Chap016 - Chapter 16 - Assets: Inventory and Operations...

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Chapter 16 - Assets: Inventory and Operations Management CHAPTER 16: ASSETS: INVENTORY AND OPERATIONS MANAGEMENT Chapter Summary The chapter covers all assets – short-term and long-term – other than cash. Determining their value and managing them are covered, as well as analysis of capital decision making. Lastly the pros and cons of buying, leasing, and renting are considered. Learning Objectives After studying this chapter, the student should be able to: 1. Learn how to manage short-term assets. 2. Determine the value of the assets in your business. 3. Master managing fixed assets. 4. Understand how to analyze capital investment decisions. 5. Recognize the advantages of renting or leasing capital equipment. 6. Understand how to manage and improve the operations of your business. Focus on Small Business: Curtis Graf and the Nightmare on Construction Street Curtis Graf had a thief drive off in a $40,000 backhoe. The case addresses his problems in trying to recoup his loss. Focus on Small Business: Discussion Questions 1. Why do you think that thieves target heavy construction machinery? a. Because there is a ready market to sell it. b. It is difficult to trace as it does not require government licenses. c. Even at the prices that stolen property brings, a piece of heavy equipment can still bring the thief tens of thousands of dollars. 2. To what extent do you think that Curtis Graf’s negative experiences with insurance coverage for theft is commonly encountered by small business owners? Insurance companies are always eager to collect premiums and loathe making indemnity payments. Such experiences are common. 16-1
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Chapter 16 - Assets: Inventory and Operations Management 3. Why do you suppose that fewer than 15% of stolen heavy machines are ever recovered when the FBI reports that 62% of stolen automobiles are recovered? a. Automobiles have to be inspected and licensed in all 50 states, tractors, loaders, indeed all heavy equipment except over-the road trucks do not. During licensing, irregularities in the title are likely to be disclosed. b. Many automobiles are stolen by youth who really intend only to joy ride, not dispose of the auto. Joy ride cars that are found abandoned are counted by the FBI as being recovered. 4. Think of the business that you own, or would like to own. How and to what extent would the theft of machinery or equipment be a threat to your business? Answers will vary. Extended Chapter Outline Note: Key terms are in boldface. Teaching tool Internet application International application Group activity Objective 1: Learn how to manage short-term assets. 1.1 Your business is a collection of assets, things you own that will provide value in the future. 1.1.1
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This note was uploaded on 11/21/2009 for the course MNGT 422X taught by Professor Godsey during the Spring '09 term at UNL.

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Chap016 - Chapter 16 - Assets: Inventory and Operations...

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