Engineering Management - short answer questions from AMIE exams (Winter 2016)

Answer the following in brief

Financial Ratios and their implications

A financial ratio or accounting ratio is a relative magnitude of two selected numerical values taken from an enterprise's financial statements. Often used in accounting, there are many standard ratios used to try to evaluate the overall financial condition of a corporation or other organization. There are six categories of financial ratios that business managers normally use in their analysis. Within these six categories are 15 financial ratios that help a business manager and outside investors analyze the financial health of the firm.

• Working Capital Ratio
• Earnings per Share (EPS)
• Debt-Equity Ratio
• The Bottom Line
• Quick Ratio
• Price-Earnings (P/E) Ratio
• Return on Equity (ROE)

What do you mean by social audit?

A social audit is a formal review of a company's endeavours, procedures, and code of conduct regarding social responsibility and the company's impact on society. For example, a local family store makes a clothing donation to a local church that has a homeless shelter for women and children. The store makes a similar donation three times a year. This is something that a social audit might uncover. Factors examined by a social audit include records of charitable contributions, volunteer events, efficient utilization of energy, transparency, work environment, and employees' wages.

Define Decision-making

Decision making is the process of making choices by identifying a decision, gathering information, and assessing alternative resolutions. This approach increases the chances that you will choose the most satisfying alternative possible. 

Example: Imagine you are the CEO of an e-commerce start-up. Your work is expanding and you need to hire the right resources to help you realize the vision of creating a leading online retail platform. You would need to hire people who are experienced and adept in their fields such as software development, marketing, operations, procurement, and logistics. Since the business is an online start-up, you won’t need to hire employees who work on the premises exclusively. You can also get talented location-independent workers capable of delivering the required technical support and services online. By ensuring an optimal mix of on-site and remote workers, you can easily carry out the functions in a cost-effective way. 

What is production management?

Production Management refers to the application of management principles to the production function in a factory. In other words, production management involves the application of planning, organizing, directing and controlling the production process. 

The main activities of production management can be listed as:

• Specification and procurement of input resources namely management, material, and land, labour, equipment and capital.
• Product design and development to determine the production process for transforming the input factors into the output of goods and services.
• Supervision and control of transformation process for efficient production of goods and services.

What is Linear Programming

Linear programming (LP, also called linear optimization) is a method to achieve the best outcome (such as maximum profit or lowest cost) in a mathematical model whose requirements are represented by linear relationships. Solving linear programming problems is not difficult as long as you have a solid foundational knowledge of how to solve problems involving systems of linear inequalities. 

Consumer behaviour and market research.

Market research is the process of gathering, analyzing, and interpreting information to help a company or individual assess the viability of a product or service and make sound business decisions. It is of immense importance to entrepreneurs and startup companies to evaluate the feasibility of a business before committing further resources to the venture.

Consumer behaviour is the study of customers and organizations to determine how they select and use products and services:

• How consumers choose from various alternatives
• What customers think about different alternatives
• What mechanism do consumers use to select from different options
• How consumers behave when shopping and researching

Product Design and Development

• Product design is a process of creating new products through efficient idea generation and concept development to manufacture. The product design process is a set of planned activities that convert an idea into a product and make it commercially available to the end-user. Product design is a part of the product development cycle. Technical people and area experts are involved in product design activities.
• Product development involves market analysis, conceptual & product design, manufacturing, marketing, sales, and customer support activities.

These product development activities continue till the end of the product life cycle. Therefore product development is a broader term that involves activities from market research to the end of the product life cycle. And product design is a part of product development.

Pricing and Promotion

Promotional pricing is defined as a pricing strategy intended to attract interest and increase sales in the short term. Getting maximum sales in minimum time is the primary intent behind promotional pricing.

Every company applies promotional pricing to their products once in a while. Clearing the existing stock is the idea behind promotional pricing. Black Friday deals, boxing day deals, and New year deals are when companies adopt promotional pricing strategies.

Layout-types

There are four basic layout types: process, product, hybrid, and fixed position.

• Process layouts.  Layouts that group resources based on similar processes or functions. Process layouts arrange items by type as seen in this grocery store.
• Product layouts are found in flow shops (repetitive assembly and processes or continuous flow industries). Flow shops produce high-volume, highly standardized products that require highly standardized, repetitive processes.
• A fixed-position layout is appropriate for a product that is too large or too heavy to move. For example, battleships are not produced on an assembly line.
• Many situations call for a mixture of the three main layout types. These mixtures are commonly called a combination or hybrid layouts. For example, one firm may utilize a process layout for the majority of its process along with an assembly in one area.

Attributes and variables

• Attribute Data  Some data are qualitative data with a quality characteristic or attribute that are described in terms of measurements. These data can be classified and counted. This category of data is called attribute data. These data are described qualitatively in terms of dimensions, weights or other attributes that meet or do not meet the product specification. Attribute data are all-around use. For example, telephone area codes, clothing sizes, pass or fail assessment; all these can be called attribute data.
• Variable Data  If you can meaningfully add or subtract values of the data, then you are working with what is called variable data or continuous data. The name continuous refers to the idea that this type of data can have any value from a continuous scale, like the temperature reading on a mercury thermometer. Variable data is data that is used to measure some physical characteristics such as length, width, temperature, time, strength, thickness, pressure, and so on. 

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