Working Capital Simulation Essay Example for Free

Working Capital Simulation Essay SELECTION CRITERIA: In selecting what option to select the team came up with the following criteria: 1.) Selected option should lead to a reduction in working capital requirement and reduce short term debt in the process. 2.) Selected option should reduce the Cash Conversion Cycle. 3.) Selected option should free up locked capital in receivables and inventories. 4.) Selected option should lead to a zero working capital policy in the long run. SELECTED OPTIONS: We decided to tighten accounts receivable and drop poorly selling products because they yielded a percentage decrease in working capital requirement larger than their percentage drop in sales. Also these 2 options fit all the selection criteria we stated above. FINANCIAL RESULTS AND LEARNINGS: The options we chose led to a 44% drop in working capital requirement, drop from 159 days to 128 days in the cash conversion cycle and a 87% drop in debt. Overall we met our expectations of reducing working capital requirement and freeing up additional capital. EBIT has dropped immediately but by 2015 net income was higher by $8,000 despite the drop in $255,000 drop in EBIT in 2013. This surprised the team as we did not expect that in the long run by improving the working capital requirements of the company we reduced costs and increase net income resulting to a total created value of $691,000 for the firm. Despite the immediate decrease in sales in 2013, the overall financial position of the company is better in the long run, and moreover we have a remaining credit limit of approximately $2.8 million which is almost equal to the initial amount of credit borrowed in 2012. PHASE 2: SELECTION CRITERIA: From the learning’s and outcome of phase 1 the following selection criteria was used: 1.) Selected option should yield a percentage increase in sales  with a small percentage increase in working capital requirement. 2.) Selected option should not contribute to a significant degree in debt. SELECTED OPTIONS: Based on our analysis we felt that options 1 and 2 fit the criteria we set for selection best. Combined they show a significant increase in EBIT with a lower increase in WCR. Although we foresee a significant increase in WCR we feel that the credit line we have and the amount of capital we freed from phase would be sufficient to reduce the impact of the additional WCR. FINANCIAL RESULTS AND LEARNINGS: Our choices led to a constant increase in net income over the three years. Short term debt increase by approximately 100% percent but steadily reduced over the next three years. We were happy with the positive growth of the company and the fact that we were able to pay off most of the initial short term funding required by the increase in working capital requirement. Overall the current situation of the company in 2018 is good, although the total value created is less than 20% of that created in phase 1. From this we learned that the value of the firm can be significantly increased more through a reduction in working capital requirement than through increasing the firm’s sales and net income. PHASE 3: SELECTION CRITERIA: For this phase we decided to continue with the selection criteria from phase 1, and continue to try to increase sales with the minimum working capital requirement. We also decided to minimize risk and not go with options that have, however small, a chance of creating net losses for the company. SELECTION OPTIONS: Based on our analysis we felt that renegotiation of supplier credit terms would have a significant reduction to costs, given that most of the other suppliers would also agree to the new terms. Even though the company would need additional working capital we felt that the benefits outweigh the additional funding needed. And given the current credit line utilization and  increased profitability of the company we thought that this was a sound option to take. We also took the global expansion strategy because from a strategic management point of view it seemed like the next step to take in order to increase the company’s profitability in the long run. We again felt that we have sufficient credit and capital to venture into this expansion. FINANCIAL RESULTS AND LEARNINGS: There was a significant increase in net income but marginal increases in the succeeding 3 years. The most significant impact was in the short term debt wherein projected short term debt in 2021 would be zero, which made us very happy. This means that the company is nearing our goal of having a zero working capital requirement. This zero short term debt would also mean increased profits, and would improve our outstanding relation with the bank. Our final firm value is $4,259,000 which is significantly higher than it was in 2012. Overall we felt that we made the right decisions and our selection criteria were spot on. Value is not only generated in sales, but also in working capital requirement. And through this exercise we also confirmed that firms with efficient working capital requirement would be the most competitive in the market.

Management Information :: essays research papers fc

Planning for Management Information System Planning for Management Information System The biggest challenge and most critical success factor in reengineering projects are persuading the people within the organization to cooperate. When you begin to computerize a legacy system considers the advantages; reduced clerical cost, quicker processing time and improved customer service. Everyone knows that the computer capabilities alone make life a lot easier for all managers. The advantage of time and accuracy spread over the lifespan of the information system means improved long-term vision and focus for top, middle and lower managers. A management information system (MIS) focus is on information that management needs to prepare its job. This task becomes much more difficult when the major players have a tradition of high independence, are often confrontational to management, and are irreplaceable independent contractors. CIO's in major business organizations face exactly this situation; further complicated by the fact that the reengineering effort is crucial to the continued existence of the organization. Such discussion has driven the software industry to focus attention on software specifically designed to support the team approach essential to most service and customer oriented organizations. The importance of teamwork can not be over emphasize in achieving overall organizational goals, and the need to capture and manage an organization's knowledge base remain crucial. This teamwork enables the organization to achieve and sustain competitive advantage in their business. In considering the framework for an information system (IS) each level operational, tactical and strategic planning requires different IS. At the operational planning system, the IS collect, validate and record transactional data relating to acquisition or disbursement of resources. The data for account receivable and payables, payrolls, inventory level, shipping data, printed invoice and cash receipts recorded as they occur. The operational-level IS characteristic are repetitive, predictable, emphasizes the past and detailed in nature just to name a few. The focus of the operational system is the daily tasks performed at the user level. The operational level manager uses this data to check every day tasks, i.e. ordering, shipping, inventory control, the essence of the business processes. The second level in the framework is the tactical system. This system provide middle-level managers with information to monitor and control operation while allocating their resources efficiently. The data is summarized, aggregated, or analyzed with a wide range of reports, i.e., summary, exception and ah hoc reports. The tactical information system differs from Management Information :: essays research papers fc Planning for Management Information System Planning for Management Information System The biggest challenge and most critical success factor in reengineering projects are persuading the people within the organization to cooperate. When you begin to computerize a legacy system considers the advantages; reduced clerical cost, quicker processing time and improved customer service. Everyone knows that the computer capabilities alone make life a lot easier for all managers. The advantage of time and accuracy spread over the lifespan of the information system means improved long-term vision and focus for top, middle and lower managers. A management information system (MIS) focus is on information that management needs to prepare its job. This task becomes much more difficult when the major players have a tradition of high independence, are often confrontational to management, and are irreplaceable independent contractors. CIO's in major business organizations face exactly this situation; further complicated by the fact that the reengineering effort is crucial to the continued existence of the organization. Such discussion has driven the software industry to focus attention on software specifically designed to support the team approach essential to most service and customer oriented organizations. The importance of teamwork can not be over emphasize in achieving overall organizational goals, and the need to capture and manage an organization's knowledge base remain crucial. This teamwork enables the organization to achieve and sustain competitive advantage in their business. In considering the framework for an information system (IS) each level operational, tactical and strategic planning requires different IS. At the operational planning system, the IS collect, validate and record transactional data relating to acquisition or disbursement of resources. The data for account receivable and payables, payrolls, inventory level, shipping data, printed invoice and cash receipts recorded as they occur. The operational-level IS characteristic are repetitive, predictable, emphasizes the past and detailed in nature just to name a few. The focus of the operational system is the daily tasks performed at the user level. The operational level manager uses this data to check every day tasks, i.e. ordering, shipping, inventory control, the essence of the business processes. The second level in the framework is the tactical system. This system provide middle-level managers with information to monitor and control operation while allocating their resources efficiently. The data is summarized, aggregated, or analyzed with a wide range of reports, i.e., summary, exception and ah hoc reports. The tactical information system differs from

Being an Outsider is Detrimental Essay

An outsider is a person who does not belong to a particular group, who is not accepted and is consequently isolated. However, to not belong can be detrimental as we all have an intrinsic need to belong. To belong implies an understanding of the needs of the individual and the group and negotiating a way towards acceptance of those needs. On the other hand, exclusion occurs when the individual and the group fails to understand one another, which can be detrimental. These ideas are demonstrated in Alex Buzo’s play â€Å"Norm and Ahmed† and in the poem â€Å"Kimberley† by Jackie Kay. Often we search for a sense of belonging to place and when we do not find it, we are not fulfilled. In the play, â€Å"Norm and Ahmed† Ahmed, an Indian, has little connection to Australian culture and therefore sees himself as an outsider. This is immediately evident in the way he dresses in his traditional Nehru style suit which is juxtaposed to Norm, an Australian, who wears typical male western style of clothing of â€Å"open-necked white shirt and grey trousers.† To remind Ahmed that he is an outsider, Norm repeats the phrase â€Å"a visitor to this country†, and he also assumes that all South Asian people are Indians, stereotyping India as an uncivilised country filled with dangerous â€Å"Bombay stranglers†. This metaphor shows that Norm makes sure that Ahmed is regarded as an outsider by talking in a superior tone and debasing India through juxtaposition and contrast of Sydney and Bombay as â€Å"this isn’t India mate, you’re in Sydney†¦Ã¢â‚¬ ¦you’re quite safe†. Furthermore, Norm is constantly reinforcing Ahmed’s ethnicity and feelings of being an outsider through derogatory terms such as â€Å"boong† and â€Å"chow† because he himself feels confident in being an insider of the Australian culture. Norm’s body language described in strong present participles as â€Å"prowling† â€Å"circling† and â€Å"grabbing† and stage directions reinforce Norm’s confidence and intimidation telling Ahmed that he is an outsider. Norm believes that Ahmed is not entitled to make judgements about Australia stating â€Å"I wouldn’t throw my weight around in someone else’s country.†This shows that a person of a different ethnic background will be made to feel an outsider and alienated if those of the main culture do not make an effort to include them.

Managing Big Data Systems - 2359 Words

Definite answers regarding how much usable data is actually being generated by city-sized populations, and best places to get it could be the subject of a future study, but social media platforms may be the source most easily tapped into for this type of data. Employees of local IT departments are in danger of having difficulties storing and processing data from social media platforms to use as a foundation for aligning social network analysis with the systems . There is a growing demand for those having the necessary skillsets to deal with big data. Local governments (especially smaller-sized ones) might have special difficulty acquiring these resources which makes finding a comprehensive solution for combining â€Å"big data†, SNA, and GIS even more difficult, as data manipulators are in short supply. A survey supporting a Public CIO Special Report (The Trouble with Big Data Talent, 2013), finds that more than half of government agencies polled were experiencing data-related hiring difficulties - meaning there is a shortage of individuals who possess an engineering background, can model data mathematically and can contribute to organizations effectively using data insights for decision making. Using the Data Using data mining techniques, such as graph mining and social network analysis on regional data sources could contribute great insights and improve operations. Social networking analysis is the study and analysis of networks involving social interaction. Types ofShow MoreRelatedBig Data And Healthcare Industry1344 Words   |  6 Pagesindustry, data plays an important role. So it’s necessary to understand the fact that the big data must be used in a right way to make health service industries successful. 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