经济类课件汇集_FIN2101_Lecture04 Working Capital Management (1/2)

FIN2101 Business finance li

FIN2101 Business Finance II

Module 4 Working capital management (Week 1)

Module 4 Working Capital Management (Week 1)

Student Activities (Inventory) Reading a Text, Chapter 17(pp. 632-8 only) Text Study Guide, Chapter 17(part only Study book, Module 4.2(pp. 4.4 to 4.12) Tutorial Work Tutorial Workbook Self assessment activity 4.2 Text Study Guide, Chapter 17, T/F 7-10, MC 9& 11-15. Problems6.7.889

Student Activities (Inventory) Reading ◼ Text, Chapter 17 (pp. 632-8 only) ◼ Text Study Guide, Chapter 17 (part only) ◼ Study Book, Module 4.2 (pp. 4.4 to 4.12) Tutorial Work ◼ Tutorial Workbook, Self Assessment Activity 4.2 ◼ Text Study Guide, Chapter 17, T/F 7-10, MC 9 & 11-15, Problems 6, 7, 8 & 9

Student Activities( Cash Reading ■Text, Chapter16 Text study guide, Chapter 16 a Study Book, Module 4.3(pp 4.12 to 4.20) Tutorial Work a Tutorial Workbook, Self Assessment Activity 4.3 Text Study guide. Chapter 16

Student Activities (Cash) Reading ◼ Text, Chapter 16 ◼ Text Study Guide, Chapter 16 ◼ Study Book, Module 4.3 (pp. 4.12 to 4.20) Tutorial Work ◼ Tutorial Workbook, Self Assessment Activity 4.3 ◼ Text Study Guide, Chapter 16

Working capital management ■ Inventory Cash ■ Accounts receivable Integrated approach required

Working Capital Management ◼ Inventory ◼ Cash ◼ Accounts receivable ◼ Integrated approach required

Inventory Manufacturer raw materials work-in progress finished goods not sold Wholesaler/retailer goods in warehouse goods on shelves

Inventory ◼ Manufacturer - raw materials, work-in￾progress, finished goods not sold. ◼ Wholesaler/retailer - goods in warehouse, goods on shelves

Objective a Balance the costs and benefits with the aim of CosT MINImIsation Inventories should be increased as long as the resulting savings exceed the total cost of holding the additional inventory

Objective ◼ Balance the costs and benefits with the aim of COST MINIMISATION. ◼ Inventories should be increased as long as the resulting savings exceed the total cost of holding the additional inventory

Inventory costs a Acquisition(ordering)costs Carrying(holding) costs ■ Stockout costs Generally there are carrying costs which increase with the size of the company's order quantity and acquisition costs which decrease with the size of the order quantity

Inventory Costs ◼ Acquisition (ordering) costs ◼ Carrying (holding) costs ◼ Stockout costs ◼ Generally, there are carrying costs which increase with the size of the company’s order quantity and acquisition costs which decrease with the size of the order quantity

Economic Order Quantit EOQ is the optimal order quantity for a particular inventory item, given its predicted usage, ordering cost and carrying cost

Economic Order Quantity EOQ is the optimal order quantity for a particular inventory item, given its predicted usage, ordering cost and carrying cost

EOQ Model assumptions Constant and certain demand No quantity discounts available ■ No lead time Constant ordering costs Constant carrying costs per unit of inventor

EOQ Model Assumptions ◼ Constant and certain demand ◼ No quantity discounts available ◼ No lead time ◼ Constant ordering costs ◼ Constant carrying costs per unit of inventory