Financing and Producing Goods

1. Financing and Producing Goods

2. Financing Financing- obtaining funds for business expansion Savings Loans Stocks/Bonds

3. How to decide to finance? Cost Benefit Analysis Estimate cost of expansion Calculate expected revenues (income from sales) Calculate expected profits (revenues minus costs) Cost of borrowing funds If expected profits cover cost of financing, go for it�.

4. Types of Debt Financing Short-term Financing: less then a year Intermediate-term Financing: 1-10 years Long-term Financing: more then 10 years Choice: Interest costs Financial condition of company Market climate Control of Company

5. Production Process

6. Production Operations Production- turning resources into goods Steps in Production Operations Planning Purchasing Quality Control Inventory Control

7. Technology and Production Mechanization The Assembly Line Division of Labor Automation Robotics

8. How much is really spent on advertising??? Is it worth it???

9. Consumer Utility Utility- satisfaction Form Utility- production of a good Place Utility- proximity of good or service Time Utility- available at good times Ownership Utility- satisfaction from owning good or service

10. Market Research Gathering, recording and analyzing data. Why do research? Determines the market for goods Design changes Market surveys- age, gender, income, education and location are important Test Marketing- small locations

11. Four Ps of Marketing Product: What to produce Price: Price leadership Penetration pricing Place: Where should it be sold Promotion: Types of promotion or advertising

12. Distribution How goods are moved� Wholesalers Retailers Storage & Transportation Club Warehouse Stores Direct Marketing