BUS600 Foundation of BM - Operation

As most of the companies outsource the manufacturing to overseas, operation sounds like an unattractive topic for MBA. But the fact is: how to secure, deal with OEM, make sure the quality being safe guard and the finished goods to be delivered on schedule is a very complicated task. Use outsourcing approach sometimes is just like how to deal with bank / lender on determining the timing you want to cash out the equity: you will never get the capacity to build the products at the time you feel most, but instead during the down turn subcons provide more than enough capacity when you don't need to leverage anymore. How to deal with subcons is what we call Supply Chain Management.

To determine whether to open an operation line is related to the profit margin and risk management. Keep in mind that the subcons charge you at least 30% or more per their manufacturing cost. This is the threshold to consider whether to open a production line. Of course case is not that simple, because most of companies are afraid of shipment cycle time delinquency that could cause the lost the business opportunities. Therefore, they prefer to outsource certain portions of business to subcons and mean while keep maximizing the utilization rate of their own facilities to drive the highest profit. Besides, how to sign the legal agreement with subons and make sure the company trade secrets will not leak out and to be used by the other competitors also need to well consider.

Operation involves 6 M’s of Capacity. My prefer order are:

Manpower (without good talent staffs nothing can be executed)

Method (only good forecast, schedule and calculation can run the line with best efficiency)

Message (Good coordination and team build before start the line)

Money (Capital need to be ready before open the line)

Machinery & Materials (fine tuning the equipments for pilot run and order materials for mass production)

BUS600 Foundation of BM - Finance

The initial funding for a start-up company can be from venture capital or bank at beginning. As more money requires for expanding the business, following alternatives will be considered: issuing stocks, selling bonds, weighting tax benefit by setting oversea branches. All these fund raising and financial strategies only serve one common goal: check & balance debt and equity to ensure the company have enough capitals for future growth and keep cash flow consistent in the long term.

Two major items I always consider for the decision of the investment:

• What’s the rate of return in the mid term and long term? If it’s not more than 5% I would rather just purchase mutual funds to save the headache.
• How stable the business model is and will it survive from the competition and keep a steady growth rate?

After that I check the company's fundamental financial strength, such as: book value, profit margin, return on revenue, P/E, long term debt to Capital ratio, quarterly cash flow and total of liquidity asset to make sure it indeed is safe to invest. Up to this point if you just want to invest at corporate bond, the above study should be enough, which in general rate of return is about 6~8% for corporate bonds.

As try to target higher margin of return by investing in stocks, further stock technical chart analysis will be required. This in general is more complicated because it does require to identify the right purchase / sell price by breakdown the volume per price segment, accumulate of money flow, momentum, 50/200 days moving average, overall economy trend, figure out the resistance & support and be patient on waiting the opportunity comes. Options in general is not a bad strategy for hedging your own stocks.

Rule of thumb for financial management and how to make the decision is: borrow money as interest is low, then utilize it to get best of rate of returns. As leverage the investment, always think the worst about what may occur and ensure you are capable to take care of it.

BUS600 Foundation of BM -- Economics

Economics is the only field in which two people can get a Nobel Prize for saying the opposite thing.

What is economics? Economics includes the study of labor, land, and investments, of money, income, and production, and of taxes and government expenditures. Economists seek to measure well-being, to learn how well-being may increase overtime, and to evaluate the well-being of the rich and the poor. Economists try to figure out what’s the equilibrium point for supply and demand of money with considering all the factors as list above.

M1: The most narrative measure of the domestic money supply that includes only money to be used for spending on goods and services. M1 includes currency, checking account balances and travelers' checks. This money measure is closely watched by financial observers because it is a key indicator of past and future Federal Reserve

M2 are primarily household’s holdings of savings deposits time deposits, and retail money market mutual funds.

GNP is the value of all final goods and services produced in the country. GDP is the gross measure of economic activity and the major indicator of economic performance. GNP is sum of Personal Consumption, Private Investment, Government Purchases and Net of Exports over Exports

GDP also call gross domestic income (GDI), which is the annual amount of goods and services produced in a country

Money X Velocity = Price Level X Real GNP

Other key statistic economic indicators published at monthly basis are: Retail sales, Consumer confidence, Product Price Index (monitor inflation), Employment statistics, Personal income, Factory orders & Durable goods, Housing Starts, Purchasing Manager Index. Closely watch the trends of this index give very good indication of how healthy the economy is.

BUS 516 Entrepeurship -- Position Statement

Position Statement for AimRel Consulting Group

AimRel strives to provide the best value of our reliability and failure analysis to fully satisfy the need of our customers in semiconductor industry. We position ourselves on the following service categories:

IC design houses with revenue between $20M to $500M.

Provide the customer-oriented & Integrated Service in the following segments

Reliability Test & Risk Assessment

• Industry specific qualification, Wafer level reliability test, Simulation of device degradation
• Calculate and Explain Reliability Test Result for Risk Assessment

Failure Analysis Service

• Electrical signature analysis, physical analysis, reverse engineering and non-destructive analysis

Quality & Reliability Company System Level Service

• Proficient on Automotive, Telecom and Military product qualification procedures

AimRel’s ultimate goal is to provide the greatest benefit our customers and do no harms to our sociality based on the uncompromising professional expertise and Integrity. We believe the way to make AimRel great is our people and excellent knowledge on solving the customer concerns.