Master of International Business Essay Example for Free

Master of International Business Essay What is inventory turnover? How can a high inventory turnover ratio be detrimental to a firm? Inventory turnover refers to the number of times that inventory is sold in a one year period. It can be calculated by dividing the cost of goods sold for a particular period by the average inventory for that period. High inventory turnover may signal a low level of inventories, which can increase the chance of product stockouts. 2. Distinguish among cycle, safety, pipeline, and speculative stock. Cycle (base) stock refers to inventory that is needed to satisfy normal demand during the course of an order cycle. Safety (buffer) stock refers to inventory that is held in addition to cycle stock to guard against uncertainty in demand and/or lead time. Pipeline (in-transit) stock is inventory that is en route between various nodes in a logistics system, while speculative stock is inventory that is held for several reasons to include seasonal demand, projected price increases, and potential product shortages. 3. Define what is meant by inventory carrying costs. What are some of its main components? Inventory carrying costs refer to the costs associated with holding inventory. Inventory carrying costs consist of a number of different components, and their importance can vary from product to product. These components include obsolescence costs, shrinkage costs, storage costs, taxes, and interest costs. 4. Discuss the concept of stockout costs. How can a stockout cost be calculated? Stockouts refer to situations where customers demand items that are not immediately available and stockout costs refer to the costs associated with not having items available. Calculation of a stockout cost first requires a company to classify potential customer responses to a stockout (e. g. , delays the purchase, lost sale, lost customer). Next, the company needs to assign probabilities to the various responses as well as to assign monetary losses to the various responses. The respective probabilities and losses are multiplied together and then all costs are summed to yield an average cost of stockout. 5. Distinguish between a fixed order quantity and fixed order interval system. Which one generally requires more safety stock? Why? In a fixed order quantity system, the order size stays constant (although the time interval between orders may vary); in a fixed order interval system, the time interval is constant (although the order size may vary). The infrequency of inventory monitoring makes a fixed order interval system more susceptible to stockouts and thus there is likely to be higher levels of safety stock in a fixed order interval system. 6. Explain the logic of the EOQ model. The logic of the EOQ model is as follows: determining an order quantity requires a company to balance two costs; the costs of carrying the inventory and the costs of ordering it. Inventory carrying costs are in direct proportion to order size; that is, the larger the order, the greater the inventory carrying costs. Ordering costs, by contrast, tend to decline with order size but not in a linear fashion. The EOQ attempts to find the point (quantity) at which ordering costs equals carrying costs. 7. How can inventory flow diagrams be useful to a logistics manager? They present a visual depiction of additions to, and subtractions from, inventory. This could be helpful in identifying any patterns that might be occurring. In addition, inventory flow examples illustrate how safety stock can offset an increased rate of demand as well as longer than normal replenishment cycles. 8. Discuss what is meant by ABC analysis of inventory. What are several measures that can be used to determine ABC status? ABC analysis is an approach that recognizes all inventories are not of equal value to a firm and, as a result, all inventory should not be managed in the same way. Measures that can be used to determine ABC status include sales volume in dollars, sales volume in units, the fastest selling items, item profitability, or item importance. . What are implications of the JIT approach for supply chain management? The consequences of JIT actually go far beyond inventory management and JIT has important implications for supply chain efficiency. One implication is that suppliers must deliver high quality materials to the production line, in part because of JIT’s emphasis on low (no) safety stock. Moreover, because customers in a JIT system tend to place smaller, more frequent orders, it is imperative that suppliers’ order systems are capable of handling an increased number of orders in an error-free fashion. Smaller, more frequent orders, coupled with close supplier location, tend to favor truck as a mode of transportation and this means that production and distribution facilities should be designed to support truck shipments. 10. How does vendor-managed inventory differ from traditional inventory management? In â€Å"traditional† inventory management, the size and timing of replenishment orders are the responsibility of the party using the inventory. Under vendor-managed inventory, by contrast, the size and timing of replenishment orders are the responsibility of the manufacturer. This represents a huge philosophical shift for some organizations in the sense that they are allowing another party to have control over their inventories and this requires a great deal of trust among the various parties. 11. Do substitute items or complementary items present the greater managerial challenge? Support your answer. Either answer would be acceptable. Students should recognize that both substitute items and complementary items present managerial challenges, but the nature of these challenges is different. For instance, one challenge with substitute items might be the amount of product to hold; a challenge with complementary items might be product placement in a retail outlet. 12. Define what it meant by dead inventory. What are several ways to manage it? Dead inventory refers to product for which there is no demand—at least under current marketing practices. Because dead inventory has often been associated with overproduction of items that customers do not want (or need), one suggestion would be make to order as opposed to make to stock. Having said this, an increasing source of dead stock in recent years involves special, highly customized orders that never end up with the customer. Suggestions for dealing with this situation include partial (or full) prepayment as well as a no-return policy. Another suggestion is for companies to more aggressively market their dead stock, and companies might also sell dead inventory via auctions. Another possibility is to donate the dead inventory to charitable causes. A last resort is to simply throw away the dead inventory in order to free up storage space. 13. Explain how an SKU might have different meanings, depending on one’s position in the supply chain. A retailer, for example, might keep records in terms of individual items or case lots, while the warehouse that supplies the retailer may deal only with case lots or pallets loads of a product. In turn, the distributor that sells to warehouses may deal with only pallet loads or vehicle loads, and may only accept orders only for pallet loads or vehicle loads—and not case lots or individual items. 14. Why is it important for a manager to understand informal considerations with respect to inventory management? One reason is that the increasing quest for customer service and customer satisfaction is leading many companies to engage in informal considerations. Even though â€Å"formal† inventory analysis should not be ignored, they should not be applied without taking into account informal arrangements. The informal arrangements may not fit any â€Å"formal† inventory tenets, but many informal considerations tend to do an excellent job of satisfying customers. And, without customers, businesses are not going to be very successful. 15. Discuss some of the challenges that are associated with managing repair and replacement parts. One challenge is the difficulty in forecasting the demand for these products—when will products break down or fail? As such, it becomes challenging with respect to which parts to carry as well as the appropriate stocking levels for them. Another challenge involves the number of warehousing facilities to be used: Should the parts be more decentralized or more centralized? These and other challenges have caused some companies to outsource their repair/replacement parts business. 16. Which presents the greater reverse logistics challenge: (1) Returned items or (2) Refurbished and recycled products? Support your answer. As was the case with question 11, either answer is acceptable. Again, it is important to recognize that both present reverse logistics challenges—but the nature of the challenges is different. For example, there is unpredictability with respect to returned items, in terms of return rates and product content. Refurbishing and recycling, by contrast, are predicated on sufficient product volumes, which require adequate storage space. 17. What are substitute items and how might they affect safety stock policies? Substitute items refer to products that customers view as being able to fill the same need or want. With respect to safety stock policies, if a consumer has little hesitation in substituting another item for one that is out of stock, there would appear to be minimal penalties for a stockout. It is also important that companies understand substitution patterns in the sense that Product A may be a substitute for Product B, but the reverse may not be true. In such a situation, safety stock policies would need to reflect the appropriate relationships. 18. Which supply chain participant(s) should be responsible for managing inventory levels? Why? The key to this question is the word â€Å"managing. Although various inventory approaches may require certain select participants to maintain the inventory, supply-chain effectiveness and efficiency would argue that all supply chain participants should be involved with managing inventory levels. Because the supply chain is a system, one company’s inventory policies and practices can impact the other members of the supply chain. Failure to consider these other participants when setting inventory policies and practices could lead to dysfunctional consequences. 19. Should inventories be considered investments? Why? The text suggests that inventories should be considered investments. Carrying costs for inventories can be significant; the return on investment to a firm for its funds tied up in inventory should be as high as the return it can obtain from other, equally risky uses of the same funds. 20. Since the mid-1990s, many beer and soft-drink cans and bottles have contained a freshness date stamped on them to indicate the latest date that the product should be consumed. What problems might such a system cause for the people responsible for managing such inventories? Discuss. There are a variety of possible answers to this question. One consideration is that product needs to be in places where it can be bought prior to the expiration date. At a minimum, this means that companies need to be able to identify individual products, locate the products, and move the products to the appropriate place(s). The oldest inventory should be â€Å"turned† before other inventory. Another consideration involves what to do with expired product, a situation that brings into play reverse logistics considerations.

Gay Marriage Should be Legal :: Social Issues Gay Marriage Essays

On June 26, 2015, the US Supreme Court ruled that the US Constitution guarantees the right for same-sex couples to marry in all 50 US states. Associate Justice Anthony Kennedy stated in the majority opinion: "The court now holds that same-sex couples may exercise the fundamental right to marry. No longer may this liberty be denied to them." Many conservatives are completely against gay marriage and they have stated that they will fight to have the Supreme Court ruling overturned. Christian politicians are using religious arguments to establish that homosexuality is an abomination. While this may be their belief, this country was founded on religious freedom, where the people are allowed to worship how they see fit. A ground rule, set up from the beginning, states that separation needs to be made between religion and government, so the two shall never meld to become a theocracy. With the issue of gay marriage, lines get blurred and religion rears its head to influence a governmentâ⠂¬â„¢s decision of who shall be married and who will be refused.   Ã‚  Ã‚  Ã‚  Ã‚  The history of gay marriage spans decades, even centuries of undocumented ceremonies and commitments. While I would like to delve into the long history, I must stick to modern accounting of gay marriage and government’s role in this record keeping. Denmark became a trailblazing country, leading the way for the concept of registering same-sex couples in what we know as a civil union. This pioneering country voted on a law to register domestic partnership of gay couples on May 26, 1989. The law went into force on October 1, 1989. Shortly after the groundbreaking decision in Denmark, other European countries followed suit with registration for gay partnerships. The following countries have some type of registration for homosexual partnerships: Norway, Sweden, Greenland, Hungary, Iceland, The Netherlands, France, Belgium, Portugal, Germany, and Finland.   Ã‚  Ã‚  Ã‚  Ã‚  While European countries were progressively trying to resolve the gay marriage issue, in the United States there were struggles to support gay marriage as a governmental approved institution. The first success was in Hawaii on December 3, 1996 at 11:03 a.m., when a lower court found that the constitution of the state of Hawaii was discriminating against homosexuals (known as the Hawaii 6). After this ruling Hawaii’s government set up a program offering â€Å"Reciprocal Beneficiary Relationships† where 62 spousal rights on the state level were given to homosexuals. This was a short-lived victory.

I Know Why the Caged Bird Sings Critique

I Know Why the Caged Bird Sings is the autobiography of Maya Angelou. I find it to be a rather interesting novel, since it is based on a true story. It also helps the reader understand how black people lived and felt during that period. In the novel, there is a wide range of themes, from family ties, to rape, and even literacy. In Maya Angelou’s I Know Why the Caged Bird Sings, the three main themes are racism, prejudice and the roll of black women. The first and most visible theme in the novel is racism. During 1969, it is common to see a black person as inferior to a white person. In the novel, Angelou shows the crudeness of white Southern attitudes toward African Americans. For example, in chapter 24, Marguerite goes to the dentist and Dr. Lincoln, a white man, refuses to treat her because she is black. He says: â€Å"I’d rather stick my hand in a dog’s mouth than in a nigger’s. † (Angelou 189). Not even because of necessary medical attention does a white person leave aside the race and treat a black patient. Putting aside her strong feelings against racism, Angelou demonstrates how she develops the understanding of the rules for surviving in a racist society. For example, in chapter 5, when the â€Å"powhitetrash† mock Momma, she stood humming while Marguerite is filed with rage, indignation and helplessness. Momma instead shows her how to maintain dignity and pride while dealing with racism. With her indifference towards the disrespectful white girls, Momma serves as a role model to all black people in her community by being the bigger person in a situation like this. The second theme in the novel is prejudice. Maya, her friends and her relatives will always be subject to prejudice simply because they are black. For example, in chapter 23, during Marguerite’s graduation, Mr.  Edward Donleavy gives a speech in which he mentions how blacks only achieve greatness through sports, not through academics: One of the first-line football tacklers at Arkansas Agricultural and Mechanical College had graduated from good old Lafayette Country Training School†¦ One of the best basketball players at Fisk sank his first ball right here at Lafayette Country Training School. (Angelou 179) The fact that Mr. Donleavy assumes that students from this school are only good for sports, simply because of their race, shows how he speaks based on prejudice beliefs. Prejudice in the novel is seen from both sides: in white people and black people. Since most white folks in Stamps mistreat blacks, black people assume all whites are the same, which means they are also prejudice against white people. For example, in chapter 2, Marguerite mentions her passion for literature, especially for Shakespeare, a white writer. She says how Bailey and she can’t mention Shakespeare to Momma: â€Å"she’d question us about the author and we’d have to tell her that Shakespeare was white, and it wouldn’t matter to her whether he was dead or not. (Angelou 14). Shakespeare is a great writer, but Momma doesn’t know this since she is prejudice against white writers and doesn’t give herself the chance to find out about this writers greatness. The third theme presented in the novel is black women’s roll. Angelou presents women’s condition during this period and describes their lives in a male-dominated society. She also shows how it’s even harder being a black woman, having to overcome this storm of sexism and racism. Some women are able to do so and become great. For example, Momma is a successful black woman, who owns a store and is considered to be wealthy. She is able to overcome the condition she is submitted to by society and become the most successful black woman in Stamps. Marguerite also serves as an example for black women’s roll during 1969. She lives in a hostile world defined by beauty in terms of whiteness: Wouldn’t they be surprised when one day I woke out of my black ugly dream, and my real hair, which was long and blond, would take the place of this kinky mass that Momma wouldn’t let me straighten? My light-blue eyes were going to hypnotize them†¦ (Angelou 2) Marguerite believes the only way to be a beautiful and successful woman is by being white. With the help of strong female role models in her family and community: Momma, Vivian, Grandmother Baxter, and Bertha Flowers, she is able to overcome her racist and sexist beliefs, succeed in her life and become the great woman she is known to be today. Maya Angelou’s I Know Why the Caged Bird Sings is a true story about the author’s hard life during the 1960’s, a time in which black people are seen as inferior in many different aspects by society. The novel shows how they fight against racism, sexism and prejudice, and how white people also experience prejudice from black people. These themes are presented in the most realistic and crude way possible. In the end, Maya transforms from a victim of prejudice and racism with an inferiority complex to a self-confident young woman who is able to react to racism with dignity and pride.

The Jazz Movement - Free Essay Example

Sample details Pages: 1 Words: 392 Downloads: 7 Date added: 2019/07/30 Category Music Essay Level High school Tags: Jazz Essay Did you like this example? Jazz is a style of music inspired from African rhythms and European harmonies. Jazz music primarily came from West Africa when slaves came to the south of the US. Slaves would sing jazz songs while working on plantations. Don’t waste time! Our writers will create an original "The Jazz Movement" essay for you Create order Later on jazz was merged with European styles of music, which changed the style a bit (Schuller). The spread of jazz music mixed French, Spanish, Anglo, and African cultures (Ciment 307). Jazz music is characterised by rhythms, ensemble playing, improvisation, etc. A lot of classical composers such as Aaron Copland, John Alden Carpenter, and Igor Stravinsky began playing and making jazz music because of the unique rhythms, melodies, and articulations. That made jazz music begin to spread more. (Schuller). Jazz was played before the 1920s but the popularity grew absurdly during that time, especially after World War I, since many jazz musicians moved to big northern cities during that time (The Jazz Age). Jazz music is constantly evolving so there is no limit as to what can be done with it, which is why it’s so hard to define. Different composers use various styles of jazz, and have different definitions for it. Jazz was played in speakeasies and nightclubs and oftentimes owners would pay to have the police ignore the clubs, since they were illegal at the tim (The Jazz Age). Jazz music had a big impact on American culture as it crossed racial lines in the 1920s since white audiences would listen to African American jazz musicians (Ciment 308). Tension between races began to lessen a bit since cultures mixed, but there was still plenty of racial prejudice during the time. For example, white jazz musicians were given more airtime than African American jazz musicians due to racism in radio stations (The Jazz Age). On a more positive note, jazz music opened new job opportunities for the women of the 1920s in the entertainment industry. However, they were not very well known until the 1930s (The Jazz Age). The persistence these female musicians had made it easier for other female artists who dreamed of making it in the entertainment world. Unfortunately, the relaxed and fun times created by the jazz age didnt last long, since it was then followed by the stock market crash that led to the great depression during the 1930s, which caused panic and hard times for Americans (The Jazz Age).

Attaining a Health Care Management Masters Degree 2019

Some aspects of health care management overlap with health care administration, and the terms are often used synonymously. Health care administration involves more direct daily management in health care facilities, such as a head nurse who is responsible for scheduling nurses on a certain floor of the hospital. Health care management would refer to an individual who is in charge of directing an entire health care facility. Health care management and health care administration have only subtle differences, and not every masters or doctorate program will label the course of study in the same fashion. Sometimes health administration will involve policy making decisions, and sometimes health care management will involve that. There is an MBA offered at the University of Phoenix Online that specializes in health care management. This course of study prepares students for administrative decisions related to health care finance, database management, health care infrastructure, and health care organization maintenance. At American InterContinental University, there is an MBA offering that has a health care management focus. There is also a similar program of the same name at Jones International University. They offer accelerated programs with classes lasting eight weeks. At Colorado Technical University, there is a bachelors program in health care management. .u3114f395a31dc151daa4acd6977e8f29 { padding:0px; margin: 0; padding-top:1em!important; padding-bottom:1em!important; width:100%; display: block; font-weight:bold; background-color:#eaeaea; border:0!important; border-left:4px solid #34495E!important; box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -moz-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -o-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -webkit-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); text-decoration:none; } .u3114f395a31dc151daa4acd6977e8f29:active, .u3114f395a31dc151daa4acd6977e8f29:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; text-decoration:none; } .u3114f395a31dc151daa4acd6977e8f29 { transition: background-color 250ms; webkit-transition: background-color 250ms; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; } .u3114f395a31dc151daa4acd6977e8f29 .ctaText { font-weight:bold; color:inherit; text-decoration:none; font-size: 16px; } .u3114f395a31dc151daa4acd6977e8f29 .post Title { color:#000000; text-decoration: underline!important; font-size: 16px; } .u3114f395a31dc151daa4acd6977e8f29:hover .postTitle { text-decoration: underline!important; } READ University of Phoenix Nursing 5 Characteristics That Made Florence Nightingale Into a Nursing LegacyThere are other schools that offer certificate programs and degrees in health care management information. There are increasing numbers of electronic files that need to be protected due to person health information of patients, and that is why such a degree program is needed. Still a number of masters programs in health care management are geared towards public health. Online courses may lead to A Masters in Public Health/Community Health, or an MBA in Health Services. With one of these degrees, an individual might work at the city, country or state level Department of Health. Such individuals might be involved in health care policy-making. There are also PhD programs available is such a field. Communications, information technology, and finance are all a part of the health care industry. Many of these related issues are covered in a course of study towards a masters degree in health care management or health care administration. The goal of the positions attained as a result of one of these degrees is to maintain healthy organizations. .uaf0e8a04e4af439b1064400ae49ad0f1 { padding:0px; margin: 0; padding-top:1em!important; padding-bottom:1em!important; width:100%; display: block; font-weight:bold; background-color:#eaeaea; border:0!important; border-left:4px solid #34495E!important; box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -moz-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -o-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); -webkit-box-shadow: 0 1px 2px rgba(0, 0, 0, 0.17); text-decoration:none; } .uaf0e8a04e4af439b1064400ae49ad0f1:active, .uaf0e8a04e4af439b1064400ae49ad0f1:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; text-decoration:none; } .uaf0e8a04e4af439b1064400ae49ad0f1 { transition: background-color 250ms; webkit-transition: background-color 250ms; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; } .uaf0e8a04e4af439b1064400ae49ad0f1 .ctaText { font-weight:bold; color:inherit; text-decoration:none; font-size: 16px; } .uaf0e8a04e4af439b1064400ae49ad0f1 .post Title { color:#000000; text-decoration: underline!important; font-size: 16px; } .uaf0e8a04e4af439b1064400ae49ad0f1:hover .postTitle { text-decoration: underline!important; } READ Student Health Care Plans for School Nurses Related ArticlesHealth Care Administration CareersGetting Your Health Care Management EducationAdvanced Degrees in Health CareOnline Degrees In Healthcare AdministrationNursing and Health Care DegreesEarning a Masters Degree in Health Administration

Essay about A Fat Tax Economic Costs of Obesity are High

Todays world is full of modern conveniences. Communication is at the touch of a button, you can drive right to the window and get handed a greasy, hot meal, and even walking has become bothersome. Trying to find that spot closest to the door is worth driving around the lot five times. Kids play more in virtual reality than outdoors, and parents who are strapped for time settle on quick, processed meals for dinner. Unfortunately, weve created an environment fit for the lazy. Instead of having to preform physical activities to function throughout the day, we must find time for physical activity, which might not be realistic for everyone. The fast food industry and quick processed dinners feed the consumer with no time for exercise, and the†¦show more content†¦For example, a person could weigh 200 lbs at 5 feet and their BMI would be 39.1, while obesity is a BMI of 30 and above. But what if that person were a short body builder? BMI doesnt take into account the weight of musc le or bone density. Body shape is also of some importance; if someone has 50 extra pounds in their thighs they are at less risk for heart disease than someone with 50 extra pounds in their waist. Visceral fat, or fat located directly around the organs, is linked to many risk factors including insulin resistance. 26 million people in America have diabetes, and 90% - 95% of those are type two. According to the American Diabetes Association, 85.2% of people with type two diabetes are overweight. Economic costs of obesity are increasing and will continue to do so if nothing is done. Healthy Communities for A Healthy Future state that the estimated annual health care costs related to obesity are 190 billion dollars. This is 21% of total health care costs. This includes direct costs, such as preventive and treatment services, while indirect costs include income lost to days debilitated or future income lost to death. On an individual level, an obese person will cost 42% more in health car e than a person of healthy weight. A tax directly related to products known to cause obesity would offset the cost of health care, and hopefully result in less obesity in the Nation. Deciding which foods would be taxed is a difficult process.Show MoreRelatedThe Issue Of Obesity Among The United Kingdom Government1209 Words   |  5 PagesIntroduction Obesity has become an extremely concerning problem seriously needing to be addressed by the United Kingdom government. Some argue that a tax increase on unhealthy food should be implemented by the government in order to increase health levels across the UK, particularly those of children- for whom the current nationwide obesity problem is the most worrying. However, it is not certain whether implementing this tax will be economically viable. By evaluating the repercussions of introducingRead MoreFat Tax on Fast Food in Australia Essay642 Words   |  3 Pagesto the Organisation for Economic Co-operation and Development (OECD), Australia has the fifth-highest obesity rates of any country anywhere in the world, at a very high figure of 24.6 percent. This means that almost one in every four citizens is clinically overweight. A high fat tax on fast food and unhealthy drinks may help slow the world’s rising rates of obesity, as a recent study published in the British Medical Journal suggests. The $2.50 price hike on cigarette tax in 2013 is expected to haveRead MoreThe Effects Of Obesity On American Adults And Children1213 Words   |  5 PagesThe Effects of Obesity Obesity is on the rise in American adults and children. Over 78.6 million Americans are considered obese (CDC, 2014). Health experts believe the obesity crisis has become an epidemic that needs to be controlled. Today many efforts are being made by Federal and state governments and some major companies to combat obesity in adults and children. For example, some major companies are rewarding employees with cash incentives for exercising regularly and maintaining a healthyRead MoreSample Essay1475 Words   |  6 Pagesinclining rates of obesity in countries like France, South Korea, USA, England, Greece and Italy, a decision to produce low-calorie versions of their chocolate bars could be a healthier alternative to the country. There are a number of advantages and disadvantages to Kraft Foods while producing these. Advantages : a) They attract a new and major segment of the market which is more health conscious. This new segment of the market includes people who are on the path to obesity yet desire to consumeRead MoreThe Implementation Of A Fat Tax1158 Words   |  5 Pages The implementation of a â€Å"Fat Tax† is a topic that has been considered before in the UK. This is an additional tax on junk food, seeking to reduce the consumption of products containing high levels of fats, sugars and cholesterol. One of the primary considerations for such a tax is the scale of the obesity problem in the UK. Today’s obesity level in the UK is three times the 1980s level, currently 24.9% and is the highest in Europe (Nhs.uk 2015). The extent of the UK confectionery market size, whichRead MoreObesity : The Consumption Of Unhealthy And Overly Processed Foods1645 Words   |  7 PagesWithin the past 50 years, obesity rates have reached an epidemic level with the United States of America having one of the highest obesity rates in the world. America has become the poster child for obesity worldwide and that has become its most noticeable feature. Several presidents have tried implementing multiple short term solutions in recent years, but none have show n overall effectiveness in reducing the main cause of obesity: the over consumption of unhealthy and overly processed foods. TheRead MoreShould The Government Add Extra Tax On Junk Foods? Essay1315 Words   |  6 PagesShould the Government Add Extra Tax on Junk Foods? The rate of junk and fatty food consumption has grown in the United States compared to the past few decades. Lifestyle reports indicate that one of the primary issues that were altered is the type of diet that people consume. Currently, it seems like many people eat junk foods almost daily. Junk food refers to any diet that has insufficient nutritional value and unhealthy ingredients. The U.S. government should add extra taxes to junk foods to promoteRead MoreEssay on Globesity: Health Crisis/Epidemic930 Words   |  4 PagesAccording to a U.S. Prevalence of Adult Overweight and Obesity study conducted by NHANES from 2009-2010, 68.8% of our population is either obese or overweight. This new health crisis/epidemic has been slowly sneaking up on America in the last decade negatively influencing our society and changing our way of life. It’s hard not to walk down the street and ignore the shining golden arches the gleaming signs of various fast food restaurants and then the wa lk of shame home when you realize your pantsRead MoreObesity And Its Effects On Society1303 Words   |  6 PagesObesity and its Effects on Society ‘America is fat’, this statement repeated by numerous people in and out of healthcare profession and if someone don’t believe this statement, maybe the following statistic will change our mind. According to (CDC) Center for Diseases Control and prevention, obesity rate grew 65% between 1990 and 2002(Su). Still not convince? When most Americans read that statistics they have single question is ‘Why?’ How is the rate of obesity growing so fast? Is this the way weRead MoreENG4U IP EO1142 Words   |  5 Pagesgovernment should impose a high tax on junk food and soft drink. Firstly, junk food and soft drinks are harmful to the human body. Additionally, there will be negative consequences if a high percentage of people are obese in the country with an increased burden on the government due to more and more people get illnesses from purchasing this unhealthy food. Lastly, to promote the healthy living standards for citizens, the government can use the reven ue generated through these high taxes on harmful food

The Challenges of Financial Investment

Question: Explain the challenges of Financial Investment. Answer: The Challenge of Investing Today https://myassignmenthelp.com/mah_cms/uploads/image_2-1490080196.png are Developing diversified portfolio Taking suitable buying and selling decisions: Review and rebalancing of the portfolio Choosing stocks based on long term goals There are different options that are available in the market. The financial products have increased. It is important that suitable buying and selling of the stocks in the portfolio are made based on the different financial products. The specific challenges thatare there in the current stock market that have huge influence and impact on the investor decisions are as follows. The dynamism and uncertainty in the market has increased. In the current scenario the slowdown in the market isnt high enough to match the inflation rate that is prevailing in the market. This is to say that in the times of high inflation the interest rates were also high The complexity and the ambiguity in the financial markets has increased. Further after the financial crisis in 2008 the regulatory framework has made it more difficult to manage the investment as impact of these regulations will have to be considered The investor thus must focus on developing a portfolio that is diversified. Further proper research is conducted on the expected return based on the tools such as CAPM which is one of the most basic tools. Further it is important that portfolio is well diversified so that risk could be managed effectively Investment Information The stock that has been selected to be included in the portfolio, as shown above, is Citigroup. The company operates in the financial services industry. It is one of the oldest and largest financial service providers in USA. This is one of the strengths of the company as being in the industry for such a long time and having significant market share lends stability to the business of the company. Further the financial industry is the backbone of any economy. After the financial crisis there was a downfall in the market. However the stability of the economy is returning and the recovery of the economy is backed by strong financial support which is provided by the financial institutions. The company also has presence across various customers including consumers, corporations, governments, and institutions worldwide. The different services that are offered by Citigroup include traditional banking and commercial banking offering different services which include corporate, institutional, public sector, and high-net-worth clients. This segment provides wholesale banking products and services, including fixed income and equity sales and trading, foreign exchange, prime brokerage, derivative services, equity and fixed income research, corporate lending, investment banking and advisory services, private banking, cash management, trade finance, and securities services. Considering the above discussion it can be said that the stock has been quite stable having tremendous growth opportunities. Overall it is advisable to purchase the stock as it will benefit the portfolio in maintaining steady growth and at the same time reduced risk as Citigroup has significant market share with good business operations to boost the stock price movement. Based on the current economic conditions and the strong business portfolio of Citigroup it may be beneficial for making investment in the stock. Portfolio Construction The table has been prepared showing the portfolio that has been developed based on the following criteria One hundred shares of Citigroup Inc. USAA short term Corporate Bond USA High Income mutual fund One hundred puts of United States Oil Fund (ETF) 6-month certificate of deposit (CD) with the leftovercash Portfolio Citigroup USA High Income Mutual Fund USAA SHORT-TERM BOND United States Oil Fund (ETF) Certificate of Deposit Total Nos. 100 100 100 100 Price $ 51.58 $ 8.45 $ 9.20 $ 17.73 Value $ 5,158.00 $ 845.00 $ 920.00 $ 1,773.00 $ 1,304.00 $ 10,000.00 The target of the above exercise is to develop a diversified portfolio. The portfolio signified above, consists of both high growth stable asset in the form of Citigroup while the corporate bonds that have been selected are aggressive with short term viewpoint. It is important to note that the Citigroup has been considered as a hold stock whereas the certificate of deposits provides stability in the form of low return and risk associated with it. Significant investment i.e. around 10% of the total investment has been made in the CD. Overall the portfolio has the attributes that are required. Risk and Return Based on the article by Tuchman it can be said that the risk and return have direct relationship. This is to say that as the return associated with the particular investment increases the risk associated with such investment would be high. Investment in single security exposes the investors to such risks resulting in making the investment vulnerable. The article highlights three ways in which return in an investment can be maximized by minimizing the risk. It is important to note that the risk associated with an investment is linked to the volatility in the stock price. The three ways that have been suggested reduce such volatility. These have been discussed below Diversification: Investment in a number of portfolios diversifies the risk associated with single security. This is beneficial as with proper balance of securities in the portfolio the return can be maintained whereas the risk associated with the portfolios reduce significantly. Rebalance: In this the balance of the portfolio is maintained by selling or purchase of the stock based on their ability to generate the return. However it is important that significant and frequent changes may not be made to the portfolio as it will result in short selling and the investor will not be able to take the advantage of compounding. Compounding: This refers t reinvestment of the earnings from the returns that have been generated. It is important that this may be considered as the investment made with long term horizon. Investors with short term perspective tend to make loss whereas in the long run the investors tend to gain more. Interpreting Beta The beta of Citigroup is 1.84. The beta signifies the level of risk and volatility associated with the stock. It signifies the level of risk associated with the stock cannot be diversified. The two possible reasons for such high value of beta of Citigroup are as follows Firstly considering the size and the market share of the company it can be said that the company is having huge impact on the economy and as well is impacted by the changes in the economy. This is to say that a small change in the economic conditions will have greater impact on the company as the market share of the company is high. Another important factor that may be there for the high beta value of the company is the international business operations. The presence of the company in a number of international locations exposes it to greater returns and risks. The factors that contribute to the performance of the company may be applicable for various international markets. Thus particular factors may be impacting a company having it operations in USA only to a certain extent but will have greater impact on Citigroup due to its presence in many international markets. Calculating and Analyzing Portfolio Beta The portfolio Beta is calculated by calculating the weight of each of the component of the portfolio. This has been shown in the below table Portfolio Citigroup USA High Income Mutual Fund USAA SHORT-TERM BOND United States Oil Fund (ETF) Certificate of Deposit Beta 1.84 1.1 1.23 1.05 0.5 Weight 0.52 0.08 0.09 0.18 0.13 The beta of the portfolio is 1.41. It is significant that beta has been managed and Economic factors influencing investment decisions There are several economic factors that can impact the performance of the security. These include inflation, interest rate, tax, subsidy, income level etc. The two major factors are the inflation rate and interest rates. In both the cases the investment reduces due to reduced demands of the funds. Another impact of inflation can be seen with respect to the return on the investment that has been made. This is to say that in case the return on the investment is higher than the inflation rate, it would be beneficial. In other cases the inflation rate may be higher than return on the investment that has been made, the return will not be there. Similar is the case with interest rates. In case higher interest rate is provided for the savings, the investment return will not be considered by the investors. At the same time the increase in interest rates will increase the cost associated with the use of funds and thus the demand will be impacted. The investors with fixed income are impacted most by the increase in inflation and interest rates as the earnings are impacted with these factors. Thus both these factors are hindrance to the investors as inflation reduces the earnings whereas interest rates impacts the cost related to borrowings and mortgage interest payments. Overall investment is reduced in case of increase in interest rates due to higher incentive for saving rather than investing. In the present case the investment in certain securities in the portfolio will reduce and at the same time the deposits will increase where the fixed returns are there provided the return is higher than the inflation rate. Market Anomalies There are many theories that attempt to explain stock market behavior. There are certain market anomalies that contradict the efficient market hypothesis. These have been mentioned below Small firms outperform January Effect Low Book Value Neglected Stocks Day of the Week Trading Of the above anomalies January effect is associated with the performance of the stocks in the month of January following the underperformance in the fourth quarter. The reason that is provided for such anomaly is that the investors use the losses made in the investment as a result of underperformance by offsetting capital gains taxes. Excessive selling can put the stock in the range of buyers thereby boosting the demand. Thus overall there is excessive selling pressure before January and after January the buying pressure is there due to favorable price of the securities. Thaler (1987) conducted the study on this anomaly. It was concluded that the average return in the month of January exceeds the average return in other months of the year. This is actually true for many countries that were part of the study. However the relation with the capital gain tax isnt there. For example the capital gain tax isnt applicable in Japan but still the January effect could be noticed there. The study conducted by Tinic and West (1984) highlighted that January effect is more prominent in case of high risk stock and that these stocks have shown higher returns in the month of January in comparison to the other quarters. January effect is certainly one of the most prominent anomalies. Further its is important to note that in the study by Thaler (1987) it has been shown that it isnt only the statistical phenomenon but has been supported by suitable reasoning. Financial Statement Review The financial statement analysis has been performed based on the annual reports for the last two fiscal years of the Citigroup. The three components i.e. profit margin, asset turnover, and leverage have been studied on how these contributed to the change in Return on Assets and Equity of the company. Firstly the three components are assessed individually. The net profit margin of the company which is the ratio of net profit to net sales made by the company has come down significantly. In the year 2013 this was in the range of 29% but reduced significantly in 2014 to 15% only. Considering the return on shareholders funds it can be said that the return has also come down significantly from 6.63% in 2013 to 3.45% in 2014. It is important to note that the return on assets has been significantly low in both the years. Lastly total asset turnover has been considered. In this there has not been significant change Considering the above discussion the various factors that contribute to the performance of the company are profit margin, asset turnover, and leverage. These aspects broadly provide an insight into the performance of the company. The other factors such as cash flow, liquidity and financial costs are indirectly affected by these factors only. Firstly considering the profit margin, it has reduced significantly. Profit margin has direct influence on the net profit margin, return on assets and return on equity. Thus the fall in the net profit of the company has deteriorated the performance of the company. Thus the profit margin has significant impact on the performance of the company. The leverage is another important aspect. It is significant to note that equity employed is quite low in comparison to liabilities of the company which majorly includes the debt. Thus it can be said that the assets that have been developed are majorly contributed by the debt employed by the company. Three important findings that have been discussed above are that there has been huge fall in the net profit margin, the return to shareholders fund has declined but the asset to shareholdings has not witnessed much change. From these aspects it can be said that the net profit margin and sales have been the major factors that have impacted return on assets and the return on equity. This is because net profit margin is driven to a certain extent by the sales and the return on assets and shareholders equity is directly affected by the net profit margin Bond Valuation The interest rate of 5% is used in discounting. The value of Moody's Seasoned AAA Corporate Bond is considered. The long term average for this bond is 7.23%. Certain assumptions have been made in order to calculate the value of bond. This includes the value to maturity and the years to value. The value to maturity is taken as $100 whereas the years to maturity is taken as 5 years. The calculations have been shown in the below table Year 1 2 3 4 Coupon 7.23 7.23 7.23 7.23 PV Value 6.886 6.558 6.246 5.948 Total 103.98984 The current value of the bond is being sold at discounted price as the current yield is lower than the value of the bond. The bond value is taken as the coupon payments that will be made and the value of the bond at maturity. The factors that have an impact on the performance of the bonds are the interest rate and the inflation rate. As the interest rates increase the price of the bonds come down. However apart from this there may be other factors as well. These include credit ratings and inflation. The inflation rate has similar affect as that of the interest rates. On the secondary level exchange rate also has an effect on the bond valuation. This is because as the exchange rate will come down the interest rate will be increased and thus the price of the bonds will come down. Lastly the credit rating means the ability of the company to pay back to the creditors. As the credit rating improves the bond prices increase whereas the fall in rating reduces the bond price. Fixed Income Securities The five type of risks that have been highlighted are interest rate risks, purchasing power risks, Financial Risk, Liquidity Risk and the Call Risk. It is important to note that all the risks do impact the performance and return of investment. However interest rate risk is one of the major factors that has to be considered. Based on this the target should be to mitigate other risks as well. This is to say that interest rate risk will aggravate the effect f other risks as well. For example, the increase in interest rates will reduce the price of bonds thus leading to liquidity risk whereas the decrease in the interest rates will lead to increase in bond prices leading to purchasing power risks. Thus proper balance will have to be made considering the interest rate risk and thus managing the other risks accordingly. It is important to note that the inverse will not be there i.e. liquidity risk or purchasing power risk leading to bond volatility or the interest rate risk. Thus it is important to consider this interest rate risk in the investment being made. Bond Analysis The yield to maturity of the most recently issued US treasury for various maturities has been shown below Based on this the yield curve has been prepared and shown below The above yield curve shows that in the long run the interest rates have increased in comparison to the short run. This is to say that the 3 month, 6 month and one year yield is lower than 5 year, 10 year and 20 year yield. This is done in order to safeguard the interest of the lenders considering the default by the borrowers. In case the yield to maturity comes down, the earning of the investors is lower. This will be shown by lowering of the yield to level below the rate based on based on higher return rate. The other case is that of getting closer to the maturity date. As seen above the yield is lower for the shorter period. Since the chances of default be lower the yield will reduce as the bond gets one year closer to its maturity. Lastly in case the market interest rates increase, the chances of default will increase. The interest of the bonds will increase thereby resulting in higher yield as the risk of default will increase. Using Black-Scholes to Value Options The Black-Scholes model to Value Options is shown below According to the above formula with the call premium being function of strike price, it will be dependent on the strike price. Considering all factors to be constant the call premium can be said to be directly related to the strike price. Thus with the strike price increasing the second part of the formula will increase there by reducing the call premium. In other words high value of strike price the premium will reduce. Future Contract Price Analysis To conduct the analysis for the future contract Gold futures is being considered. The current value of the Gold future is $1217.40. One year ago the future price of Gold futures was $1287.40. Based on the market conditions suppose the future contract was purchased at $1300. The investment that is made is $1,000. Also the loss that is made is of $12.6. Since there will be 100 shares in one lot, the loss will be of $1260. Considering this it can be said that loss will be made. This is because the future price is reducing. The future contract were purchased assuming that the gold price will go up. However it has come down. But since the contract has been made the future contract will be purchased. However if the same is sold in the market it will fetch only $1217.4. This will result in greater loss. But considering the future contract the loss will be of $1000 and $1260 i.e. $2260. It can be said that in near future the price of gold will go up. This is because the fall in gold price might be the result of profit booking. However the timing would be a factor and if one buys the future contract the profitability will be there as the markets will recover from the current position. It can be said that there is extensive fall in the prices and that the gold future market will recover. If futures contract value decreases to $1,217.40 an ounce ($4,540) -106.9% ($1,180) - 100% Portfolio Protection using Options In case of the anticipation that the stock in the portfolio will experience a significant decline within the next three months, different strategies can be potentially used to take advantage of to protect portfolios value. One of the strategies is to sell the call option. This will reduce the loss made on the stock. This will be beneficial as call option can be used even if the stock is not owned. In such a scenario if the stock price is $32 and the stock price falls to $30. In case of 100 shares call option the gain on call option is $100 whereas loss on 100 shares will be $200. Thus the net loss will be $100. In such a way the loss can be reduced. This is also called covered call option. The second option that is available is the short put. In case the trading price of the stock s $42.50. In such a case if the strike price is $40 it can be sold for $2.50. This will credit of $250 for100 shares. Thus in the worst case scenario $4000 will be paid but the advantage of $250 will be there. Thus it will assist in minimizing the loss in case share value comes down. The two strategies that have been discussed above are related to call and put strategies in options. The viewpoint of both the strategies is to minimize the loss that can occur. Mutual Fund Fees There are many factors to consider when selecting mutual funds for a portfolio. One factor is the fees associated with owning the mutual fund. The US High income mutual fund has an expense of 0.98%. Comparing it to the yield and returns i.e. 5.58% and 8.38% respectively it can be said that the expenses are on the higher side. It is important to note that the fee s based on the asset value rather than the returns, So there might be the cases wherein returns are lower and still the fee is paid. In the present case it may not be reasonable to say that the fee is paid as the returns are not high on this mutual fund. If the fee is a very large 2%, one will still going to pay that 2% even if the fund stays flat. If the fund drops 30%, one will still going to be paying 2%. So, in some sense, one never pay for performance investors always pay for assets under management. Thus in the present case it may not be justifiable topay the expense and it may be wise to shift to another mutual fund which is offering high return i.e. performing good or expected to perform good with low expenses due to its low price. Asset Allocation One of the financial service companies has offered to invest in oil related stocks and options. It has been advised that the investment that has to be made in stock to be kept at 50% and in ETF it may be kept to 30%. In this way the investment in the certificate of deposits will not be there. Considering the above option that is given by the financial service company it can be said that it is the high risk portfolio. The rationale behind this investment is that the oil stocks are trading at low prices and this value is bound to increase in future. However it can be said that in the long term it may be more suitable to invest in stocks that are less volatile. The volatility related to oil stocks is higher in comparison to the banking stocks. However to gain returns it may be done that the investment in oil options may be done. In the current scenario all the components of the portfolio are quite stable thus selecting the oil stock for investment in ETF will be quite beneficial. This will increase the overall return of the portfolio. In comparison there will be small increase in the risks. However this return will be higher in comparison to the increase in risk. Evaluation of Portfolio Performance The stock that has been selected to be included in the portfolio, as shown above, is Citigroup. The company operates in the financial services industry. It is one of the oldest and largest financial service providers in USA. This is one of the strengths of the company as being in the industry for such a long time and having significant market share lends stability to the business of the company. Further the financial industry is the backbone of any economy. After the financial crisis there was a downfall in the market. However the stability of the economy is returning and the recovery of the economy is backed by strong financial support which is provided by the financial institutions. The company also has presence across various customers including consumers, corporations, governments, and institutions worldwide. The different services that are offered by Citigroup include traditional banking and commercial banking offering different services which include corporate, institutional, public sector, and high-net-worth clients. This segment provides wholesale banking products and services, including fixed income and equity sales and trading, foreign exchange, prime brokerage, derivative services, equity and fixed income research, corporate lending, investment banking and advisory services, private banking, cash management, trade finance, and securities services. Considering the above discussion it can be said that the stock has been quite stable having tremendous growth opportunities. Overall it is advisable to purchase the stock as it will benefit the portfolio in maintaining steady growth and at the same time reduced risk as Citigroup has significant market share with good business operations to boost the stock price movement. The table has been prepared showing the portfolio that has been developed based on the following criteria One hundred shares of Citigroup Inc. USAA short term Corporate Bond USA High Income mutual fund One hundred puts of United States Oil Fund (ETF) 6-month certificate of deposit (CD) with the leftovercash Portfolio Citigroup USA High Income Mutual Fund USAA SHORT-TERM BOND United States Oil Fund (ETF) Certificate of Deposit Total Nos. 100 100 100 100 Price $ 51.58 $ 8.45 $ 9.20 $ 17.73 Value $ 5,158.00 $ 845.00 $ 920.00 $ 1,773.00 $ 1,304.00 $ 10,000.00 The target of the above exercise is to develop a diversified portfolio. The portfolio signified above, consists of both high growth stable asset in the form of Citigroup while the corporate bonds that have been selected are aggressive with short term viewpoint. It is important to note that the Citigroup has been considered as a hold stock whereas the certificate of deposits provides stability in the form of low return and risk associated with it. Significant investment i.e. around 10% of the total investment has been made in the CD. Overall the portfolio has the attributes that are required. References Thaler, R.H. (1987). Anomalies The January Effect. Economic Perspectives. Volume 1. Number 1. Pp. 197-201. Available At: https://faculty.chicagobooth.edu/richard.thaler/research/pdf/seasonal%20movements%20i.pdf Tinic, S.M. West R.R., (1984). Risk and Return: January and rest of the year. Journal of financial Economics. Volume 13. Pp. 561-574 Graham, J. (n.d.). The Short Put Strategy - Selling Puts to Generate Income. Available At: https://discoveroptions.com/mixed/content/education/articles/shortputstrategy.html Petit, J. (n.d.). Applications in Real Options and Value-based Strategy. Available At: https://people.stern.nyu.edu/adamodar/pdfiles/eqnotes/opt3.pdf Bhattacharya H., (2004), Working Capital Management: Strategies and Techniques Green, R.P. Carroll. J.J. (2000). Investigating Entrepreneurial Opportunities:A Practical Guide for Due Diligence. Sage Publications Reily, F.K., Brown, K.C., Reily, J.R. Brown, P. (2011). Investment Analysis and Portfolio Management. Cengage; 10th edition Swensen, D.F. (2009). Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment. Simon Schuster; Rev Upd edition Malkiel, B.G. Ellis, C.D. (2013). The Elements of Investing: East Lessons for Every Investor. Publisher Collins-Wiley