Recent Articles

Production

The act of building or providing service to the customer. Your traditional thinking is a plant producing widgets, but there is more to it than just this vision. There are work schedules, inventory control, and delivery. All of these are essential to the final customer smile.

Economies of Scale

02/07/2017

Of the basic business principles, economies of scale has the greatest impact on profitability over any other business principle.   As an enterprise’s investment is spread over higher volume the cost per unit of production decreases.   The [...]

Project Reports – Introduction

06/09/2015

There are basically three groups of financial based project reports.  Each set has its own priorities and purposes.  Project reports are a function of production reporting with the exception of the balance sheet set (commonly used for cash flow [...]

Up Time – Business Concept

05/21/2015

Up Time in business refers to maximizing opportunity to generate profit.  There is one key modifier.  If the marginal costs to generate revenue exceeds the revenue generated, the business is no longer maximizing profit. This article will explain [...]

Vertical Integration in Business

12/20/2014

Vertical integration in business refers to the process of gaining control over more steps of the product production stream.  Whenever a business obtains or can greatly influence any one of these steps along the process of producing and selling a [...]

Information Technology – Economic Forces at Work

12/09/2014

Have you ever wondered why technology is so expensive?  Why does the technology repairman charge more per hour than what many attorneys charge?  Why does it feel like you get nickeled and dimed to death with technology costs?   There are many [...]

Substitution Principle in Business

11/24/2014

There are a multitude of principles used in business, some are industry specific, others are functions of business.  But there is one that is a general principle that is used across the board in all areas of business.  It is called the [...]

Cost Drivers in Small Business

10/19/2014

The textbook answer defines cost drivers as those factors that determine the overall cost of operations.  As an example, in manufacturing the cost drivers may be processing time or number of steps to produce the product.  In service, the cost [...]

Fixed Costs – Explanation and Examples

02/19/2014

‘Fixed costs’ is a business term used mostly in cost accounting.  It has several meanings based on its usage.  The most common definition associated with fixed costs is expenses that must be paid regardless of production or sales volume.  The [...]

The Key Man

08/25/2013

One of the most misunderstood principles of business deals with the one or few individuals in a small business operation who are critical to operations.  This individual is referred to as the Key Man.  The best example is that of the primary wage [...]
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