen, etc. Al depots. Work together to satisfy customer. SC decisions – have to have supply chain design and strategy.Strategic level, medium term, short term – operational, daily and based on the company's competi tive strategy. Michael porter: define competitive strategy in terms of product differentiation or cost cutting leadership. How to achieve strategy: SC strategy. Balance bet. Efficiency and responsiveness. How to respond to demand? Efficiency includes cost-effectiveness, I. E. Cheap. Fast response – this is provided at a cost. Efficiency might compromise cost. Decision making is from lower level to higher. Many competitive strategies come from SC strategy. Wall-Mart is from logistics.Dell is from Supply chain Beer game: Once demand is variable SC difficult to maintain. KIT difficult to maintain. Long time to reach an equilibrium. In the end have to keep large inventory. Once demand is unstable KIT is not suitable. SC Design. Planning is important. SC design is about planning. When suppliers design their supply chain maritime and port services is a part of that. So mapping is important. Stockholders point is storage. Horizontal line represents move. When it stops – verti cal lines = storage or waiting. Egg. BBC container tracking. This is SC mapping.Horizontal line is lead-time (time from production centre 1 to production centre 2). Lead time depends on inventory to determine when order is to be placed. SC starts from the fiber and end with the clothes on the shelf. Through this we see pipeline length and volume. E. G, coca cola. Postponement of safety stock What is postponement? H and Ezra – they use postponement principle. Clothes must be in fashion. Don't know faction of 09. Try to postpone as much as possible the manufacturing time. Forecast, ii, postpone. Dell also uses this strategy. Don't develop their machines until last moment.Can use the latest technology and the price gets cheaper. Anticipate time needed and kind of product needed. Decision is postponed to the last moment. Postponement principle can reduce stock. Has bearing on transport too. Better information flow will impact SC. Next slide Sometimes for material flow speed might not be appreciated. Transport is used as storage to adjust transport time to match with performance. Sometimes it's because of the price. E. G. Iron ore in China, there is too much now. Information speed is always good but for material sometimes it needs to be fast and other times not so fast.Compression of lead-time in manufacturing activity. Supply chain map – length (vertical) volume (horizontal) – try to compress it to see possibilities to reduce some of the variable. Ocean transport can't be adjusted as speed can't be reduced. SC design. Lead-time is transport. Port of Amsterdam case study summary Market research – likelihood to attract new carriers / guarantee – balance and supply (elasticity). When port built no congestion in Europe – more port than ships. Impossible to get firm commitment – plenty choices. More supply than demand. Demand price inelastic. Shipping companies never give guarantees.Optimization, integration, collaborati on, synchronization. Have to synchronize. Increase speed of one operations but the speed of other things remained unchanged. No synchronization. If the discharged boxes cannot be moved this is a logistics problem. The concept of logistics: most important – total cost. Port of Amsterdam forgot total cost. Typical failure case that should never have been done. Restricted berths – bigger ships cannot fit in today – size is restrictive. How wide and long should ship be. (Panama Canal has size restriction and is thus a constraint – ships in the Asian