Goodwill is that segment of the total purchase consideration that is left after evaluating the fair value of assets. However, the determination of the price or value of goodwill is quite challenging. This is because it deals with the intangible components. The simplest way to calculate goodwill is to estimate the business's overall value. Besides this, there are some … [Read more...] about How to calculate Goodwill?
Poka Yoke
Definition: Poka-Yoke is a mechanism applied to any process to prevent human mistakes in manufacturing units. It is a part of lean manufacturing systems that helps in preventing mistakes as and when they occur. This concept is given by an industrial engineer named 'Shigeo Shingo' at Toyota Production Systems in Japan. It was first named 'Baka-Yoke', which means … [Read more...] about Poka Yoke
Producer Equilibrium
Definition: Producer Equilibrium is the combination of price and output that yields maximum profit. Besides, it is the point where the producer maximizes profit or minimizes losses. Briefly, it is an output level where profit is maximum and firms have no intent to change it. It is alternatively known as Firm Equilibrium, Profit Maximization or Loss Minimization. In … [Read more...] about Producer Equilibrium
Market Cannibalization
Definition: Market Cannibalization or Corporate Cannibalism is a marketing phenomenon where the firm's new product eats the established product's market share. Moreover, it is a strategy wherein the existing product's sales are reduced by introducing new products and brand extensions. For instance, Coke launched similar products for common customers like Diet Coke, … [Read more...] about Market Cannibalization
Product Mix
Definition: Product Mix is a collection or portfolio of entire varieties of products marketed by the company. Moreover, we can also call it the composite of all the product lines and sub-categories existing in the company. However, it is suitable for organizations offering diversified products. It is also referred to as Product Assortment and Product Portfolio. The … [Read more...] about Product Mix
Production Planning and Control
Definition: Production Planning and Control or PPC is a managerial function that integrates and coordinates the production processes to accomplish predetermined objectives. It establishes schedules to plan the entire production and assure efficiency in processes and resources. Basically, it determines: The requirement of the production facilities. Accommodation of … [Read more...] about Production Planning and Control
Mezzanine Financing
Definition: Mezzanine Financing is a non-traditional, alternate source of finance that inherits the characteristics of both Debt and Equity. Besides, it is a subordinated debt that is unsecured in nature. In addition, it is not backed by any collateral security. It belongs to private equity and is prominent among venture capitalists. However, it yields higher returns … [Read more...] about Mezzanine Financing
Material Requirements Planning
Definition: The Material Requirements Planning or MRP is a subset of the Inventory Control System. It determines the exact quantity of dependent demand items required for production as specified in the Master Production Schedule (MPS). Where Dependent Demand Items include components of the final product and its sub-assemblies. The information about these items is obtained … [Read more...] about Material Requirements Planning
Management Accounting and its Functions
Definition: We can refer to Management Accounting as an accounting system that provides information to perform management functions directed toward achieving organizational objectives. If we emphasize the keyword, it is explanatory to denote the managerial aspect of accounting. Besides, it has a differentiated lookout directed towards decision-making and control. It … [Read more...] about Management Accounting and its Functions
Master Production Schedule
Definition: The Master Production Schedule (MPS) is the master level product-wise schedule made for the individual end-products or sub-parts of the products in order to get detailed information about the overall manufacturing. Moreover, we can also understand it as the Disaggregation of the Aggregate plan. As it creates separate schedules for every single item of the … [Read more...] about Master Production Schedule