THEORY OPS/SCM
FIN; M&S
Managerial Accounting, Supply Chain
Management, Financial Accounting, Marketing
Summary of:
Horngren’s Financial & Managerial Accounting: The
Managerial Chapters: Chapter 16, 18, 22 and 23
Principles of Managerial Finance: Chapters 5, 10 and 11
Supply Chain Management: A Logistics Perspective
Chapter 6, 8, 9 and 10
Marketing the slides of off Blackboard
,Table of Contents
1.1 Chapter 16: Introduction to managerial accounting ............................................................. 3
1.1.1 Why is managerial accounting important? .......................................................................................... 3
1.1.2 How are cost classified? ....................................................................................................................... 4
1.1.3 How do manufacturing companies prepare financial statements? ..................................................... 6
1.1.4 What are business trends that are affecting managerial accounting? ................................................ 7
1.1.5 How is managerial accounting used in service and merchandising companies? ................................. 7
1.2 Chapter 22 Master Budget .................................................................................................. 8
1.2.1 Why do managers use budgets? .......................................................................................................... 8
1.2.2 What are the different types of budgets? ............................................................................................ 8
1.2.3 How are operating budgets prepared for a manufacturing company? ............................................... 9
1.2.4 How are financial budgets prepared for a manufacturing company? ............................................... 10
1.2.5 How are operating budgets prepared for a merchandising company? ............................................. 11
1.2.6 How are financial budgets prepared for a merchandising company? ............................................... 11
1.2.7 How can information technology be used in the budgeting process? ............................................... 12
1.3 Chapter 18: Process Costing .............................................................................................. 13
1.3.1 How do costs flow through a process costing system? ...................................................................... 13
1.3.2 What are equivalent units of production, and how are they calculated? ......................................... 14
1.3.3 How is a product cost report prepared for the first department? ..................................................... 14
1.3.4 How is production cost report prepared for subsequent departments? ........................................... 17
1.3.5 How can the production cost report be used to make decisions? ..................................................... 18
1.3.6 How is a production cost report prepared using the FIFO method. .................................................. 19
1.4 Chapter 23: Flexible Budgets and Standard Cost Systems ................................................... 22
1.4.1 How do managers use budgets to control business activities? ......................................................... 22
1.4.2 Why do managers use a standard cost system to control business activities? ................................. 24
1.4.3 How are standard costs used to determine direct materials and direct labor variances? ................ 25
1.4.4 What is the relationship among the product cost variances, and who is responsible for them? ...... 27
2.1 Chapter 6: Producing goods and services........................................................................... 29
2.1.1 Role of Production Operations in SCM............................................................................................... 29
2.1.2 Operations strategy and planning ...................................................................................................... 30
2.1.3 Production Execution Decisions ......................................................................................................... 33
2.1.4 Production metrics ............................................................................................................................. 36
2.2 Chapter 8: Order Management and Customer Service ....................................................... 37
2.2.1 Order management concept & customer service concept ................................................................ 37
2.2.2 Order Management ........................................................................................................................... 38
2.2.3 Customer service ................................................................................................................................ 40
2.2.4 Order Management Influences on Customer Service ........................................................................ 42
2.2.5 Service recovery ................................................................................................................................. 46
2.3 Chapter 9: Managing inventory in the Supply Chain........................................................... 47
2.3.1 Major Types of Inventory and Reasons for Carrying Them ................................................................ 47
2.3.2 Inventory Costs .................................................................................................................................. 47
2.3.3 Approaches to Managing Inventory ................................................................................................... 48
2.3.4 Inventory Classification ...................................................................................................................... 53
2.4 Chapter 10: Distribution—Managing Fulfilment Operations ............................................... 55
2.4.1 The Role of Distribution Operations in SCM ...................................................................................... 55
2.4.2: Distribution facility functionality....................................................................................................... 55
2.4.3: Key Distribution Tradeoffs and Challenges ....................................................................................... 56
2.4.4: Distribution Planning and Strategy ................................................................................................... 58
2.4.5: Distribution Execution & Metrics ...................................................................................................... 61
3.1 Chapter 5: Time Value of Money ....................................................................................... 63
3.1.1 The role of time value in finance........................................................................................................ 63
1
, 3.1.2 Single amounts ................................................................................................................................... 64
3.1.3 Annuities (We did not do this in class, and we use tables to calculate) ............................................ 65
3.1.4 Mixed streams .................................................................................................................................... 67
3.1.5: Compounding interest more frequently than annually. ................................................................... 67
3.1.6 Special applications of time value ...................................................................................................... 68
3.2 Chapter 10: Capital Budgeting Techniques......................................................................... 70
3.2.1 Overview of capital budgeting ........................................................................................................... 70
3.2.2 Payback period ................................................................................................................................... 71
3.2.3 Net Present Value .............................................................................................................................. 72
3.2.4 Internal Rate of Return ...................................................................................................................... 73
3.2.5 Comparing NPV and IRR Techniques .................................................................................................. 74
3.3 Chapter 11: Capital Budgeting Cash Flows ......................................................................... 76
3.3.1 Project cash flows .............................................................................................................................. 76
3.3.2 Finding the initial investment ............................................................................................................ 77
3.3.3 Finding the operating cash flows ....................................................................................................... 78
3.3.4 Finding the Terminal Cash Flow ......................................................................................................... 79
3.3.5 Summarizing the Net Cash Flows ....................................................................................................... 79
4.1 Digital Marketing & Sales.................................................................................................. 80
4.1.1 E-Business, E-Commerce, E-Marketing .............................................................................................. 80
4.1.2. Digital Marketing Models/Tools ........................................................................................................ 81
4.1.3 The New Sustainable Marketing Normal ........................................................................................... 85
4.1.4 Digital Involvement Cycle ................................................................................................................... 85
4.1.5 E-Marketing Planning Process ............................................................................................................ 86
4.2 Marketing Week 2 ............................................................................................................ 91
4.2 1 Introduction to Online Analytics ........................................................................................................ 91
4.2.2 Benefits of Online Analytics ............................................................................................................... 91
4.2.3 Benefits of online analytics ................................................................................................................ 94
4.2.4 Google Analytics 360 .......................................................................................................................... 95
4.2.5 Webtrends ......................................................................................................................................... 95
4.2.6 Adobe Analytics .................................................................................................................................. 95
4.2.7 Social Media Analytics ........................................................................................................................ 96
4.3 Marketing Week 3: Integrated Marketing Communications ............................................... 97
4.3.1 Connected Consumers Online ............................................................................................................ 97
4.3.2 Targeting Online Customers ............................................................................................................... 99
4.3.3 Online Offer, Value and Distribution ................................................................................................ 100
4.3.4 Integrated Marketing Communications (IMC) ................................................................................. 105
4.4 Big Data & Cyber Security ............................................................................................... 112
4.4.1 Data sharing policies EU ................................................................................................................... 112
4.4.2. Global privacy laws.......................................................................................................................... 112
4.4.3 Big Data ............................................................................................................................................ 114
4.4.4 Cyber Security .................................................................................................................................. 117
4.4.5 Issues for digital marketers .............................................................................................................. 117
2
, 1. Managerial Accounting
1.1 Chapter 16: Introduction to managerial accounting
1.1.1 Why is managerial accounting important?
Learning objective 1: Define managerial accounting and understand how it is used
Managerial accounting: The process of identifying, measuring, analysing, interpreting, and
communicating information to managers for the pursuit of an organization's goals.
The difference between financial accounting and managerial accounting:
Financial accounting Managerial accounting
Primary users External Internal
Purpose Helps investors and Helps managers and
creditors make decisions employees control
operations
Focus Focusses on the past Focusses on the future
Rules According to GAAP No required rules
Information Based on the company as a Focused on parts of a
whole company
Behavioural Concern about adequacy of Concern about how reports
disclosures; behavioural will affect employee
implications are secondary behaviour
The manager’s role in the organization
Organizational Chart for Smart Touch Learning
Board of directors: Elected by the stockholders and responsible for developing the strategic
goals of a corporation.
Chief Executive Officer (CEO): Officer of a company that has ultimate responsibility for
implementing the company’s short and long-term plans.
3
FIN; M&S
Managerial Accounting, Supply Chain
Management, Financial Accounting, Marketing
Summary of:
Horngren’s Financial & Managerial Accounting: The
Managerial Chapters: Chapter 16, 18, 22 and 23
Principles of Managerial Finance: Chapters 5, 10 and 11
Supply Chain Management: A Logistics Perspective
Chapter 6, 8, 9 and 10
Marketing the slides of off Blackboard
,Table of Contents
1.1 Chapter 16: Introduction to managerial accounting ............................................................. 3
1.1.1 Why is managerial accounting important? .......................................................................................... 3
1.1.2 How are cost classified? ....................................................................................................................... 4
1.1.3 How do manufacturing companies prepare financial statements? ..................................................... 6
1.1.4 What are business trends that are affecting managerial accounting? ................................................ 7
1.1.5 How is managerial accounting used in service and merchandising companies? ................................. 7
1.2 Chapter 22 Master Budget .................................................................................................. 8
1.2.1 Why do managers use budgets? .......................................................................................................... 8
1.2.2 What are the different types of budgets? ............................................................................................ 8
1.2.3 How are operating budgets prepared for a manufacturing company? ............................................... 9
1.2.4 How are financial budgets prepared for a manufacturing company? ............................................... 10
1.2.5 How are operating budgets prepared for a merchandising company? ............................................. 11
1.2.6 How are financial budgets prepared for a merchandising company? ............................................... 11
1.2.7 How can information technology be used in the budgeting process? ............................................... 12
1.3 Chapter 18: Process Costing .............................................................................................. 13
1.3.1 How do costs flow through a process costing system? ...................................................................... 13
1.3.2 What are equivalent units of production, and how are they calculated? ......................................... 14
1.3.3 How is a product cost report prepared for the first department? ..................................................... 14
1.3.4 How is production cost report prepared for subsequent departments? ........................................... 17
1.3.5 How can the production cost report be used to make decisions? ..................................................... 18
1.3.6 How is a production cost report prepared using the FIFO method. .................................................. 19
1.4 Chapter 23: Flexible Budgets and Standard Cost Systems ................................................... 22
1.4.1 How do managers use budgets to control business activities? ......................................................... 22
1.4.2 Why do managers use a standard cost system to control business activities? ................................. 24
1.4.3 How are standard costs used to determine direct materials and direct labor variances? ................ 25
1.4.4 What is the relationship among the product cost variances, and who is responsible for them? ...... 27
2.1 Chapter 6: Producing goods and services........................................................................... 29
2.1.1 Role of Production Operations in SCM............................................................................................... 29
2.1.2 Operations strategy and planning ...................................................................................................... 30
2.1.3 Production Execution Decisions ......................................................................................................... 33
2.1.4 Production metrics ............................................................................................................................. 36
2.2 Chapter 8: Order Management and Customer Service ....................................................... 37
2.2.1 Order management concept & customer service concept ................................................................ 37
2.2.2 Order Management ........................................................................................................................... 38
2.2.3 Customer service ................................................................................................................................ 40
2.2.4 Order Management Influences on Customer Service ........................................................................ 42
2.2.5 Service recovery ................................................................................................................................. 46
2.3 Chapter 9: Managing inventory in the Supply Chain........................................................... 47
2.3.1 Major Types of Inventory and Reasons for Carrying Them ................................................................ 47
2.3.2 Inventory Costs .................................................................................................................................. 47
2.3.3 Approaches to Managing Inventory ................................................................................................... 48
2.3.4 Inventory Classification ...................................................................................................................... 53
2.4 Chapter 10: Distribution—Managing Fulfilment Operations ............................................... 55
2.4.1 The Role of Distribution Operations in SCM ...................................................................................... 55
2.4.2: Distribution facility functionality....................................................................................................... 55
2.4.3: Key Distribution Tradeoffs and Challenges ....................................................................................... 56
2.4.4: Distribution Planning and Strategy ................................................................................................... 58
2.4.5: Distribution Execution & Metrics ...................................................................................................... 61
3.1 Chapter 5: Time Value of Money ....................................................................................... 63
3.1.1 The role of time value in finance........................................................................................................ 63
1
, 3.1.2 Single amounts ................................................................................................................................... 64
3.1.3 Annuities (We did not do this in class, and we use tables to calculate) ............................................ 65
3.1.4 Mixed streams .................................................................................................................................... 67
3.1.5: Compounding interest more frequently than annually. ................................................................... 67
3.1.6 Special applications of time value ...................................................................................................... 68
3.2 Chapter 10: Capital Budgeting Techniques......................................................................... 70
3.2.1 Overview of capital budgeting ........................................................................................................... 70
3.2.2 Payback period ................................................................................................................................... 71
3.2.3 Net Present Value .............................................................................................................................. 72
3.2.4 Internal Rate of Return ...................................................................................................................... 73
3.2.5 Comparing NPV and IRR Techniques .................................................................................................. 74
3.3 Chapter 11: Capital Budgeting Cash Flows ......................................................................... 76
3.3.1 Project cash flows .............................................................................................................................. 76
3.3.2 Finding the initial investment ............................................................................................................ 77
3.3.3 Finding the operating cash flows ....................................................................................................... 78
3.3.4 Finding the Terminal Cash Flow ......................................................................................................... 79
3.3.5 Summarizing the Net Cash Flows ....................................................................................................... 79
4.1 Digital Marketing & Sales.................................................................................................. 80
4.1.1 E-Business, E-Commerce, E-Marketing .............................................................................................. 80
4.1.2. Digital Marketing Models/Tools ........................................................................................................ 81
4.1.3 The New Sustainable Marketing Normal ........................................................................................... 85
4.1.4 Digital Involvement Cycle ................................................................................................................... 85
4.1.5 E-Marketing Planning Process ............................................................................................................ 86
4.2 Marketing Week 2 ............................................................................................................ 91
4.2 1 Introduction to Online Analytics ........................................................................................................ 91
4.2.2 Benefits of Online Analytics ............................................................................................................... 91
4.2.3 Benefits of online analytics ................................................................................................................ 94
4.2.4 Google Analytics 360 .......................................................................................................................... 95
4.2.5 Webtrends ......................................................................................................................................... 95
4.2.6 Adobe Analytics .................................................................................................................................. 95
4.2.7 Social Media Analytics ........................................................................................................................ 96
4.3 Marketing Week 3: Integrated Marketing Communications ............................................... 97
4.3.1 Connected Consumers Online ............................................................................................................ 97
4.3.2 Targeting Online Customers ............................................................................................................... 99
4.3.3 Online Offer, Value and Distribution ................................................................................................ 100
4.3.4 Integrated Marketing Communications (IMC) ................................................................................. 105
4.4 Big Data & Cyber Security ............................................................................................... 112
4.4.1 Data sharing policies EU ................................................................................................................... 112
4.4.2. Global privacy laws.......................................................................................................................... 112
4.4.3 Big Data ............................................................................................................................................ 114
4.4.4 Cyber Security .................................................................................................................................. 117
4.4.5 Issues for digital marketers .............................................................................................................. 117
2
, 1. Managerial Accounting
1.1 Chapter 16: Introduction to managerial accounting
1.1.1 Why is managerial accounting important?
Learning objective 1: Define managerial accounting and understand how it is used
Managerial accounting: The process of identifying, measuring, analysing, interpreting, and
communicating information to managers for the pursuit of an organization's goals.
The difference between financial accounting and managerial accounting:
Financial accounting Managerial accounting
Primary users External Internal
Purpose Helps investors and Helps managers and
creditors make decisions employees control
operations
Focus Focusses on the past Focusses on the future
Rules According to GAAP No required rules
Information Based on the company as a Focused on parts of a
whole company
Behavioural Concern about adequacy of Concern about how reports
disclosures; behavioural will affect employee
implications are secondary behaviour
The manager’s role in the organization
Organizational Chart for Smart Touch Learning
Board of directors: Elected by the stockholders and responsible for developing the strategic
goals of a corporation.
Chief Executive Officer (CEO): Officer of a company that has ultimate responsibility for
implementing the company’s short and long-term plans.
3
