PRACTICAL EXERCISE 4

MNAB 312=412=422

Jayson Y. Marquez
BSEE

I. DEFINE OR DESCRIBE THE FOLLOWING:

1. Operations - an area of technical management dealing with the design and analysis
of production and service processes.

2. Operations Management - is the administration of business practices to create the

highest level of efficiency possible within an organization.

3. Efficiency - efficiency is the production of an output in a qualified and competent

way in terms of the agreed scope, cost, time and quality, where quality is not a
constraint per se but is often a by-product of the other three factors (scope, time
and cost).

4. Effectiveness - Effectiveness is the ability to produce a better result, one that

delivers more value or achieves a better outcome.

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

6. Trade Creditors - Trade creditors refers to suppliers extending credit to a

buyerfor use in manufacturing, processing, or reselling goods for profit.

7. Bonds - The bond protects against disruptions or financial loss due to a

contractor's failure to complete a project or failure to meet project specifications.
By submitting a construction bond, the party managing the construction work
states they can complete the job according to the contractual policy.

8. Common Stocks - is a security that represents ownership in a corporation.

Holders of common stock elect the board of directors and vote on corporate
policies. This form of equity ownership typically yields higher rates of return long
term.

9. Retained Earnings - are the amount of profit a company has left over after
paying all its direct costs, indirect costs, income taxes and its dividends to
shareholders. This represents the portion of the company's equity that can be
used, for instance, to invest in new equipment, R&D, and marketing.

10. Open book credit - An open credit is a financial arrangement between a lender
and a borrower that allows the latter to access credit repeatedly up to a
 specific maximum limit. Once the borrower starts making repayments to the
account, the money becomes available for withdrawal again since it is a revolving
fund.

II. Give your response about production and service operations:

1. Enumerate and describe the types of manufacturing/service process.

 Repetitive manufacturing
A manufacturer uses process types like repetitive manufacturing for
repeating production to commit to a production rate.

Repetitive processing comprises dedicated production lines that produce

the same or similar items, 24/7, all year round. With its requirements for
setup being minimal or having little changeover, the operation speeds can
be increased or decreased to meet customer demands or requirements.

 Discrete manufacturing
Like repetitive manufacturing, discrete manufacturing also utilizes an
assembly or production line.

However, this process type is highly diverse, with a variety of setups and
frequent changeovers. This is due to factors based on whether the products
in production are similar or different in design. If the items are vastly
different, this will require altering the setup and a tear-down, which means
production will need more time.

In theory, the types of manufacturing businesses that use discrete

manufacturing produce products that can be broken down and recycled —
automobiles, furniture, airplanes, toys, smartphones, etc.

 Job shop manufacturing

Unlike the other process types, job shop manufacturing makes use of
production areas rather than assembly lines.

This production process will produce smaller batches of custom products,

either made-to-order (MTO) or made-to-stock (MTS). Organizing
workstations in a job shop setting allows manufacturers to make one
version of a custom product or even a few dozen in batches. If customer
demand requires it, the operation can become a discrete manufacturing line
with selected labor operations being, potentially, replaced by automated
equipment.

It’s good to choose these manufacturing types if you’re a manufacturer

handling bespoke products or work on a project-to-project basis.

 Continuous process manufacturing

 Similar to repetitive manufacturing is the continuous manufacturing
process, which runs 24/7 too.

However, continuous is a different type of manufacturing due to the state

of raw materials being gases, liquids, powders, or slurries. But, in areas
like mining, the products can be granule materials. Product designs are
similar unless the disciplines to create a final product or a production
process are more diverse.

You can find this production process in oil refining, metal smelting, and
even in food production like peanut butter.

 Batch process manufacturing

The final process shares similarities with discrete and job shop processes
— batch process manufacturing.

Depending on consumer demand, one batch could be enough to meet that

demand. After a batch production run, a manufacturer cleans the
equipment to prepare the machinery for the next batch. Batch processes are
continuous by nature.

Batch processes are achievable when ingredients or raw materials aren’t

made to a strict standard. Like the continuous manufacturing process, the
product ingredients are similar, and the production process is more diverse.

Types of manufacturing like repetitive manufacturing distinguishing

characteristic is its use of assembly/production lines.

Source: https://katanamrp.com/blog/types-of-manufacturing-processes/

2. What are the important parts or activities of productive systems?

What are productive systems?

Productivity systems are practices, guidelines, or systematic methodologies that

help people get things done in an efficient manner. The best productivity systems
are structured — but flexible — and are generally easy to adopt.

Their constituent parts are labour, the means of production, the social system in
which production is organised, the structure of ownership and control over
productive activity and the social, political and economic framework within which
the processes of production operate.

III. Give your ideas about Marketing Function.:

1. Enumerate and describe the four Ps (4Ps) of marketing.

The four Ps are a “marketing mix” comprised of four key elements—product,

price, place, and promotion—used when marketing a product or service.
Typically, businesses consider the four Ps when creating marketing plans and
strategies to effectively market to their target audience.
 Product
The product is the good or service being marketed to the target audience.

Generally, successful products fill a need not currently being met in the
marketplace or provide a novel customer experience that creates demand.
For example, the original iPhone filled a need in the market for a
simplified device that paired a phone with an iPod, and the chia pet
provided a humorous experience for consumers that was utterly unique.

As you are working on your product, it is essential to consider your target

audience and their unique needs.

 Price
Price is the cost of a product or service.

When marketing a product or service, it is important to pick a price that is

simultaneously accessible to the target market and meets a business’s
goals. Pricing can have a significant impact on the overall success of a
product. For example, if you price your product too high for your targeted
audience, then very few of them will likely purchase it. Similarly, if you
price your product too low, then some might pass it up simply because
they are concerned it might be of inferior quality and cut into your
potential profit margins.

To identify a successful price, you will want to thoroughly understand

your target audience and their willingness to pay for your product.

 Place
Place is where you sell your product and the distribution channels you use
to get it to your customer.

Much like price, finding the right place to market and sell your product is a
key factor in reaching your target audience. If you put your product in a
place that your target customer doesn’t visit—whether on or offline— then
you will likely not meet your sales target. The right place, meanwhile, can
help you connect with your target audience and set you up for success.

To decide the best place to market and sell your product, you should
consider researching the physical or digital places that your target audience
shops and consumes information.

 Promotion
Promotion is how you advertise your product or service. Through
promotion, you will get the word out about your product with an effective
marketing campaign that resonates with your target audience.

There are many different ways to promote your product. Some traditional
methods include word of mouth, print advertisements, and television
commercials. In the digital age, though, there are even more marketing
 channels that you can use to promote your product, such as content
marketing, email marketing, and social media marketing.

Source: https://www.coursera.org/articles/4-ps-of-marketing

2. Identify the steps in strategic marketing and discuss each.

The key to successfully marketing your practice begins with developing

a strategic marketing plan in which each activity is based on solid research and
specific goals, and is implemented and carefully evaluated in a timely manner. The
plan serves as a road map to help you achieve your marketing goals.

 Set your marketing goals. Once you’ve decided to market your practice,
you need to set realistic and measurable goals to achieve over the next 18
to 24 months. This time span allows you to plan activities around
community events that are in line with your marketing goals. For example,
you might help sponsor an annual walkathon for breast cancer or speak at
your community’s annual health fair. Because of the rapid changes
occurring in the health care environment, we don’t recommend planning
specific activities more than two years in advance. One way to define your
goals is to separate them into the following three categories: immediate,
one to six months; short-term, six to 12 months; and long-term, 12 to 24
months.
 Conduct a marketing audit. A marketing audit is a review of all
marketing activities that have occurred in your practice over the past three
years. Be as thorough as possible, making sure to review every
announcement, advertisement, phonebook ad, open house, brochure and
seminar and evaluate whether it was successful.

 Conduct market research. The purpose of market research is to draw a

realistic picture of your practice, the community you practice in and your
current position in that community. With this research, you can make
fairly accurate projections about future growth in the community, identify
competitive factors and explore nontraditional opportunities (such as
offering patients nutritional counseling, smoking-cessation programs or
massage therapy). Your research may even bring to light some problem
areas in your practice as well as solutions you can implement right away.
(See “A guide to market research” to find out what kind of information
you need to gather and where to find it.)

 Analyze the research. Next, you need to analyze the raw data you collect
and summarize it into meaningful findings that will be the foundation for
determining which marketing strategies make the most sense and will get
the best results for your practice The research will identify the wants and
 needs of your current and potential patients and will help you to define
your target audience (for more on target audiences, see step 5, below).
This is also a good time to look back at the goals you’ve chosen. Based on
your research findings, you may need to modify some of your goals.

 Identify a target audience. With the help of your market research

analysis, you should be able to identify your practice’s “target audience,”
which is the specific group of patients to which you’d like to direct your
marketing efforts. Your target audience might include patients of a certain
age, gender, location, payer type or language/ethnicity and patients with
certain clinical needs. Keep in mind that your target audience should not
only be the patients you want to attract but also the people who can
influence and provide exposure to that segment of the population. For
example, if you wish to treat patients with arthritis, you might want to get
involved in the local and regional Arthritis Foundation and explore senior
organizations in the community. If you want to treat young athletes, you
might consider giving talks on sports safety and first-aid tips to coaches
and athletes at the local high schools, colleges and YMCAs. The key to
marketing lies in targeting the audience that your practice can serve better
than your competition – and communicating this to that group.

 Determine a budget. Before you can decide what specific marketing

strategies you want to implement to achieve your goals, you need to
examine your financial information and come up with a marketing budget.
Marketing budgets vary by the type of market a practice is in, the age of a
practice and whether the practice has marketed before. There’s no standard
for how much a practice should spend. However, in our experience,
practices in open markets have spent 3 percent to 5 percent of their annual
gross incomes on marketing. If your practice is new, in a highly
competitive market or has never been marketed before, or if you intend to
roll out an ambitious new program or service, you can expect to spend 10
percent or more of your annual gross income the first year you implement
the plan.

 Develop marketing strategies. With your budget in place, you can begin
to define specific marketing strategies that will address your goals, reach
your target audience and build your patient base. Remember to focus your
strategies on the elements of your practice that can be used to create a
special value in the minds of patients and referral sources. Each strategy
should be related to a specific goal and should be made up of numerous
actions. For example, one strategy related to the goal of increasing patient
satisfaction might be to make the office more patient friendly.
  Develop an implementation schedule. An implementation schedule is a
time-line that shows which marketing actions will be done when and by
whom. The schedule should also include the cost of each marketing action
and how it fits into the budget estimates for the 24-month period. When
creating the schedule, carefully consider how the activities will affect the
current practice operations and whether there are sufficient resources (such
as staff, time and money) to accomplish the necessary tasks. In some
cases, it may be necessary to whittle down the list or postpone some
activities. In other cases, it might be best to go ahead with full
implementation of your plan. If you want to fully implement the plan but
don’t quite have the staffing resources, you might consider bringing in a
consultant to coordinate the marketing activities and/or adding a part-time
staff member to handle the majority of the marketing tasks. The
implementation schedule will also give you a basis on which to monitor
the progress of your marketing plan.

 Create an evaluation process. The value of a marketing plan is its

effectiveness, which requires deliberate and timely implementation and
monitoring and evaluation of results. It’s important to measure your results
against the standards you set in establishing your goals. Review your plan
periodically (we recommend quarterly) by comparing your progress with
the implementation schedule. There are several ways you can measure the
results of your progress: patient survey scores, referral sources, increased
income, increased new patients and decreased complaints.

Source:https://www.aafp.org/pubs/fpm/issues/2001/1100/p39

3. Enumerate and describe the different tools of promotion. Cite example for each.

Advertising
Advertising is defined as any form of paid communication or promotion for
product, service and idea. Advertisement is not only used by companies but in
many cases by museum, government and charitable organizations. However, the
treatment meted out to advertisement defers from an organization to an
organization.

Advertising development involves a decision across five Ms Mission, Money,

Message, Media and Measurement.

Mission looks at setting objectives for advertising. The objectives could be to

inform, persuade, remind or reinforce. Objective has to follow the marketing
strategy set by the company.

Money or budget decision for advertising should look at stage of product life
cycle, market share and consumer base, competition, advertising frequency and
product substitutability.
Message’s development further is divided into four steps, message generation,
message evaluation and selection, message execution, and social responsibility
review.

Once the message is decided the next step is finalizing the media for delivering
the message. The choice of depends on reach of media, frequency of transmission
and potential impact on customer. Based on this choice of media types are made
from newspaper, television, direct mail, radio, magazine and the internet. After
which timing of broadcast of the message is essential as to grab attention of the
target audience.

Checking on the effectiveness of communication is essential to company’s

strategy. There are two types of research communication effect research and sales
effect research.

Sales Promotion
Promotion is an incentive tool used to drive up short term sales. Promotion can be
launched directed at consumer or trade. The focus of advertising to create reason
for purchase the focus of promotion is to create an incentive to buy. Consumer
incentives could be samples, coupons, free trial and demonstration. Trade
incentive could be price off, free goods and allowances. Sales force incentive
could be convention, trade shows, competition among sales people.

Sales promotion activity can have many objectives, for example, to grab attention
of new customer, reward the existing customer, increase consumption of
occasional users. Sales promotion is usually targeted at the fence sitters and brand
switchers.

Sales promotional activity for the product is selected looking at the overall
marketing objective of the company. The final selection of the consumer
promotional tools needs to consider target audience, budget, competitive response
and each tool’s purpose.

Sales promotion activity should under-go pretest before implementation. Once the
activity is launched it should be controlled as to remain within the budget.
Evaluation program is a must after implementation of the promotional scheme.

Public Relations
Companies cannot survive in isolation they need to have a constant interaction
with customers, employees and different stakeholders. This servicing of relation is
done by the public relation office. The major function of the public relation office
is to handle press releases, support product publicity, create and maintain the
corporate image, handle matters with lawmakers, guide management with respect
to public issues.

Companies are looking at ways to converge with functions of marketing and

public relation in marketing public relation. The direct responsibility of marketing
public relation (MPR) is to support corporate and product branding activities.
 MPR is an efficient tool in building awareness by generating stories in media.
Once the story is in circulation MPR can establish credibility and create a sense of
enigma among sales people as well as dealers to boost enthusiasm. MPR is much
more cost-effective tool than other promotional activities.

Direct Marketing
The communication establishes through a direct channel without using any
intermediaries is referred to as direct marketing. Direct marketing can be used to
deliver message or service. Direct marketing has shown tremendous growth in
recent years. The internet has played major part in this growth story.

Direct marketing saves time, makes an experience personal and pleasant. Direct
marketing reduces cost for companies. Face to face selling, direct mail, catalogue
marketing, telemarketing, TV and kiosks are media for direct marketing.

Source: https://www.managementstudyguide.com/tools-of-promotion.htm

IV. Give your ideas about Finance Function.:

1. What are the different sources of funds?

Retained Earnings
Businesses aim to maximize profits by selling a product or rendering service for a
price higher than what it costs them to produce the goods. It is the most primitive
source of funding for any company.

After generating profits, a company decides what to do with the earned capital and
how to allocate it efficiently. The retained earnings can be distributed to
shareholders as dividends, or the company can reduce the number of shares
outstanding by initiating a stock repurchase campaign.

Alternatively, the company can invest the money into a new project, say, building
a new factory, or partnering with other companies to create a joint venture.

Debt Capital
Companies obtain debt financing privately through bank loans. They can also
source new funds by issuing debt to the public.

In debt financing, the issuer (borrower) issues debt securities, such as corporate
bonds or promissory notes. Debt issues also include debentures, leases, and
mortgages.

Companies that initiate debt issues are borrowers because they exchange securities
for cash needed to perform certain activities. The companies will be then repaying
the debt (principal and interest) according to the specified debt repayment
schedule and contracts underlying the issued debt securities.

The drawback of borrowing money through debt is that borrowers need to make
interest payments, as well as principal repayments, on time. Failure to do so may
lead the borrower to default or bankruptcy.
 Equity Capital
Companies can raise funds from the public in exchange for a proportionate
ownership stake in the company in the form of shares issued to investors who
become shareholders after purchasing the shares.

Alternatively, private equity financing can be an option, provided there are entities
or individuals in the company’s or directors’ network ready to invest in a project
or wherever the money is needed for.

Compared to debt capital funding, equity funding does not require making interest
payments to a borrower.

However, one disadvantage of equity capital funding is sharing profits among all
shareholders in the long term. More importantly, shareholders dilute a company’s
ownership control as long as it sells more shares.

Source: https://corporatefinanceinstitute.com/resources/accounting/sources-of-
funding/

2. In your own opinion, why do you think finance function is an important

management responsibility? Cite instances.

Improves organizational profitability; raises the overall value of the firm or

organization; provides economic stability; encourages employees to save money,
which aids in personal financial planning.

The finance function must enable decisions across the organization, which
necessitates a more in-depth understanding of operations, customers, markets, and
the external business environment.

Because the future is uncertain, calculating the expected return is difficult. Along
with uncertainty comes the risk factor, which must be considered. This risk factor
is extremely important in calculating the expected return on the prospective
investment. As a result, when considering investment proposals, it is critical to
consider both the expected return and the risk involved.