increasing the income
“Application of the CVP interconnection accounting model beyond the acceptable and relevant range or over long time periods.”
The CVP interconnection accounting model is a convenient model for making decisions on enterprise management within the acceptable range of the “Volume of production (purchase of goods) driver and its sales” driver. Spreading the logic of the accounting model beyond the acceptable range without changing the revenue function from product sales and the enterprise total cost function is an error, since these functions are non-linear over a wider range of changes in driver values. Continue reading
What is the role of effective inventory management for enterprise logistics?
This is a question of what is primary and what is secondary in the logistics of an enterprise. Or, in other words, where the horse should be: in front of the cart or behind it.
The logistics function “Inventory management” is a “horse” in relation to all other logistics functions of an enterprise that are “cart”. The role of effective inventory management for the enterprise’s logistics is the master or the leading one: first, a decision on effective inventory management must be made (designed), and then this decision must be “recalculated” into the content of other enterprise logistics functions, including “Warehousing” and “ Management of transportation of goods in the input and output logistics of the enterprise “. Continue reading
Forecast revenue from sales of products for the item position is equal to the product of the forecast of the average consumer demand for the company’s products and the plan price of sales of products.
The production plan (purchase of goods) and its sales plan is set equal to the forecast of average consumer demand for products.
The production plan (purchase of goods) and its sales is a consequence of the forecast of the average consumer demand for the company’s products when the company uses the market approach to planning its business activities. The plan for sales of products should be equated to an accurate forecast of consumer demand for the company’s products, since in order to ensure competitiveness, an enterprise must be customer-oriented, and a customer-oriented enterprise must fully meet the needs of the target consumer in terms of quantity of products. Consumer demand for products under market conditions is a random variable, the instantaneous value of which for the future period of activity is impossible to predict or predict with 100% probability (accuracy). Continue reading