...ASSIGNMENT ON OPERATION RESEARCH ( FIN – 3104 ) 3RD YEAR , 1ST SEMESTER BBA – 3RD BATCH DEPARTMENT OF FINANCE JAGANNATH UNIVERSITY TOPIC Quantitative Analysis for Optimization : Using Linear Programming & Transportation Problem Group Name Name & ID No. of the Group Members: |Sl. No. |Name |ID No. | | | | | |01 |Suman Chandra Mandal (Group Leader) |091557 | | |Md. Nahid Islam |091604 | |02 | | | | | | | |03 |Mahbuba Mehreen |091619 ...
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...the use of financial leverage to complete the purchase of the target company. In order for a LBO to take place, an investor, private equity firms or financial sponsor is needed. In a typical LBO, the firm obtaining the company will finance the purchase with a mixture of debt and equity. A segment of the debt in a LBO is protected by the assets of the target company. New cash flows from the bought out business are then used to pay the debt from the buyout. Leveraged buyouts happen to companies of all sizes and in all different types of industries. However, some elements from possible target firms include; small debt loads, history of positive cash flows, a significant amount of tangible assets, the possibility of new management making improvements, and for valuation/stock price to be minimal. Debt financing is borrowing money from a source with the intent to pay back the principal plus an agreed upon interest. An advantage of debt financing is those who use it can maintain ownership. Corporate balance sheets typically use principal and interest payments as a business expense which can be deducted from income taxes. Often times, companies can use smaller interest rates on loans. Although the history of the first leveraged buyout is unclear, economists and historians believed that the first leveraged buyout occurred after World War II. After the Great Depression, corporate leaders assumed best to keep corporate debt low. Consequently, for the next few decades very...
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...Nabisco 1. Valuation: See attached (Note: done in accordance with valuation of LBO Inc. in the course packet, page 13, Exhibit 1 in “A Note to Capital Cash Flow Valuation”) The first task is to determine the free cash flow. It’s given to us in the case and is the amount of cash that the firm can payout to investors after making all investments. Simply defined as: FCF=EBIT(1-t)+Depreciation-Capex-NWC From that we can add the interest expense and that gives us the capital cash flow. Now we have to that determined, we need to focus on finding the discount rate, r, that we need to discount the cash flows. This is done one of two ways through the weighted cost of capital, where we have to look at the capital structure of the firms. For for Nabisco this can be a little challenging because the capital structure changes and we would need to recalculate WACC every time. To avoid this problem we can use CAPM: Ra=rf+βa(rm-rf) We know the risk free rate=9%, and we can assume that risk premium=~6% because in most cases the premium is usually less than the risk free rate. Now we have to determine the asset beta. Where βa=βd(D/V) + βe(E/V). We know that Nabisco is not highly levered and so we can assume that βd=0, we need beta of the asset is just a function of value of equity times it beta. βa=.67*(6038/((3884+6038))=.41 So we have all the components that we need to calculate discount rate: Ra=9%+.41(6%)= 11.5% Now we can find the present value of the cash flows using...
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...shares of the relevant firms are used to compute pre- and postmerger concentration measures, which give rise to presumptions of illegality. Using this approach to evaluate mergers in industries with differentiated, or closely related but not identical, products is problematic. In many cases the product offerings make it difficult to define the relevant product (or geographic) market. Even if the relevant market can easily be defined, the computed concentration index provides a reasonable standard by which to judge the competitive effects of the merger only under strong assumptions.1 To deal with these challenges, a new methodology to evaluate mergers has been developed. 2 The basic idea consists of ‘‘front-end’’ estimation, in which demand functions and possibly supply relations are estimated, and a ‘‘back-end’’ analysis, in which the estimates are used to simulate the postmerger equilibrium. This...
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...9-913-574 JUNE 11, 2013 FRANK V. CESPEDES HEATHER BECKHAM Launching Krispy Natural: Cracking the Product Management Code “Krispy Natural will provide Pemberton with its next generation blockbuster product and provide the foothold we need to dominate the salty snack market. I am counting on you to make sure our roll-out is a success.” The words of Ashley Marne, executive vice president of sales and marketing at Pemberton Products, echoed in Brandon Fredrick’s mind. It was January of 2012 and Fredrick, a marketing director for Pemberton, was reviewing test market results for a new cracker product, Krispy Natural. Pemberton had just concluded market tests in Columbus, Ohio as well as three cities in the Southeast. Fredrick was delighted that the Columbus market share results were double what the company had projected. However, the Southeast results fell well below management’s expectations. It was a late Monday night and Fredrick sat in his office preparing for a meeting with Marne, his boss. She had asked for summary analysis of the test market results and a recommendation for taking Krispy Natural to market. As Fredrick sketched out his proposal, he worried how he would draw conclusions from test market data that was so disparate. Equally as troublesome was the fact that he questioned if Marne’s high expectations were realistic. Pemberton Products Pemberton was the snack food division of Candler Enterprises, a multinational beverage and snack goods manufacturer. The...
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...innovative culture is the direct engagement of clients in the innovation process. We highlight some of the ways that Bank of America achieves this. But first we’ll look at the role of innovation process in building brand loyalty. N Build Brand Equity Through Progressive Transformation Change can occur by redefining a problem or redefining a solution. According to Robert Sternberg, a leading creativity expert,1 creativity is the ability to redefine a problem. Innovation can be viewed as the ability to redefine a solution. Successful innovation is a process over time—one that typically happens in increments rather than leaps. Rarely is a single innovation a game changer. In banking, 90 percent of innovation focuses on core competencies (that is, business-as-usual innovation), seven percent on game-changing innovation MAY–JUNE 2009 within core competencies and only three percent on leaps that significantly shift the client experience. Outside of banking, an evolutionary approach to innovation is...
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...Chapter 1 Cost Accounting: Information for Decision Making Solutions to Review Questions Financial accounting is designed to provide information about the firm to external users. External users include investors, creditors, government authorities, regulators, customers, competitors, suppliers, labor unions, and so on. Cost accounting systems are designed to provide information to internal users (managers). This difference is important, because it affects the design of the systems. Financial accounting systems are based on standards or rules. This allows the user to compare the results of different firms. Managerial accounting systems do not require rules. Each firm is free to develop managerial accounting systems that best serve the needs of the decision makers (managers). B Providing cost information for financial reporting A Identifying the best store in a chain C Determining which plant to use for production The value chain is the set of activities that transforms raw resources into the goods and services end users purchase and consume. The supply chain includes the set of firms and individuals that sells goods and services to the firm. The distribution chain is the set of firms and individuals that buys and distributes goods and services from the firm. The customers of cost accounting are managers, from plant managers to the CEO. Value-added activities are activities that customers perceive as adding utility to the goods or services they purchase. Nonvalue-added...
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...plays an important role in organizational success, people have to understand the different definitions of marketing. People can strengthen their definition of marketing by providing examples of organizations that supports their definitions of marketing. Marketing has an impact on the organizational success or failure. Personally, marketing is everything involved in selling or placing a product for the public to purchase or use. Although this may seem like a vague answer, marketing covers such a wide area of a business that has to work within the other departments in the business. Marketing involves the planning, implementation, and evaluation of marketing plans as well as how the marketing plans will affect the financial, management, production, and HR departments. After researching marketing in the school library, I discovered several articles about what definition of marketing is. First article was by Paul Gerhold. Paul Gerhold states, “Marketing research is the function which links the consumer, customer, and public to the marketer through information--information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing performance; and improve understanding of marketing as a process” (1993). The second article was by Grönroos Christian. Grönroos Christian states, “Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange and satisfy...
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...BE440 BRAND MANAGEMENT ASSESSMENT COURSEWORK Brand extension (or stretching) is a strategic concept which relates to managing the brand portfolio. In addition, it can be understood as a process by which the practices of branding extend to social contexts beyond the traditional business domain. Critically analyse the purpose, implementation, advantages and disadvantages of brand extension. Illustrate your argument with at least two practical examples of brand extension. By Mr. Olan Kaewwichit Brand extension (or stretching) is a strategic concept which relates to managing the brand portfolio. In addition, it can be understood as a process by which the practices of branding extend to social contexts beyond the traditional business domain. Critically analyse the purpose, implementation, advantages and disadvantages of brand extension. Illustrate your argument with at least two practical examples of brand extension. Companies must carefully manage their brands. First, the brand’s positioning must be continuously communicated to consumers. Major brand marketers often spend huge amounts on advertising to create brand awareness and to build preference and loyalty. For examples, General Motors spends nearly $820 million annually to promote its Chevrolet brands. McDonald’s spends more than $660 million. (Top 100 megabrands by total measured advertising spending, 16 July 2001, p.s2.) Such advertising campaigns can help to create name recognition, brand knowledge and...
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...Question: Conduct a strategic analysis of Kraft Foods Company, with special emphasis on Value chain and National Diamond model Solution: Industry Overview Kraft Foods Inc operates in the food and beverages industry. The industry is constituted by those companies that involve in stages of activities from procuring the raw food material after harvest till the retail purchase. The activities involved are the processing of raw food materials, manufacturing, packaging the food products and distributing them. The products may be fresh, prepared foods, packaged foods, alcoholic and nonalcoholic beverages. All the products that are meant for human consumption except the pharmaceutical products belong to this industry. The dairy sector forms the largest part of the food industry. The baked and cereal items and chilled foods are the close second and third. In case of the beverages industry, it is divided into alcoholic and nonalcoholic segment. A vast of the alcoholic market is made up of beer, cider and other flavored alcoholic beverages. On the other hand, soft drinks, coffee, tea, juice and water constitute the nonalcoholic beverage market. The industry is highly competitive and fragmented. Though the competition is among few notable players, no player has a dominant position to dictate the price levels. The players rely largely on advertisements to promote their brand and secure the market position (Food and Beverages Industry Profile, 2009). Market size: With over 16.5...
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...Question: Conduct a strategic analysis of Kraft Foods Company, with special emphasis on Value chain and National Diamond model Solution: Industry Overview Kraft Foods Inc operates in the food and beverages industry. The industry is constituted by those companies that involve in stages of activities from procuring the raw food material after harvest till the retail purchase. The activities involved are the processing of raw food materials, manufacturing, packaging the food products and distributing them. The products may be fresh, prepared foods, packaged foods, alcoholic and nonalcoholic beverages. All the products that are meant for human consumption except the pharmaceutical products belong to this industry. The dairy sector forms the largest part of the food industry. The baked and cereal items and chilled foods are the close second and third. In case of the beverages industry, it is divided into alcoholic and nonalcoholic segment. A vast of the alcoholic market is made up of beer, cider and other flavored alcoholic beverages. On the other hand, soft drinks, coffee, tea, juice and water constitute the nonalcoholic beverage market. The industry is highly competitive and fragmented. Though the competition is among few notable players, no player has a dominant position to dictate the price levels. The players rely largely on advertisements to promote their brand and secure the market position (Food and Beverages Industry Profile, 2009). Market size: With over 16.5...
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... . . . . . ..5-7 SUCCESS………………………. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7-8 INTRODUCTION Kraft Foods was founded in 1903 by J.L. Kraft who began by buying cheese at wholesale markets in Chicago and then reselling it to local merchants in the area. Until 2012, Kraft Foods was primarily made up of three major businesses Kraft Foods, General Foods and Nabisco. Each of these businesses had gone through growth and mergers over the years and in 1995 the company was brought under the name of Kraft Foods and consolidated into one company. In 2004, Kraft Foods came to the realization that they needed one Enterprise Resource Planning (ERP) system to consolidate all of their business activities under one system for all locations within North America. Kraft Foods decided to implement SAP, which they had previously chosen for their manufacturing and distribution locations within Europe. SAP is a very popular ERP system that is generally used by large companies who are looking for a Best of Suite system to do a wide variety of functions. This case analysis will review the history of the SAP implementation at Kraft Foods including the innovation, people, processes, strategy and the overall success of the project. INNOVATION Kraft Foods was facing pressure from Wall Street because of their lack of a centralized ERP system which was preventing accurate and...
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...hardware, stationary, toys, gifts, pet products and clothing Sources of suppliers - Purchases from over a thousand suppliers - E.g. General Electronic, Colgate-Palmolive, General Mills, Johnsons & Johnson, Protector & Gamble, Kraft, Nabisco, Unilever, etc. Features and practices of the Store - Majority of the products can be restocked regularly. - Close out merchandise, not available for reorder - Special opportunity: cost below wholesale Strategies for keeping down costs of the Store - By using information technology to be enable to grow - Obviously require far more computing power - IT budget : still low level ( not surpass USD 5 million) - Using database management software licenses - Family oriented and run company (Weakness) - Actual cost vs. business value to the company - Change Programming background: programming system as better option - Close out items: 40 % of the product ( flow through the inventory only once) Greatest challenges - Launching the company's new distribution centre in Texas - Tight time constraint - revising the warehouse management system - aggressive growth plans of the company by developing relevant and appropriate software - Flexibility needed: inflexible rules would be hindrance to the business - Using Highjump package: can address all the major concerns related to the operation of new distribution centre, best result: quick implementation, high functionality, adaptability, interoperability with advanced automation technology...
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...AVON PRODUCTS, INC.: DEVELOPING A GLOBAL PERSPECTIVE INTRODUCTION “When the history of this organization is written,” noted James E. Preston, chairman and chief executive officer of Avon Products, Inc., in February, 1993, “a meeting last June in Florida of 60 managers from around the world may turn out to have been a watershed event. Our four days of brainstorming, debate and discussion brought to an end two years of research and examination of our basic businesses, and launched us on a new way of thinking about and managing those businesses.” Preston was excited about the new direction taking shape at Avon. The past several years had been difficult for the organization. Hostile takeover attempts plagued the firm during the 1980s. Avon sales volume in the United States and international markets showed little or no growth. Profit margins on many products declined due to price discounting by competitors. Turnover rates of sales representatives had increased. The corporate debt was referred to as “staggering” at $1.13 billion or 82.5% of total capital in 1988 (See Appendices A, B, and C). Preston was confident, however, that 1993 would be a year of improvement for the company, both in financial performance and in the progress made “repositioning ourselves as the woman’s company for the Nineties and beyond.” Avon’s research department informed management that corporate problems centered around image and market access. That shaped the agenda of the June, 1992, meeting in Florida:...
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...AVON PRODUCTS, INC.: DEVELOPING A GLOBAL PERSPECTIVE INTRODUCTION “When the history of this organization is written,” noted James E. Preston, chairman and chief executive officer of Avon Products, Inc., in February, 1993, “a meeting last June in Florida of 60 managers from around the world may turn out to have been a watershed event. Our four days of brainstorming, debate and discussion brought to an end two years of research and examination of our basic businesses, and launched us on a new way of thinking about and managing those businesses.” Preston was excited about the new direction taking shape at Avon. The past several years had been difficult for the organization. Hostile takeover attempts plagued the firm during the 1980s. Avon sales volume in the United States and international markets showed little or no growth. Profit margins on many products declined due to price discounting by competitors. Turnover rates of sales representatives had increased. The corporate debt was referred to as “staggering” at $1.13 billion or 82.5% of total capital in 1988 (See Appendices A, B, and C). Preston was confident, however, that 1993 would be a year of improvement for the company, both in financial performance and in the progress made “repositioning ourselves as the woman’s company for the Nineties and beyond.” Avon’s research department informed management that corporate problems centered around image and market access. That shaped the agenda of the June, 1992, meeting in Florida: How...
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