Essay On Definitions

Time Value of Money (TVM) represents a concept that money available today are worth more than the same amount of money available in the future, because money can earn interest. Therefore, according to the TVM idea, the sooner the money is received, the more it is worth (Investopedia, n.d.).
Efficient market theory states that all information relevant to a particular stock on the market is reflected in its price, and no investor can benefit from earning an abnormal return by exploring buying and selling market opportunities (Levy, & Post, 2005).
In the primary asset market, newly issued financial assets are sold for the first time. Previously issued financial assets are sold in the secondary market. Therefore, when a company releases a financial asset, for example, a stock, it is first sold to public in the primary market. Then, the original purchaser may re-sell it in the secondary market. As a result, operations on the secondary market have no major impact on the firm that initially issued the assets (Hall, & Lieberman, 2010).
The concept of risk-return trade-off states that a higher rate of return should be expected when facing a higher level of risk. As a result, investors and managers must assess the rewards associated with a certain decision against potential level of risk they incur when making it (Baker, & Powell, 2005).
Agency refers to the relationship between the principal and the agent. The agent acts on behalf of the principal according to the contractual agreement, and must not have a conflict of interest when performing his duties (Peng, 2009).
Information available on the market affects security prices due to the risks associated with owning them. In some cases, an information asymmetry can occur. In such situation, one party, either the seller or the buyer, has more information than the other party does. As a result, it is potentially harmful due to the possibility that the party that is more informed will take advantage of the other party, which lacks information (Barucci, 2003).
Lean and agile principles represent the two key philosophical and practical approaches to manufacturing and management. Lean principles are focused on minimizing waste and providing value to the consumer throughout the whole supply chain. Agile principles revolve around maximum responsiveness and quick adaptation to rapidly changing environment (Slack, Chambers, Johnston, & Betts, 2009).
Return on investment (ROI) represents a measure of an investment’s attractiveness and efficiency. It is calculated by diving a return of a certain investments by the total costs associated with this investment. The higher the ROI, the more attractive the investment (Koontz, Weihrich, 2008).
Cash flow is a movement of money that changes a cash balance during a certain period. Cash flow that is available for distribution to all investors of a company is called free cash flow. Companies have two main sources of value: value of operations and value of non-operating assets. Value of operations is the primary source of value for the majority of companies. Free cash flow is formed by a company’s operations, so the present value of expected free cash flow discounted by the weighted average cost of capital equals the value of company’s operations. Secondary source of value is generated by non-operating (financial) assets (Ehrhardt, & Brigham, 2014).
In order to define project management, it is first important to state the definition of project. A project is a temporary group activity directed at producing a unique product, result or service. Consequently, project management is the application of techniques, skills and knowledge to execute projects efficiently and effectively (Project Management Institute, n.d.).
In an organizational context, outsourcing means choosing to purchase goods or services from another party rather than producing them internally. Off-shoring is similar, but refers to purchasing goods or services specifically from a party based outside a company’s own country (Slack, Chambers, & Johnston, 2010).
Inventory turnover is a measure showing how quickly a company sells its products. It is calculated by dividing cost of goods sold by the ending inventory balance. The result is denominated in times, and indicates how many times per year a firm sells out its inventory (Graham, & Smart, 2012).
Just-in-time (JIT) inventory method is a system that originates from Japan and enables achieving high manufacturing productivity through substantial cost reductions. The key component of the JIT system is maintaining almost no inventory, meaning the supplier delivers the necessary parts and components “just in time” for the production line to assemble. Very similar, or even identical methods are called stockless production and zero inventory (Koontz, & Weihrich, 2007).
Vendor-managed inventory (VMI) represents an approach to order fulfillment and inventory where the supplier is responsible for replenishing and managing inventory. Generally, the basis for decision making from the supplier’s side is agreed with the retailer, and depends on the sales information provided by the retailer (Harrison, & Van Hoek, 2008).
Forecasting is a major component of demand management, because is vitally important to assess the amount, time, and place of purchase of products by the customers, in order to replenish the stock in a timely and efficient manner. Obviously, it is incredibly hard to estimate the exact amount of products that will be required, so the key to effective forecasting in demand management is to minimize the difference between the actual and forecasted demand. Goals and strategies relevant to forecasting demand are reflected in sales and operation planning process (Coyle, Langley, Novack, & Gibson, 2013).

References

Baker, K. H., & Powell, G. E. (2005). Understanding Financial Management: A Practical Guide. Oxford: Blackwell Publishing
Barucci, E. (2003). Financial Markets Theory: Equilibrium, Efficiency, and Information. London: Springer
Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. J. (2013). Supply Chain Management: A Logistics Perspective. (9th ed.). Mason, OH: Cengage Learning
Ehrhardt, M. C., Brigham, E. F. (2014). Corporate Finance: A Focused Approach. (5th ed.). Mason, OH: Cengage Learning
Graham, J. R., & Smart, S. B. (2012). Introduction to Corporate Finance. (3rd ed.). Mason, OH: Cengage Learning
Hall, R. E., & Lieberman, M. (2010). Microeconomics: Principles and Applications. Mason, OH: Cengage Learning
Harrison, A., & van Hoek, R. (2008). Logistics Management and Strategy: Competing Through the Supply Chain (3rd ed.). Essex: Pearson Education
Koontz, H., Weihrich, H. (2008). Essentials of Management. (3rd ed.). New Delhi: Tata McGraw-Hill
Levy, H., & Post, T. (2004). Investments. New Jersey, NJ: Prentice Hall
Peng, M. (2009). Global Strategy. (2nd ed.). Mason, OH: Cengage Learning
Slack, N., Chambers, S., & Johnston, R. (2010). Operations Management. (6th ed.). Essex: Pearson Education
Slack, N., Chambers, S., Johnston, R., & Betts, A. (2009). Operations and Process Management: Principles and Practice for Strategic Impact. (2nd ed.). Essex: Pearson Education
Time Value of Money – TVM. Retrieved from http://www.investopedia.com/terms/t/timevalueofmoney.asp
What is Project Management?. Retrieved from http://www.pmi.org/About-Us/About-Us-What-is-Project-Management.aspxt