Home » 2018 » April

Monthly Archives: April 2018

Unit 4:MT435: Facility Design.

Click here to order similar paper @Tutoriage.us. 100% Original.Written from scratch by professional writers.

Begin your post with the label: Unit 4: Facility Design.

Research the following topics related to Facility Design:

  1. Capacity
  2. Economy of Scale
  3. Layout
  4. Cycle time
  5. FMS

Select three of the topics listed and compose three paragraphs describing the topics, one paragraph per selected topic, based on the course material and additional research you conduct online.

buy essay online

 

Facility Design Sample paper

Unit 4: Facility Design

Name

Instructor

Course name and number

Date

Capacity

Capacity refers to the maximum output rate or level of a facility or organization. It indicates the maximum units that can be optimally produced given the available resource. Capacity planning is often conducted in order to determine the optimal output rate in a certain facility. Capacity can be divided in two categories namely: design capacity and effective capacity. Design capacity shows the output rate in ideal conditions while the effective capacity shows the maximum output rates under normal or realistic conditions.

Economy of Scale

This refers to the cost advantages that organizations may gain as they increase in size or as their scale of production increases. In most cases, the cost per unit of goods produced falls as the scale increases. The reason for this is that the organization’s fixed costs remain relatively the same with additional units of output. Economies of scale can lead to development of natural monopolies. In natural monopolies, the average costs decline within certain output ranges. The marginal costs in such cases are lower than the average costs. Marginal cost pricing would thus mean that other firms would make losses and hence the need for subsidies in order to beat competition (Dollery & Wallis, 2001).

Cycle time

Cycle time refers to the total time taken to complete a particular process. Cycle time covers the entire duration that the product was being processed to a finished good (Mayer, 2010). Cycle time is inclusive of the entire process time as well as delay time. Lengthy cycle times may be detrimental to the operations of the business. Long cycle times are associated with high costs, increased instability, and disorientation in customers. On the other hand, short cycle times can be a way of improving the quality of service, innovativeness, and a cost improvement strategy. Organizations can achieve fast cycle times by creating multifunctional teams and ensuring the organizational structure supports the teams’ functioning.

 

References

Dollery, B., & Wallis, J. L. (2001). The political economy of the local government. Edward Elgar             Publishing.

Mayer, C. (2010). Fast cycle time: how to align purpose, strategy, and structure for speed. New York, NY: Simon and Schuster.

write research paper

 

Research the following topics related to Service Design:

Click here to order similar paper @Tutoriage.us. 100% Original.Written from scratch by professional writers.

Questions:

Research the following topics related to Service Design:

  1. Specification
  2. Blueprint
  3. Queue
  4. Goods
  5. Phases

Select three of the topics listed and compose three paragraphs describing the topics, one paragraph per selected topic, based on the course material and additional research you conduct online.

Sample paper

 

buy essay online

 

Sample Paper on Product Design

Name

Instructor

Course name and number

Date

Specification generally refers to production requirements. Specification stands for operational or technical requirements that that may either be internal or external (Baxter, 1995). Specification can also be defined as requirements that ought to be satisfied by design, material, or final product. Product specification is related to meeting of requirements that related to design, material, and product. Specification may also relate to the technical standards of a product. The core purpose of a design specification is to anticipate problems or issues that may cause a product to fail and to establish critical design targets that could avert such a failure. A product’s success is determined by four critical things which include: whether the product will sell, whether it will work as expected, when it can be made, and lastly whether it complies with outlined legal obligations.

Blueprint

Blueprint in service design gives a critical look at individuals and their service interactions. Service blueprints are used to give a clear and accurate picture of services. A service blueprint clearly defines and presents the service process to a variety of individuals involved in production as well as consumption. A blueprint helps people to clearly understand the various processes of a service and hence eliminates ambiguity in services. The blueprint serves as a visual depiction of the various roles played by customers as well as the employees. By visually depicting the systematic arrangement of various service touch points, employees are able to better understand the roles they ought to play. The decision theory is often used in establishing a service blueprint (Rama, 2011).

Phases

Phases represent distinct or unique step that is often involved in coming up with a whole product. Products go through various stages or phases during the production process. Each of these phases represent a step towards achieving the final product. In product design and development, there are a total of nine phases which summarize the entire process. The first phase is the idea generation. This is followed by a feasibility study. The third phase is product specifications which is followed by process specifications. The fifth phase involves development of a prototype or samples. The sixth phase is design review where necessary changes are made to a product. This is followed by a market test which is conducted to establish consumer acceptance of the product. This is followed by product introduction and lastly evaluation (Amin, 2011).

 

References

Amin, J. (2011). Phases in product design and development. Retrieved from:             https://www.scribd.com/doc/55941384/Phases-in-Product-Design-and-Development

Baxter, M. (1995). Product Design. Boca Raton: CRC Press.

Rama, M. R. K. (2011). Services marketing. New Delhi: Pearson.

 

write research paper

Research the following topics related to Lean Systems:

Click here to order similar paper @Tutoriage.us. 100% Original.Written from scratch by professional writers.

Research the following topics related to Lean Systems:

  1. JIT
  2. Lean Production
  3. Kanban
  4. Kaizen
  5. Poka-yoke

Select three of the topics listed and compose three paragraphs describing the topics, one paragraph per selected topic, based on the course material and additional research you conduct online.

Sample paper

 

 

buy essay online

Lean Systems

Name

Instructor

Course name and number

Date

JIT

Just-in-time (JIT) is a management philosophy whose origins can be traced to Japan in the 1970s. JIT philosophy establishes six crucial aspects to consider in the manufacturing process. The six aspects are important in improving efficiency and effectiveness in the production process and include: having the right items, having the items at the right quality, right quantity, right place and right time (Cheng, Podolsky, & Jarvis, 1996). The use of the management philosophy is attributed to improved production process. The major areas of improvement include: improved communication, productivity, reduction in costs & wastes, high quality products, and efficiency in production process. JIT philosophy has certain unique characteristics that enables businesses achieve the aforementioned improvements. First, the management philosophy calls for demand driven production. Second, it advocates for the least possible time lapse between receipt of materials, processing, and moving the products to consumers. Third, it ensures minimum raw materials, work-in progress and finished goods levels.

Kaizen

Kaizen is a Japanese management philosophy that calls for daily improvements in the working practices and personal efficiency at the workplace. Kaizen philosophy perceives errors as a scrim overlying innovation and improvement opportunities. Kaizen philosophy is about making continuous improvements at the workplace. In essence, Kaizen philosophy advocates for businesses to always improve things and make them better that they were. There are four principles of Kaizen philosophy which include: continuous improvements, all cooperation in order to make improvements, improvements in every facet of the company & in personal life, and making small continuous improvements to large strategic improvements. Kaizen philosophy also advocates for customer orientation (Takeda & Konradt, 2006).

Poka-Yoke

Poka-Yoke is a lean manufacturing philosophy that calls for mistake proofing in a variety of manufacturing aspects such as procurement, distribution of final products, customer service, and others. This philosophy aims at minimizing chances of error in the production process. In each single production step, errors are significantly minimized, thus improving the entire production process. Poka-yokes refer to the specific mechanisms that a business can employ to avoid errors in each step.
poka-yokes are categorized into two namely: prevention-based methods (warning & control)  and detection-based methods (motion step, fixed value, & contact) (Takeda & Konradt, 2006).

 

 

 

 

 

 

 

 

 

Reference

Cheng, T. C. E., Podolsky, S., & Jarvis, P. (1996). Just-in-time manufacturing: An introduction. London, Angleterre: Chapman and Hall.

Takeda, H., & Konradt, G. (2006). The synchronized production system: Going beyond just-in-    time through Kaizen. London: Kogan page.

 

write research paper

MT435:Quality Management and Lean Systems Sample Paper

Click here to order similar paper @Tutoriage.us. 100% Original.Written from scratch by professional writers.

 

MT435:Quality Management and Lean Systems Sample Paper

Topic : Quality Management and Lean Systems

Name

Instructor

Course name and number

Date

Dimensions of quality

There are a total of eight dimensions of quality which are employed in quality management. The first dimension of quality is performance. Performance concerns the primary operating characteristics of a particular product. The second dimension is features. This refers to the extra characteristics of a product that add to its appeal. The third dimension is known as reliability which refers to dependability of the product in terms of performance. Conformance is the fourth dimension of quality. This refers to the degree to which the product meets outlined standards. The fifth dimension durability which relates to the product life. Serviceability is the next dimension which refers to several aspects of product maintenance. The seventh dimension is aesthetics which refers to the kind of feelings the product evokes upon users. The last dimension of quality is perceived quality which refers to attributable quality of a product by consumers (Griffin, 2015).

Lean Systems

JIT

Just-in-time (JIT) manufacturing system is a management philosophy that originated from the Japan. The management philosophy advocates for six key aspects to consider in the manufacturing process which are crucial in improving production efficiency and effectiveness. The six include: having the right items, and having them at the right quality, quantity, place and time (Cheng, Podolsky, & Jarvis, 1996). The application of the JIT management philosophy is attributed to improved production process. Key areas of improvement include: high quality products; improved communication; efficiency in the production process; productivity; and reduction in costs and wastes. JIT management philosophy was first implemented by the Japanese in manufacturing in the 1970s before spreading to other parts of the world. The philosophy was first implemented by Toyota Manufacturing Company with an aim of eliminating delays to consumers. The development of the JIT management philosophy in Japan is related to the strong work ethics of the Japanese people. For instance, the Japanese are highly motivated, hardworking, loyal to their companies, and are good at team work.

There are a number of cultural characteristics embedded within the JIT management philosophy. First, the philosophy enables organizations to fulfill customer demands or orders irrespective of their numbers. This is possible since JIT philosophy encourages the use of pull system in production. This means that production is based purely on consumer demands. The philosophy ensures the least possible time lapse between the arrival of materials, production, and moving the final product to consumers. JIT emphasizes on efficiency and speed in the production process. JIT ensures that the inventory levels of raw materials, work-in-progress and finished products is kept minimum. Another unique characteristic is that it encourages the use of containers in the production process for holding items. This enables easy monitoring of stock levels. JIT emphasizes that production plants should be kept clean and tidy always. Lastly, the management philosophy encourages the use of clear signals or labels that inform about the equipment status (Cheng, Podolsky, & Jarvis, 1996).

Deming’s research is of immeasurable value to the foundation of quality. His transformative ideas saw the emergence of total quality management Japan. Following World War II, Deming moved to Japan where he helped many companies become globally competitive. Deming’s idea was simple; by improving on quality, he believed that companies would be able to reduce costs and improve their productivity as well as the market share they controlled. The firms that implemented Deming’s ideas such as Fuji, Sony, and Toyota became highly successful globally. These firms produced highly quality products and at low costs compared to their competitors. Studies conducted indicate that the introduction of the quality concept greatly helped firms improve their position. It is important to note that Deming’s ideas applied not only to large businesses but also to small businesses. His ideas also touch on service companies which must provide quality services in order to improve their performance in the competitive business world (Deming, 2013).

The concepts I selected can be very important to my own life and work. The dimensions of quality can enable me provide products or services which are of high quality and that satisfy various attributes that are required by consumers. Businesses that align their production processes to the quality dimensions are more likely to produce products or services that are of high quality and thus gain a large market share. The JIT management philosophy advocates for hard work, high motivation and teamwork in the production process. These can be important values in helping me achieve my dreams which include obtaining good grades and starting my own business. The JIT philosophy can greatly help improve the performance of a business when used. For instance, it can help reduce costs while improving on quality. These are important aspects when it comes to business success.

References

Cheng, T. C. E., Podolsky, S., & Jarvis, P. (1996). Just-in-time manufacturing: An introduction. London, Angleterre: Chapman and Hall.

Deming, W. E. (2013). The essential Deming: Leadership principles from the father of quality.    New York: McGraw-Hill.

Griffin, R. (2015). Fundamentals of Management. Boston: Cengage Learning.

Assignment: Quality Management and Lean Systems Paper

In the modern world, businesses and individuals need to optimize their efforts to gain
effectiveness and efficiency. Also, concepts of sustainability, continuous improvement, and
processes that ensure increased value are considered to track operations management towards
success.
Many of the terms of quality management and lean systems come from Japanese culture and
language, due to Dr. W. Edwards Deming’s research occurring in Japan. Deming is often
referred to as The Father of Quality due to his foundational role in the establishment of Quality
Management.
Examine the business concepts of quality management and lean systems:
Quality Management
1. Dimensions of Quality
2. Cost of Quality
3. Six Sigma
4. ISO
5. Quality tools
Lean Systems
1. JIT
2. Lean Production
3. Kanban
4. Kaizen
5. Poka-yoke
Then, select one concept from each of the lists above and compose your paper to include:
● One aspect of quality management
● One aspect of lean systems
Also, close your paper with the following observations from your research:
 The importance of Deming’s research to the foundation of quality, and what you could do
now, to implement the concepts you selected, to your own life and work.
Complete your work in an APA style paper including:
● APA Cover Page
● APA Content with Indented Paragraphs (3 Full Pages)
● APA Reference Page
● APA Formatted Citations (3 References Minimum)
Directions for Submitting Your Paper
Write your paper in a Microsoft Word document and save it in a location that includes your name and
the title. Submit your paper to the Unit 2: Assignment Dropbox.
Unit 2 [MT435: Operations Management]
Page 2 of 2
MT435 Unit 2 Assignment: Quality Management and Lean Systems Paper
Content (50%) 30 pts. (3 Full Pages of Content)
Points
Possible
Points
Earned
Select one Quality Management concept (select 1 of the 5 items listed) and
discuss its implications to include the findings of your study and research.
10
Select one Lean Systems concept (select 1 of the 5 items listed) and discuss
its implications to include the findings of your study and research.
10
Make observations related to the importance of Deming’s research to the
foundation of quality, and what you could do now, to implement the concepts
you selected, to your own life and work.
10
Analysis (30%) 18 pts.
Work demonstrates synthesis of concepts, research, and experience. 6
Work demonstrates the student’s ability to tie relevant information to real life
applications.
6
Analysis exceeds basic comprehension to demonstrate higher order thinking. 6
Writing (20%) 12 pts.
Correct use of APA 6th edition format, all sources used to support the paper are
referenced, 3 references minimum
4
Sentences are clear, concise, and direct; tone is appropriate 4
Spelling, grammar, and punctuation are correct 4
Total 60

 

Eyeglasses for the Poor’s Internal Controls

Click here to order similar paper @Tutoriage.us. 100% Original.Written from scratch by professional writers.

Week 3 Discussion 2

Internal Controls

Joy Becket is the director of Eyeglasses for the Poor (EP).  EP receives donations of eyeglasses and recycles them for use by the nearsighted needy around the world.  Sometimes the eyeglass frames are expensive designer frames that can be sold to raise operating funds for the organization.  Joy is concerned that EP’s resources are not adequately safeguarded.  This problem is compounded by the fact that there are relatively few employees so separation of duties is difficult.  She does know that if anything goes wrong (i.e. waste of resources, embezzlement), she will be held responsible.  Therefore, she has called you in as an expert consultant in the area of accountability and control.  She has asked you to recommend specific procedures and policies for enhancing the internal controls for the organization.  Write a one-page memo identifying policies and procedures she should consider adopting.

Reference

Finkler, S. A., Purtell, R. M., Calabrese, T. D., & Smith, D. L. (2013). Financial management for public, health, and not-for-profit organizations (4th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

Sample paper

buy essay online

Eyeglasses for the Poor’s Internal Controls

Name

Institution

Course

Date

It is mandatory for every serious organization to have internal control policies and procedures written down to safeguard the organizations interest. Internal controls are well-stated financial management practices which organizations use to prevent misuse and misappropriation of its assets which may occur through theft or embezzlement. Eyeglasses for the poor should put in place a policy that requires more than one person to sign for the receivables from the donors; this will make it very difficult to steal from the organization because if a loss occurs then the signatories will be held accountable. It is also essential to conduct fixed asset inventory annually so as to reconcile the assets on the ground and those in the books which is a good way to keep track of the inventory moving in and those moving out (Finkler et al., 2013).

Management should encourage reporting of any suspected wrongdoing by ensuring that they protect whistleblowers by bringing in legal counsel from outside the organization. There are other employees who will not feel comfortable doing so if they feel that their job will be at risk so it’s the duty of the management to put an anonymous report system to encourage that. A compliance program is another way to prevent theft and embezzlement, having a code of ethics governing the organization and communicate the same to the employees. Having an idea of what is allowed and what is not allowed is a good start for employee’s discipline. Detecting fraud is not an easy task and often entails bringing in experts to do a forensic audit on a regular basis to identify loop holes that might be used to embezzle the organization’s funds (Finkler et al., 2013).  The auditors will also educate both the employees and the management on the best internal control methods. However there are still instances when theft and embezzlement might occur but the above methods will greatly reduce the chances of them happening.

 

References

Finkler, S. A., Purtell, R. M., Calabrese, T. D., & Smith, D. L. (2013). Financial management for             public, health, and not-for-profit organizations (4th ed.). Upper Saddle River, NJ: Pearson             Prentice Hall.

 

write research paper

 

Economic Order Quantity

Click here to order similar paper @Tutoriage.us. 100% Original.Written from scratch by professional writers.

Week 3 Discussion 1

 

Economic Order Quantity

Analyze the following scenario:

Meals for the Homeless buys 30,000 large cans of green beans each year.

The cost of each can of beans is $4.

The cost to place an order for beans, including the time of the employee placing the order, shipping, and so forth, comes to $20 per order.

The out-of-pocket carrying costs (for storage, etc.) are $0.30 per can per year.

In addition, Meals calculates its interest at 5 percent.

How many cans should be ordered at a time?

How many orders should there be each year?

What are the total ordering costs and carrying costs at the EOQ?

Contrast the total of the ordering costs and carrying costs at EOQ to the total ordering and carrying costs if the cans were all ordered at the beginning of the year.  (You will need to read and understand Appendix 7-A to complete this discussion).

Clearly label the calculations of the economic order quantity using an Excel worksheet. Use formulas to calculate the EOQ and format the cells to insert a comma if there is more than three numbers.  Round to the nearest whole number.

Explain the advantages and disadvantages of EOQ in a Word document not to exceed 200 words.

Text Reference

Finkler, S. A., Purtell, R. M., Calabrese, T. D., & Smith, D. L. (2013). Financial management for public, health, and not-for-profit organizations (4th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

—————————–

See below for stated reference Appendix 7-A

Appendix 7-A Economic Order Quantity

As noted in the chapter, in addition to having to pay for inventory when, or shortly after, it is acquired, there are other costs related to inventory. We must have physical space to store it, we may need to pay to insure it, and there are costs related to placing an order and having it shipped. A method called the economic order quantity (EOQ) considers all of these factors in calculating the inventory level at which additional inventory should be ordered.

The more inventory ordered at one time, the sooner we pay for inventory and the greater the costs for things such as inventory storage. These are called carrying or holding costs However, if we keep relatively little inventory on hand, to keep carrying costs low, we will have to order inventory more often. That drives ordering costs up. EOQ balances these two factors to find the optimal amount to order.

There are two categories of carrying costs: capital costs and out-of-pocket costs. The capital cost is the cost related to having paid for inventory, as opposed to using those resources for alternative uses. At a minimum, this is the forgone interest that could have been earned on the money paid for inventory. Out-of-pocket costs are other costs related to holding inventory, including rent on space where inventory is kept, insurance and taxes on the value of inventory, the cost of annual inventory counts, the losses due to obsolescence and date-related expirations, and the costs of damage, loss, and theft.

Ordering costs include the cost of having an employee spend time placing orders, the shipping and handling charges for the orders, and the cost of correcting errors when orders are placed. The more orders, the more errors.

There is an offsetting dynamic in inventory management. The more orders per year, the less inventory that needs to be on hand at any given time, and therefore the lower the carrying cost. However, the more orders per year, the greater the amount the organization spends on placing orders, shipping and handling costs, and error correction. The total costs of inventory are the sum of the amount paid for inventory, plus the carrying costs, plus the ordering costs:

Total Inventory Cost=Purchase Cost+Carrying Cost+Ordering Cost

The goal of inventory management is to minimize this total without reducing the quality of services the organization provides.

We will use TC to stand for the total inventory cost, P to stand for the purchase cost per unit, CC for the total carrying cost, and OC for the total ordering cost. N will stand for the total number of units of inventory ordered for the year. Therefore,

TC=(P×N)+CC+OC

(7.A.1)

We will let C stand for the annual cost to carry one unit of inventory. The annual total carrying cost, CC, is then equal to the carrying cost per unit, C, multiplied by the average number of units on hand. Assume that Q is the number of units of inventory ordered each time an order is placed. On average at any given time we will have Q ÷ 2 units on hand. If we start with Q units and use them until there are 0 units left, on average we will have half of Q units on hand. Carrying costs are determined using the average number of units of inventory on hand. The carrying costs will therefore be as follows:

CC=C×Q2=CQ2

(7.A.2)

That is, the carrying costs per year (CC) will be equal to the carrying costs of one unit (C), multiplied by the average number of units on hand at any given time (Q/2).7

7 This becomes somewhat more complex if a safety stock is kept on hand at all times. In such a case the CC is equal to C multiplied by the sum of Q ÷ 2 plus the safety stock. However, this is not needed for the EOQ calculation. Safety stocks will not affect the economic order quantity, since they are projected to be constantly on hand regardless of the frequency or size of orders.

A formula can also be developed for ordering costs. We will let O stand for the cost of making one order. The total ordering cost, OC, is the cost of making an order, O, times the number of orders per year. Recall that the total number of units needed for the year is N and Q is the number of units in each order. Then N/Q is the number of orders placed per year. The ordering costs are as follows:

OC=O×NQ=ONQ

(7.A.3)

That is, the total cost of placing all orders for the year (OC) is the cost of making one order (O) multiplied by the number of orders per year (N/Q). For instance, suppose that Meals for the Homeless buys 2,000 sacks of rice each year (N = 2,000). If it orders 200 sacks at a time (Q = 200), it would have to make 10 orders per year (N/Q = 2,000/200 = 10).

We now can calculate the purchase cost ofthe inventory, the carrying costs, and the ordering cost. Suppose that Meals pays $2 per sack forrice. Each time it places an order, it takes a paidclerk about $8.075 worth of time to process the order. The delivery cost is $1 per order. This $9.075 is the only ordering cost. Meals could earn 8 percent interest on its money. Therefore, the capital part ofthe carrying cost is $.16 per sack per year (8% × $2 price = $.16). Other carrying costs are determined to be $2.84 per sack per year. Therefore, the total carrying costs are $3 per sack per year. What is the total cost of inventory, assuming that there are 10 orders per year?

TC=(P×N)+CC+OC

(7.A.1)

The first part of the equation to be calculated is the purchase cost of the inventory:

P×N=$2×2,000=$4,000

Next, we need to find the carrying cost:

CCCC=C×Q2=CQ2=$3×2002=$300

(7.A.2)

Finally, we need the ordering cost:

OCOCO×NQ=ONQ=$9.075×2,000200=$90.75

(7.A.3)

So the total costs are as follows:

TCTC=(P×N)+CC+OC=$4,000+$300+$90.75=$4,390.75

(7.A.1)

However, it was arbitrarily decided that there would be 10 orders of 200 sacks each. The EOQ model is designed to determine the optimal number to order at one time. The formula to determine the optimal number to order at one time is as follows:

Q*=2 ONC‾‾‾‾‾‾√

(7.A.4)

where Q* is the optimal amount to order each time.

Q*=2×$9.075×2,000$3‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾‾√=110

This result differs from the 200 sacks per order that we used earlier. If we use this result, how will it affect total costs? The purchase cost will still be $4,000. However, the carrying costs and ordering costs will change:

CCCC=C×Q2=CQ2=$3×1102=$165

(7.A.2)

Finally, we need the ordering cost:

OCOC=O×NQ=ONQ=$9.075×2,000110=$165

(7.A.3)

So, the total costs are as follows:

TCTC=(P×N)+CC+OC=$4,000+$165+$165=$4,330

(7.A.1)

The new total cost of $4,330 represents a cost decrease of $60.75. Relative to the total cost, this may not seem to be a great savings. However, if you put aside the purchase cost of the inventory, the carrying and ordering costs have fallen from $390.75 to $330. This is more than a 15 percent savings. Across all inventory items for an organization, this could amount to a substantial dollar amount of savings.

It is not coincidental that the ordering cost equals the carrying cost. The total cost is minimized at the point where these two costs are exactly the same!

It is important that EOQ calculations only include relevant costs. Carrying and ordering costs that are relevant are those that vary as a result of our EOQ decision. That is, if ordering more or less frequently will affect a cost, it is relevant and should be included in the calculation. For example, ordering less frequently will likely increase capital costs related to interest. It would also likely affect shipping and handling, so these are relevant costs that belong in the calculation. By contrast, the cost of the purchasing department manager will probably not change with the number of orders. Therefore, none of that manager’s salary should be included in the ordering costs.

The basic EOQ model, as presented here, involves making a number of assumptions that are often not true. For example, it involves assuming that any number of units can be purchased. In some cases, an item might only be sold in certain quantities, such as hundreds or dozens. Another assumption is that the price per unit does not change if we order differing numbers of units with each order. It is possible that we might get a quantity discount for large orders. Such a discount could offset some of the higher carrying cost related to large orders.

Another assumption is that we will use up our last unit of an item just when the next shipment arrives. A delay in processing, however, could cause inventory to arrive late, and we might run out of certain items. To avoid negative consequences of such stockouts , we might want to keep a safety stock on hand. How large should that safety stock be? That will depend on how long it takes to get more inventory if we start to run out. It also depends on how serious the consequences of running out are. Is it life or death, or merely an inconvenience?

One of the greatest difficulties in employing EOQ is determining the carrying and ordering costs. In most cases, however, at least the major components of such costs—for example, the amount of labor needed to place an order—can be calculated. The purpose of this discussion of EOQ is to familiarize the reader with the basic concept of inventory management. Many more sophisticated issues, such as those noted here, are addressed in more advanced books on managerial accounting and on operations management. Some of these are included in the list of readings at the end of the chapter.

Inventory models are a part of any efficient management operation that invests dollars in inventory. Public, health, and not-for-profit organizations have often considered their inventories to be of nominal value. However, the costs of ordering and carrying inventory are sometimes surprisingly high, and use of a tool such as EOQ should at least be examined for potential savings.

Key Terms from This Appendix

carrying costs of inventory

Capital costs and out-of pocket costs related to holding inventory. Capital cost represents the lost interest because money is tied up in inventory. Out-of-pocket costs include such expenses as insurance on the value of inventory, annual inspections, and obsolescence of inventory.

economic order quantity (EOQ)

Approach to determine the balance between ordering costs and carrying costs; optimal number of units of inventory to be ordered each time an order is placed.

holding costs

See carrying costs of inventory.

ordering costs

Includes those costs associated with an order of inventory such as clerk time for preparation of a purchase order.


 

stockout costs

Costs incurred when an inventory item is not available but is needed.

 

buy essay online

Economic Order Quantity Sampe paper

Name

Instructor

Course name and number

Date

If the cans were all ordered at the beginning of the year, the total inventory cost would be higher. Total inventory cost for cans ordered periodically adds up to $12, 0774.6 while the total cost of total inventory ordered at the beginning of the year is $15,020.

There are certain benefits as well as drawbacks in using the Economic Order Quantity concept to determine optimal stock levels. One of the benefits of EOQ is that it reduces inventory levels and consequently stock holding costs. EOQ analysis provides business owners with information about the most economical quantity of stock they should purchase. Another benefit of the model is that it is specific to the business and hence of great use to the business. EOQ encourages businesses to purchase stock in large quantities which enables them to obtain large quantity discounts. Lastly, it encourages more efficient production planning since orders follow a similar sequence (Finkler et al., 2013).

On the flip side, EOQ analysis is based on assumptions. For instance, there is the assumption that demand for products is constant throughout the period while in reality, demand for various products keeps fluctuating. The model also assumes fixed stock holding charges, ordering charges, and costs of inventory units. Another drawback is that EOQ is inflexible to consumption patterns. If a review is conducted and then the usage rate changes, the business may run out of stock before the next period. Lastly, reorder quantities may not be entirely correct (Finkler et al., 2013).

 

Reference

Finkler, S. A., Purtell, R. M., Calabrese, T. D., & Smith, D. L. (2013). Financial management for             public, health, and not-for-profit organizations (4th ed.). Upper Saddle River, NJ: Pearson             Prentice Hall.

 

Economic Order Quantity Sample Paper-Tutoriage

 

 

Operation Managment

Click here to order similar paper @Tutoriage.us. 100% Original.Written from scratch by professional writers.

Order Instructions:

1.Dimensions of Quality

2.Cost of Quality

3.Six Sigma

4.ISO

5.Quality tools

 

Select three of the topics listed above and compose three paragraphs describing the topics, one paragraph per selected topic, based on the course material and additional research you conduct online.

Sample paper

buy essay online

Operation Management

Name

Instructor

Course name and number

Date

Dimensions of quality

There are a total of eight dimensions of quality which are employed in quality management. The first dimension of quality is performance. Performance concerns the primary operating characteristics of a particular product. The second dimension is features. This refers to the extra characteristics of a product that add to its appeal. The third dimension is known as reliability which refers to dependability of the product in terms of performance. Conformance is the fourth dimension of quality. This refers to the degree to which the product meets outlined standards. The fifth dimension durability which relates to the product life. Serviceability is the next dimension which refers to several aspects of product maintenance. The seventh dimension is aesthetics which refers to the kind of feelings the product evokes upon users. The last dimension of quality is perceived quality which refers to attributable quality of a product by consumers (Griffin, 2015).

Six Sigma

Six Sigma refers to process improvement that aims for near perfection of products in the manufacturing process. This approach aims at eliminating defects through a structured problem-solving methodology that is data driven. The Six Sigma approach aims at achieving six standard deviations between the closest specification limit and the mean. This means that there should be no more than 3.4 defects per million opportunities in a process. Six Sigma improvement uses five phases of product improvement known as DMAIC (George, 2005). This product improvement system refers to: define, measure, analyze, improve, and control. In development of new products, the Six Sigma DMADV process is employed. This refers to: define, measure, analyze, design, and verify.

ISO

ISO is an acronym for international Organizational for Standardization, the body responsible for developing and publishing international standards. The standards developed by ISO ensure that various products are not only safe for consumption by the public but also to ensure they meet the minimum outlined quality threshold. ISO standards are important in business since they help in cost reduction through cutting on waste and errors, and by generally improving productivity.

References

George, M. L. (2005). The Lean Six Sigma pocket toolbook: A quick reference guide to nearly     100 tools for improving process quality, speed, and complexity. New York, N.Y:            McGraw-Hill.

Griffin, R. (2015). Fundamentals of Management. Boston: Cengage Learning.

write research paper

Investment Decision

Click here to order similar paper @Tutoriage.us. 100% Original.Written from scratch by professional writers.

 

Investment Decision Sample paperInvestment Decision Sample paper

 

Name

Instructor

Course name and number

Date

 

Table 1.1 Excel table showing the NPV and IRR

 

The net present value expected from the investment amounts to $161,816.27. The net present value gives the projected difference in present value of cash inflows, and the expected present value of cash outflows (Maher, Stickney, & Weil, 2012). If the figure of the net present value obtained is positive, then this is an indication that projected earnings associated with a project exceed the projected costs of the same. The net present value concept dictates that firms should only invest in those projects that give positive net present values. From the analysis, Duncombe Village Course should purchase the new equipment since there will be positive returns from the investment. From the analysis, it is possible to determine the profitability index. The profitability index of the investment can be obtained by dividing the obtained figure of the present value of inflows by the initial cost of the investment. From the analysis, the profitability index is 0.13. This means that for every dollar invested in the project yields an additional $0.13 in present value inflows.

It is also important to consider the internal rate of return expected from the project. The internal rate of return (IRR) is defined as the return rate that when applied to a particular project makes the net present value of the cash flows equal to zero (Maher, Stickney, & Weil, 2012). The IRR is also a good measure of profitability. From the excel analysis, the IRR is 14%, using a value of 0.10. The IRR obtained is more than the cost of capital. This means that investment in the project will be profitable. Duncombe Village Course will thus derive benefits from investing the purchase of new equipment.

 

References

Maher, M. W., Stickney, C. P., Weil, R. M. (2012). Managerial accounting: An introduction to    concepts, methods and uses. Boston: Cengage Learning.

 

Week 2  Discussion 2 Investment Decision

Analyze the following scenario:

Duncombe Village Golf Course is considering the purchase of new equipment that will cost $1,200,000 if purchased today and will generate the following cash disbursements and receipts.  Should Duncombe pursue the investment if the cost of capital is 8 percent?  Why?  Clearly label your calculations in your analysis.

Year Cash Receipts Cash Disbursements Net Cash Flow
1 1,000,000 500,000 500,000
2 925,000 475,000 450,000
3 800,000 450,000 350,000
4 750,000 430,000 320,000

 

 

 

 

The calculations must be completed in Excel, and accompanied by a separate 250 word narrative explanation.

 

Text reference:

 

Finkler, S. A., Purtell, R. M., Calabrese, T. D., & Smith, D. L. (2013) Financial management for public, health, and not-for-profit organizations (4th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

 

 

This tasking requires the computation be completed in Excel, and accompanied by a 250 word narrative explanation. Clearly label the calculation. Accordingly, I am paying for two sheets. This must be received not later than May 24, 2016

Public administration-Allocation of Costs

Click here to order similar paper @Tutoriage.us. 100% Original.Written from scratch by professional writers.

 

Week 2

Discussion 1

Allocation of Costs

Analyze the following scenario:

Jump Hospital currently allocates all maintenance  department costs based on departmental square feet.  However, the manager of the pharmacy department has suggested that an ABC approach be used for the portion of the maintenance department costs that relate to repairing equipment.  Her contention is that the pharmacy has relatively little equipment that breaks.  However, it must subsidize many high-tech departments that require expensive equipment repairs.  Using the tables below, calculate the maintenance cost assigned to the pharmacy using the existing method and using an ABC approach.  Clearly label your calculations in your analysis.

Maintenance Costs
Routine Maintenance Repairs Total
Volume (Square Feet) 100,000 800
Labor Hours 10,000 4000 14,000
Labor Cost/Hour $12.00 $18.00 $13.71
Supplies $20,000 $80,000 $100,000
Administration $15,000

 

 

Department Information
Pharmacy All Other Departments Total
Square Feet 2,000 98,000 100,000
Volume of Repairs 3 797 800
Hours of Repairs 6 3,994 4,000
Supplies Used for Repairs $200 $79,800 $80,000

 

 

 

The calculations must be completed in Excel, and accompanied by a separate 250 word narrative explanation.

 

Text reference:

 

Finkler, S. A., Purtell, R. M., Calabrese, T. D., & Smith, D. L. (2013) Financial management for public, health, and not-for-profit organizations (4th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

Sample paper

PUBLIC ADMINISTRATION

Students Name

Institution Affiliation

 

According to Isai, V. et al. (2014), cost allocation refers to the assignment of a shared cost to numerous cost objects. The cost allocation or spreading the cost can range from departmental rates to plant-wide rates, from machine hours to direct labor hours. Lastly, the allocation of costs can use activity based costing as a method of spreading the costs. According to Finkler, S. A. et al. (2013), The Activity Based Approach (ABC) allocates manufacturing overheads in a more logical manner compared to the traditional approach. The main objective of the cost allocation is to assign the costs based on the root causes of the mutual costs instead of simply disseminating the costs.

Jump Hospital presently apportions all maintenance department costs on the basis of departmental square feet.  However, there is a suggestion by the manager of the pharmacy department to use the ABC approach for the apportionment of the maintenance department costs relating to the repairing of the equipment (Hughes, M. 2016).  Her argument is that the pharmacy has comparatively diminutive paraphernalia that breaks.  Nevertheless, it must endow many advanced departments that necessitate exclusive equipment repairs.  This paper calculates the maintenance cost allocated to the pharmacy using the existing or traditional method and using an ABC approach.

In the traditional approach, Jump Hospital allocates costs on departmental square feet. The total overheads amounts to $ 115, 000 and its total allocation to the pharmacy department is $2,300. However, the proposal to change to an ABC approach that allocates costs on repairing of equipment will raise the allocation to $ 2,875. The excel sheet shows the calculations using both the methods.

 

References

Finkler, S. A., Purtell, R. M., Calabrese, T. D., & Smith, D. L. (2013) Financial management for public, health, and not-for-profit organizations (4th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.

Hughes, M. (2016). The Simple Analytics of Matrix Accounting, Activity‐Based Costing, and Linear Programming. Journal of Corporate Accounting & Finance, 27(3), 31-37.

Isai, V., Radu, R. I., & Ionescu, C. (2014). A Study on the ABC Approach in Cost Management Practice. Risk in Contemporary Economy, 346-351.

 

Traditional Methods
Maintenance Overheads
Supplies 100,000
Administration 15,000
Total Overheads 115,000
Supplies Allocation 2,000/100,000*100,000 2,000
Administration Cost Allocation 2,000/100,000*15,000 300
Total Allocation 2,300
ABC Approach
Maintenance Overheads
Supplies 100,000
Administration 15,000
Total Overheads 115,000
Supplies Allocation 2,000/80,000*100000 2,500
Administration Cost Allocation 2,000/80,000*15,000 375
Total Allocation 2,875

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research Paper-Control management of public expenditure

Click here to order similar paper @Tutoriage.us. 100% Original.Written from scratch by professional writers.

Research Paper

The major written assignment for the course is a Research Paper.  This paper should demonstrate understanding of the reading as well as the implications of new knowledge.  The 20-page paper should integrate readings and class discussions into work and life experiences.  It may include explanation and examples from previous experiences as well as implications for future applications.

The purpose of the Research Paper is for you to culminate the learning achieved in the course by describing your understanding and application of knowledge in the field of accounting.  The Research Paper will contribute 25% to the course grade.

Focus of the Research Paper
Complete and submit your choice of one of the listed assignments.  Select one of the following choices:

  • Choice one – Your role is as a public official elected at the local city level, 50,000 to 250,000 population.  After reviewing the course concepts you will identify several issues that directly connect to the written assignment.  In addition to reading the assigned text materials to develop knowledge about the concepts, a thorough master’s level education requires the development of effective research skills.  In this assignment you will work to develop a rich resource of academic sources to support your paper.

Prepare a 20-page double spaced paper (excluding the title and reference pages) on the following topic:

You have a $10 million dollar budget allocated to you by the city manager and can get up to 100% matching federal funds if you meet the federal standards.  You have been asked by the mayor to determine how to allocate the budget to best support the needs of the city.  These  include but are not be limited to supporting capital requirements, operational requirements, and subsidizing non-profit organizations or used as economic incentives to bring new private concerns into the city.

Prepare a report for the mayor and city council on your proposed expenditure plan assessing the key course objectives including fund accounting and financial controls, control and management of public expenditures, government financial reporting requirements, analyzing financial statements and budgets to make appropriate administrative decisions, and applying budgets as disciplinary process.


 

  • Choice two – your role is as a consultant with ten years experience in the public financial management industry.  After reviewing the course concepts you will identify several issues that directly connect to the written assignment.  In addition to reading the assigned text materials to develop knowledge about the concepts, a thorough master’s level education requires the development of effective research skills.  In this assignment you will work to develop a rich resource of academic sources to support your paper.

Prepare a 20-page double-spaced paper (excluding the title and reference pages) on the following topic:

You are in the role of a consultant with ten years experience in the public financial management industry.  A group of 20 civic leaders are considering forming a new task force and have asked you to prepare a proposal on whether they should build a facility in an area within 30 miles of the downtown center of your 500,000 population city for $100 million dollars.

Prepare a report for the mayor and city council on your proposed expenditure plan assessing the key course objectives including fund accounting and financial controls, control and management of public expenditures, government financial reporting requirements, analyzing financial statements and budgets to make appropriate administrative decisions, and applying budgets as disciplinary process.

  • Choice three – your role is as the chief operating officer of a large non-profit hospital or agency with ten years experience in the public financial management industry.  After reviewing the course concepts you will identify several issues that directly connect to the written assignment.  In addition to reading the assigned text materials to develop knowledge about the concepts, a thorough master’s level education requires the development of effective research skills.  In this assignment you will work to develop a rich resource of academic sources to support your paper.

Prepare a 20-page double-spaced paper (excluding the title and reference pages) on the following topic.

You are in the role of a chief operating officer.  A board of directors has requested that you prepare a summary of the issues involved in a $50 million expansion.  Because of local political and uncertain national financial policy of the to-be-elected national officials they may have to scale the expansion back to $25 million.

Prepare a report for the mayor and city council on your proposed expenditure plan assessing the key course objectives including fund accounting and financial controls, control and management of public expenditures, government financial reporting requirements, analyzing financial statements and budgets to make appropriate administrative decisions, and applying budgets as disciplinary process.


 

  • Choice four – your role is as the chief operating officer of a large government agency with ten years experience in the public financial management industry.  After reviewing the course concepts you will identify several issues that directly connect to the written assignment.  In addition to reading the assigned text materials to develop knowledge about the concepts, a through master’s level education requires the development of effective research skills.  In this assignment you will work to develop a rich resource of academic sources to support your paper.

Prepare a 20-page double-spaced paper (excluding the title and reference pages) on the following topic.

You are in the role of a chief operating officer of a large government agency.  Your supervisors have requested that you prepare a summary of the issues involved in a potential reduction in U. S. Federal budget that will affect your agency by 40%.

Prepare a report for the mayor and city council on your proposed expenditure plan assessing the key course objectives including fund accounting and financial controls, control and management of public expenditures, government financial reporting requirements, analyzing financial statements and budgets to make appropriate administrative decisions, and applying budgets as disciplinary process.

  • Choice five – your role is as the chief administrative officer of a large non-profit health relief organization.  After reviewing the course concepts you will identify several issues that directly connect to the written assignment.  In addition to reading the assigned text materials to develop knowledge about the concepts, a thorough master’s level education requires the development of effective research skills.  In this assignment you will work to develop a rich resource of academic sources to support your paper.

Prepare a 20-page double-spaced paper (excluding the title and reference pages) on the following topic.

You are in the role of a chief administrative officer for a large non-profit health relief organization.  A board of directors has requested that you prepare a summary of the issues about how to solve the health needs of an African country.  Your organization has limited funding and will need to obtain subsidized medicine from major pharmaceutical companies.  They also have the opportunity to get non-generic, non USDA approved, alternative stem cell derived medication from foreign sources.

Prepare a report for the mayor and city council on your proposed expenditure plan assessing the key course objectives including fund accounting and financial controls, control and management of public expenditures, government financial reporting requirements, analyzing financial statements and budgets to make appropriate administrative decisions, and applying budgets as disciplinary process.

Finkler, S. A., Purtell, R. M., Calabrese, T. D., & Smith, D. L. (2013). Financial management for public, health, and not-for-profit organizations (4th ed.).

Upper Saddle River, NJ: Pearson Prentice Hall.

Sample Paper

Public Financial Management

Name

Instructor

Course name and number

Date

Public officials play a critical role in budget allocations. The main aim of a public official is to allocate available funds in a manner such that the general public receives the greatest benefits from the application of the funds. The public sector must ensure that scarce resources are allocated in a manner that optimizes their usefulness. It is imperative for public officials to take into consideration the preferences of the local citizens while making budget allocation decisions. In order for growth to be achieved at the local city levels, fiscal resources must be managed in a prudent manner so as to support market-led growth. Budget allocation plans should satisfy three key elements: responsiveness, responsibility, and accountability. Responsiveness of budgets relates to the level in which the allocation of budgets matches the publics’ expectations. Responsibility is achieved when budget allocation is conducted in an efficient and equitable manner, with minimal risks being involved. Accountability relates to the level in which public officials can be made to account for every resource spent for public use.

Budget allocation calls for greater scrutiny in the application of public funds to minimize incidences of fraud and improve accountability in the public sector (Quah, 2016). Independent evaluations are often conducted across many states to ensure that public funds are used objectively and in a manner that maximizes public benefit. Developing countries are often faced with accountability issues in allocation of public funds. Due to the endemic corruption in the developing countries, there is need for public sector reforms that can help ensure public funds are used for the benefit of the greater public. In the U.S., there is greater accountability in allocation of public funds due to a number of reforms that were implemented in the public sector. This paper provides a detailed report of the best way in which $10 million dollar budget can be allocated to best support the needs of a city with a population of about 250,000 residents.

The proposed expenditure plan for the local city level place more emphasis on supporting the core services required by the citizens. The core services in the city include: enhancing the public safety, maintenance of the general physical infrastructure, infrastructure, improvement of transport and communication facilities, and lastly enhancing investment in the region. This proposed expenditure plan is based on the policy of fiscal prudence which advocates for careful utilization of public funds. Fiscal prudence is of great importance since it will ensure that the available resources will adequately be utilized to cater for the main mission as well as to support other critical financial undertakings. In the management of public funds, it is necessarily to exercise caution especially in relation to public debt. Credit limit establishes the maximum amount of debt financing that the city can take. The proposed expenditure plan is $10 million dollars, with the possibility of an additional 100% matching federal funds.

The sample budget allocation covers capital requirements of the city, operational requirements, and subsidization of non-profit organizations.  The operating budget will comprise about 60% of the entire budget allocations, while capital requirements and economic incentives will take about 40% of the entire budget. The following is a simple budget overview showing the operating budget and the capital improvements budget to be applied in the city. This budget preparation assumes that the public officials will satisfy all the federal requirements and thus access 100% additional federal funds.

Table 1.1 Total Budget Program Allocations for the City

Total Budget Program
Operating Budget Requirements $12,000,000
Capital Improvements budget $8,000,000
Total Budget Allocations $20,000,000

 

This budget is prepared in accordance to the city’s long-term strategic plan of ensuring that it achieves financial sustainability and most importantly growth.

The operational requirements are divided into a number of subsections. The following table shows the structured operating budget allocations for the city.

Table 1.2 Operational requirements budget summary.

Operational requirements budget summary
General or common fund $5,066,493
Revenue Funds

Transport and Communication Sector

Performing arts

Transit

Housing sector

Donation funds

 

$273,833

$245,038

$1,510,324

$430,296

$611,729

Debt Servicing $784543
Internal Service budget $54,000
Enterprise funds

Solid waste management

Water services

Sports development

Parks and other facilities

 

$492,449

$2,462,351

$75,793

$699240

Total Budget Allocation $12,000000

 

The general fund comprise of the mayor’s appropriations for the various positions in the city. These appropriations are used to cater for salaries and wages of various staff working at the local city level. Some of these positions include court interpreters, clerks, program analysts, staffing for capital improvements, library staffing, code inspectors, fire inspectors, and other positions directly under the local city authority. There are a number of departments attached to the general fund which include City Clerk, City Attorney, City Manager, Community Development, Internal Services, Community Services, and City Court department. The General Fund will create additional employment opportunities. It is estimated that about 30 permanent positions will be created and about 20 temporary positions. This will also stimulate the creation of indirect employment opportunities.

Capital requirements budget summary

The following table shows the capital requirements budget summary that will be used in the proposed expenditure plan.

Table 1.3 Capital requirements budget summary

Capital Requirements Budget Summary
Enterprise program funds

Water

Sports

Sewerage

 

$1,823,810

$115,445

$550,777

Special purpose programs

Transit

 

$1,534,309

General purpose programs

Drainage development

Improvement of parks

Fire medical rescue

General governmental

 

$46,275

$2,454,337

$140,812

$701237

Transportation department

Street lighting installation

Others

 

$128,545

$504,453

Total $8000,000

 

The capital requirements budget summary addresses the city’s critical infrastructure needs. Funding for the capital budget is derived from a number of sources which include: general obligation bonds, supported bonds, grants and donations, and special revenues. As earlier mentioned, it is important to take into consideration the debt limits especially when financing through issuance of government bonds. This is because issuance of bonds has a significant impact on interest rates and the general performance of the economy. The city’s debt limit levels can safely be determined by using the limited property value. This involves the use of an established formula to determine the value of a particular property and consequently the applicable tax rates.

The Capital Budget primarily comprises of the city’s major projects that are in progress and meant for enhancing public safety, health, and maintenance of key assets. The budget will thus cater for a variety of projects such as infrastructural developments, improving the emergency services department by acquiring modern equipment, improvement of communication facilities, development of pars, road development, and among other projects. The city’s annual budget can be appropriated depending on the various categories of major expenses. The following chart shows the sample budget allocation plan based on expenditure type.
Project Summary

 

Fig. 1.1 Budget Appropriations based on Expenditure type

From the above chart, it is possible to see how the budget will be allocated to cover various critical expenses. The personnel costs comprise of the largest share of the total budget. Personnel costs are those associated with payment of wages, salaries and other benefits for all employees who are under the city’s payroll. Expenditure in capital projects is the second largest in the budget proposal, comprising of 28% of the total budget. The services sector/supplies will also cost a substantial portion of the entire budget, with 22% of the total budget going towards service provision. Another important consideration in the proposed expenditure plan is debt servicing. It is proposed that 14% of the total budget go to towards debt repayment. Debt servicing is important for the local city. It will help in securing more debts in future since the city will gain a positive reputation by reducing its debt levels. Countries as well as international financial institutions are more willing to lend to states that have good debt repayment history.

The City’s Overall Financial Assessment

Over the years, the city has employed sound financial management policies that have enhanced its strong financial standing. This has mainly been through the use of appropriate fiscal policies that encourage controlled spending and maximum savings. The financial sustainability of the expenditure plan decisions are assessed based on five-year financial forecasts. Financial forecasts should be updated yearly so as to reflect the current economic trends. A variety of sources, both internal and external, should be used in making the financial projections and models. Financial forecasts are important since they provide policy makers with a long-term view of how current decisions will affect its future potential to sustain itself financially. The financial forecasts are thus a key pillar in ensuring financial stability of the city in the long-run.

There are a number of indicators that can give policymakers clues concerning the financial strengths of the city. First, fund balances can be used to determine the city’s financial potentials. Fund balances related to the unassigned revenues in the general fund. The financial reserves held by the city can also be a good indicator of its financial strength. The financial reserves represent the share of revenues that the city has in stock and can use especially during emergency needs. Bond ratings are also used as indicators of financial strength. There are various international financial organizations that provide details on bond ratings such as Standard & Poor and Moody. High bond ratings can significantly reduce interest rates pegged on the city’s debt (Brigham, & Ehrhardt, 2008). The city’s debt management plan can also be used as an indicator of its financial strength. It is important to establish sound debt management practices so as to build a strong positive debt portfolio. Lastly, the development activities of the city can be used as a measure of its financial strength. High development activities are an indication good financial strength.

Control & management of public expenditure

It is of great significance for the city to establish control measures and sound management practices of public expenditure. Control & management of public expenditure ensures that the budget is consistent with current macroeconomic constraints (“International Monetary Fund” (n.d)). The budget preparation process is a critical process that involves careful execution of duties by various organizations involved in the budget preparation process. The principles of budget are used to checking the use of public expenditure in the public domain. There are a number of basic principles that guide the budget allocation process. The principles state that budget allocation should have the following core characteristics: it should be realistic, comprehensive, transparent, policy-oriented, and the entire budget process should show accountability especially in relation to budget execution.

Comprehensiveness of the budget process relates to whether gross estimates are applied and the completeness of government operations. Transparency relates to whether the budget process satisfies all outlined national and international standards. The realisms element assesses whether the budget is hedged on a robust macroeconomic framework. The element also looks at the applicability of the financing provisions made. There are three critical characteristics of an effective budget process. These include unity, annuality, and universality. Unity of the budget system means that revenues and expenditures are used together in establishing yearly budget estimates. Annuality of budgets relates to the period covered by the budget (“OECD,” 2004). Budget preparation is an annual process, including its execution. Universality of the budget process involves the manner in which resources are allocated. Available resources should be used for a common purpose rather than for specific purpose.

Responsibility in budget control and management

It is important to outline responsibility in the budget preparation process. At the local city level, the finance department should be charged with developing the budget. However, this may differ between countries or states.  In virtually all nations including the developed nations, authorities face a daunting task in ensuring accountability relating to the control and management of public expenditures. A weak accounting framework is one of the major reasons why most countries face challenges in maintaining accountability relating to the control and management of public expenditure. Accountability is critical to accumulating wealth and establishing successful economy (Oyeriende & Iyoha, 2010). In most countries, presence of laws or anti-corruption agencies may not deter individuals from embezzling public funds. However, it is only a robust accounting framework that can help ensure accountability in the control and management of public expenditure.

Ways in which the local city can improve on public expenditure management

The local city can improve on public expenditure management by conducting internal and external audits. Traditionally, authorities were content with internal audits. However, the internal checks can easily become subverted. Independent analysis of public expenditure is thus critical in ensuring accountability in the control and management of public expenditure. Most local governments have realized the need to control public expenditure and establish accountability in the sector. The second way in which local governments can improve on public expenditure management involves establishing a sound institutional framework. In public expenditure management, there should be clearly outlined principles that guide the budget process. The constitution should enumerate a list of laws that ought to be followed. In addition, there should be a balance between the executive and legislative powers. Power legislative bodies such as the parliament should have the legal jurisdiction to scrutinize the budget allocation process.

There should also be a clearly defined budget process. The budget preparation process follows a sequel of steps that gives policymakers time to evaluate each step and whether the milestones in each of the step has been accomplished before proceeding to the next step. The procedures used in the budget preparation process should be integrated to ensure a smooth budget process. During the budget preparation process, constraints should be clearly outlined and included in a report. The draft budget should be present to a legal body with the appropriate mandate to scrutinize it well. According to (Allen & Tommasi, 2001), the draft budget should include an outline of the fiscal policy objectives identified by the government, budget policies, macroeconomic framework, and an analysis of the key fiscal risks that may impact its implementation.

It is important to take into consideration the budget execution and monitoring process as a way to improving the control and management of public expenditure. A legally established body with higher authority such as parliament of finance ministry should be charged with monitoring the budget to ensure that it does not go beyond normal limits. There should be sound systems for checking personnel expenditures as well as the budget allocations. Comparisons should be made between actual spending and budget forecasts to ensure that they are in line. Public expenditure management should also involve financial control strategies. There are a number of procedures that are critical in ensuring sound internal control. These include: financial reporting standards, clear audit trail, well-defined procurement procedures, and a modern accounting system. Having an effective procurement process is a major step towards ensuring accountability in the budget process. Procurement practices can be improved through implementing a sound legislative framework, developing efficient complaints procedures, and through establishing an organization responsible for streamlining the procurement process in a country.

Government Financial Reporting Requirements

Government financial reporting can be defined as the process whereby financial information relating to performance is recorded in a specified manner for accountability purposes. Local authorities which follow the laid down financial reporting requirements are more accountable in their actions. It is also easier for policymakers to utilize the financial reports for the purpose of planning and policy formulation. The government requires multiple reports in relation to the budget process. The major purpose of these reports is to enhance accountability in relation to the way local governments make use of public funds. The Budget and Accounting Procedures Act formulated in 1990 was the first attempt by the Federal Government to enhance accountability through provision of budget reports and other information. The act required various executive agencies to issue budget reports to the Treasury Secretary.

Federal financial reporting objectives

The Federal Accounting Standards Advisory Board (FASAB) outlines four key objectives in relation to federal financial reporting. The four include: stewardship, budgetary integrity, systems & control, and operating performance (Hatch, 2013). All financial reports prepared should satisfy the four aforementioned objectives. In satisfying budgetary integrity requirements, the financial report should include detailed information concerning the manner in which budgetary resources were acquired and how they were used. In other words, there should be clearly defined revenue sources along with amounts obtained and expenses incurred. The stewardship objective involves giving a report about the financial position of the government. In this case, it involves giving a report about the local government’s financial position. The stewardship objective will require the local government to declare the kind of economic resources it has the claims against them. This is simply the financial health of the local entity, along with future prospective. The stewardship objective thus provides policymakers with a future outlook with regard to sustainability of resources (Hatch, 2013).

The other objective is operating performance which provides details about program accomplishments. A federal financial report should provide details about accomplishments made, activity or program costs, and general information about sustainability of funds (Hatch, 2013). For example, a statement of net cost can be used to indicate the actual costs of operations in the budget process. Systems and control is another important federal financial reporting objective. This objective makes a recommendation that the financial reports should enable users to determine if all the necessary financial reporting standards and controls were observed. As per this objective, users should also be able to know whether other federal financial reporting standards were followed to the latter. Systems and control reports objective can be achieved by giving details on the internal controls employed in the budget process.

Financial reporting standards and requirements are currently regulated by congress through three statutes namely: Accountability of Tax Dollars Act of 2002, Government Management Reform Act (GMRA) of 2002, and Chief Financial Officers Act (CFO Act) of 1990 (Hatch, 2013). The CFO Act of 1990 is extremely important in proving guidelines for government financial reporting standards and procedures. The act requires relevant authorities to submit audited financial statement, provides a legal framework for leadership structures, devises long-term planning, and improves accountability reporting protocols. The GMRA act aims at introducing reforms in the running of the Federal government by evaluation of the current financial management practices and human resource planning. ATDA act of 2002 was meant to strengthen the CFO Act such that it could cater to multiple branch agencies. The Government Accounting Standards Board (GASB) is legally mandated to outline principles governing accounting and financial reporting systems.

Local city budget policies

A number of policies will be observed in budget allocation by the local level city authorities. These policies reflect the goals and objectives that are meant to be achieved in the application of the budget. Strong policies provide a framework for comparison between current budgetary performance and the proposed budget.

  • In the operating budget, current revenue will be used to support current expenditure. In a situation where the current operating expenditures exceed the current revenue, the general fund balance can be used to bridge the gap, provided that all the necessary policies are observed.
  • Projections for revenue and expenditure are to be conducted biannually over a period of five years.
  • Financial systems will be used to measure expenditures and to evaluate the program performance.
  • Current operations will not be financed using the current portion of long-term debt.
  • Capital projects that are bonds supported will not go beyond the useful life of the bonds that support them.
  • The city must keep maintaining its physical assets on a regular basis to avoid high cost in future.
  • The city will channel 25 percent of the current revenue towards retained earnings.
  • The city’s accounting and financial reporting will be conducted in accordance to GASB policy framework.

Analyzing financial statements & budgets to make appropriate administrative decisions

As a policymaker, it is imperative to conduct researches on various economic aspects in order to make appropriate decisions concerning the budget allocations or expenditure plan. It is important to analyze financial statements and budgets in order to reach conclusive decisions. The analysis may take various forms such as fiscal analysis, policy evaluation, or a combination of fiscal & policy analysis. A fiscal analysis concentrates on establishing fiscal issues such as federal legislation, regulations, initiatives, and other reports. It is also important to perform a policy analysis in order to make appropriate administrative decisions. A policy analysis enables individuals to make informed decisions in regard to government regulations and programs. Policy analysis is important since it helps decision makers to analyze the impacts of a particular policy to the public or organizations. Lastly, policymakers can perform a combination of policy and fiscal analysis in order to make appropriate administration decisions.

There are specific steps that policymakers should use in analyzing financial statements and budgets. Six basic steps can be used helping policymakers come up with appropriate administrative decisions. The first step is to clearly define the problem or need. In this step, policymakers should thoroughly assess the magnitude of the problem by conducting a quantitative analysis of the issue. It is also important to determine the extent of the problem or the population affected by the problem. The second step involves gathering information relating to the specific problem. In situations where policymakers are unable to obtain particular information, they may make assumptions based on historical or comparative data. It is important to test data in order to verify its accuracy. The third step involves analyzing the various alternatives available. There might be various options available to a policymaker with regard to particular problems or issues at hand. For instance, the local government may have various options in case of a deficit budget such as raising taxes, borrowing funds, relying on donations, creating incentives, and among other options.

The next step in analyzing financial statements and budgets involves establishing the criteria for determining the best alternatives. Various criteria may be used such as feasibility, efficiency, uncertainty & risks involved, effectiveness, consistency to expectations, and the outlined priorities. Once a criteria has been established, the policymaker should evaluate the available alternatives by weighing each of them against predetermined measures.  The final step involves making a recommendation about the best alternative. In this step, the policymaker combines all the gathered information and tries to draw conclusions based on the results. Policymakers should be creative in developing a viable solution to the problem. The policymaker should take into consideration the existing administration’s ideas and opinions and include at least one of them as a viable solution. The policymaker should provide more than one recommendations to enable the administration consider a set of different alternatives.

Applying budgets as a disciplinary process

The budget system should be time-efficient and provide maximum gains. Various local authority officials should develop estimates of the amount the appropriate amounts that can be adequately used to fund their programs or organizations. The local government should conduct annual analysis of expenditure needs instead of relying on previous year spending. This is mostly because priorities may change or new needs may emerge which impact the way budget allocations are made. The city authorities should be able to account for every money spent. The city should use advanced accounting systems that can help in eliminating overheads and inefficiencies in the entire budget allocation process. Many local governments lack mechanisms for keeping track of all costs that they incur. The lack of a sound budgeting and accounting system may lower the quality of the budget process and lead to high inefficiencies in the entire process. Budget committees are vital in the budget implementation process. The caliber of employees working in these committees greatly determine its effectiveness.

There are four ways in which budget committees can enhance the effectiveness of the budget process. First, there is need for biennial budgeting. This involves allowing the budget cycle to run for a period of two years, in contrast to the yearly budget cycles that are common in most parts of the world. Extending the period may be of benefit since it gives more room to budget committees to manage resources. In the annual budget cycles, the budget committees spend a lot of time in planning and implementation of the annual budget cycle. The second step in to adopt standard capital budgeting and cost accounting techniques. These techniques are important because they give more clarity on overheads, expenses and costs. Majority of local city authorities lack the relevant tools that can enable them keep track of indirect overhead costs. Activity-based techniques can be useful in assessing the entire cost of various programs.

The next method is to encourage those in charge of fund administration to ensure efficiency by use of rewards. Altering the incentive structures in place can help fund administrators focus more on achieving efficiencies in fund administration. The last method is to restructure the budget process and make it simple. The budget process has remained the same for over four decades. The current budget process is dogged by complexities in the system, particularly in the manner in which it is administered. There are numerous committees with overlapping duties and responsibilities which creates confusion. Restructuring the budget process can therefore be of great benefit and save on costs.

The budget process

The budget process is a critical process in ensuring that budget allocation takes place effectively. Budget preparation is importance since it gives department room for reassessing their goals or objectives and the strategies for achieving them. There are a number of phases employed in the budget preparation process.

  • Policy phase – This is the first phase of the budget preparation process. This phase is guided by the goals and objectives of the council. These act as the directives that establish the tone to be followed. Various departments discuss their needs and forward these to the relevant individuals (In Cruz-Cunha et al., 2014).
  • Financial capacity stage – This is the second phase in the process. The financial capacity phase entails forecasting as part of the decision making process. In this phase, short-term and long-term projections are made. Financial projections are then prepared covering each major fund to be applied. These forecasts cover a period of five years. Those involved in the budget preparation process may then examine a number of different scenarios that may have an impact on each of the funds.
  • Outreach phase – This involves a series of meetings that are conducted by the policymakers to discuss the overall goals and objectives in relation to the city. A number of items may be discussed during the meetings such as timelines, available resources for allocation, budget guidelines, and fiscal constraints.
  • Assessment of needs – this is the next stage in the budget implementation process. In this stage, different departments assess their programs, needs and the current micro and macroeconomic conditions. In this phase, the departments carefully scrutinize their ongoing programs in order to find areas of improvement or recommend for elimination.
  • Development phase – this phase involves the review of budget requests from various departments, financial capacity of the city, manager priorities, and departmental needs evaluation. A preliminary budget is then developed.
  • Implementation phase – this is the final phase of the budget process. The proposed budget is submitted to the relevant authority which is often the council (In Cruz-Cunha et al., 2014).

 

Comprehensive Budget Plan for the operational budget

Major Assumptions

The general fund is expected to reduce following a $201,300 deficit occasioned by discontinuation of a temporary sales tax. The deficit will reduce with time since the economy is expected to grow steadily over the five year period. The transit fund is expected to remain relatively stable in the first few years. From 2018, a deficit may be experienced due to high expenditures to be incurred in the improvement of parking in the city. The sports development fund may experience a $ 25,278 deficit in the middle of the five year forecast. This deficit will be occasioned by a cut in debt service costs. The water/sewerage fund is expected to remain relatively the same over the five year period, experiencing small surpluses towards the end of the period. This is because of the low population growth in the city hence fewer new connections. The population growth in the city is 0.2% which indicates a low population increase. Population growth helps in revenue projections from various sources such as social services and recreation. Population also impacts shared revenue calculations (Burchell & Listokin, 2012).

City revenues are projected to increase over the coming years. The growth in revenues will largely be driven by an increase in state sales tax. High revenues will also be driven by growth in the tourism sector. The development sector is experiencing a resurgence in activities from the recent economic recession. Construction has increased remarkably and is expected to maintain growth over the coming period. According to Baker (2016), spending in hotel construction in the U.S. increased by 13 percent in 2015 , while that in construction of office blocks went up by 15 percent. A 3% growth in institutional development was also achieved. Growth in the commercial and residential sectors is expected to rise in the coming period. In the fringe benefits sector, health insurance costs are projected to rise in the next five year period. The high insurance costs will be driven by a greater maturity in the workforce and a high number of retiring employees. Inflation rate will remain stable due to a relatively stable economy.

Strategic priority of policymakers and the city council

Policymakers and the city council are working with an aim to fulfill five key strategic priorities. These priorities include: enhancing the safety and security of all citizens; improving the quality of life of all residents, creating strong community links and connections; ensuring long-term sustainable growth and development; and maintaining robust financial stability of the region in the long-run. The following chart shows the council’s strategic priorities in order of their relevance.

A large portion of the budget will be spent in enhancing the quality of life of the local citizens. This portion of budget will be used to improve core infrastructural amenities. This is part of the asset maintenance efforts by the city. This budget will cover things such as streets maintenance, water, parks, and other capital programs. The key objective is to improve all the neighborhoods and ensure that council services are close and easily available to all the residents. The second strategic priority is to implement sustainable growth in the region. There are a number of ways the city can implement sustainable growth. First, there is need to reduce utility bills so that production costs also fall. Reduction in utility bills can attract investment into the region. Improving energy efficiency is another way in which sustainable growth can be achieved. This will be helpful in reducing electricity bills for the residents as well as the investors. The city plans to achieve a 20% reduction in the total amount of energy consumed by total households annually. The city will also shift to green sources of energy as alternative energy sources.

The role of nonprofit organizations

Nonprofit organizations have a critical role to play in shaping the economy of the region. These organizations are critical in provision of public services that the local authority may be unable to provide to its citizens (Horne, Johnson, & Van Slyke, 2005). In addition, nonprofit organizations can support the local government in provision of public services through partnerships. The role played by nonprofit organizations in city environments has increased tremendously in the last decade. Nonprofit organizations have become increasingly important since they are able to provide core services in a non-coercive way unlike governments (Salamon, 2003). They are also non-distributive in terms of profit which makes them more attractive in delivery of public services. Nonprofit organizations are independent of government and control their own activities. The board of directors which is responsible for the management of these entities does not benefit from their activities which makes them ideal for delivery of sensitive public services. Subsidizing nonprofit organizations would thus be beneficial to the general public since there would be corresponding improvement in provision of services.

In conclusion, budgets are of great importance in the control and management of public expenditure. Budgets serve as the key to decision making at both the local and national levels. The budget should reflect the needs of the citizens. In order for the budget to reflect the needs of the citizens, policymakers must conduct in-depth analysis of the current budget, programs to be implemented, federal policies, current needs of the locals, and others. This helps ensure that the budget reflects the needs of the majority. In planning budgets, policymakers must ensure that they take into consideration budget constraints. All budgets are limited by inadequacy of resources and hence the city must carefully plan on how to allocate the limited resources for maximum social benefit.

 

References

Allen, R., & Tommasi, D. (2001, 5 28). Managing Public Expenditure. Retrieved from OECD: http://www1.worldbank.org/publicsector/pe/oecdpemhandbook.pdf

Baker, K. (2016). Nonresidential Construction in full recovery mode. Retrieved from The American Institute of Architects: http://www.aia.org/practicing/AIAB106916

Brigham, E. F., & Ehrhardt, M. C. (2008). Financial management: Theory & practice. Mason,     Ohio: Thomson Business and Economics.

Hatch, G. (2013, October 22). Federal Financial Reporting: An Overview. Retrieved from Congressional Research Service: https://www.fas.org/sgp/crs/misc/R42975.pdf

Horne, C. S., Johnson, J. L and Van Slyke, D. M. 2005. “Do Charitable Donors Know Enough-   and Care Enough-About Government Subsidies to Affect Private Giving to Nonprofit          Organizations?” Nonprofit and Voluntary Sector Quarterly,Vol. 34(1): 136-149.

International Monetary Fund. (n.d). Budget Preparation. Retrieved from:             https://www.imf.org/external/pubs/ft/expend/guide3.htm

OECD. (2004). The legal framework for budget systems: an international comparison. OECD      Journal on Budgeting, 4(3): 2-34.

Oyerinde, D., Iyoha, N. (2010). Accounting Infrastructure in the Management of Public Expenditure in Developing Countrires: A focus on Nigeria. Critical Perspectives on Accounting, 21(3): 361-373.

Salamon, L. M. 2003. The Resilient Sector: The State of Nonprofit America. New York:   Brookings Institution.

In Cruz-Cunha, M. M., In Moreira, F., & In Varajao, J. (2014). Handbook of research on enterprise 2.0: Technological, social, and organizational dimensions.

Quah, J. S. (2016). The role of the public bureaucracy in policy implementation in five ASEAN countries. Cambridge: Cambridge University Press.

Burchell, R., & Listokin, D. (2012). The fiscal impact Handbook: Estimating local costs and revenues of land development. New Jersy, NJ: Transactional Publishers.

error: Content is protected !!