Operations Management 1 - Resource & Workflow Layout
6h 40 min! Run Time
Employees
only
of Completion
What you'll learn
Description
There are no hard and fast rules for optimizing a company’s capital structure, companies that are strategic use an efficient combination of senior debt, mezzanine debt, and equity capital to minimize their true cost of capital. It's also important for a business owner to analyse the difference in value between an ownership interest in a stagnant or underperforming business and ownership in a growing company. Listed below are some of the equity and debt available to raise funds:
- Senior Bank Debt
- Subordinated Debt
- Shareholder Equity
- Quasi Equity
- Mezzanine Debt
Senior bank debt is the borrowed money that a company must repay first if it goes out of business. The lender holds claim to the borrower’s assets above all other debt obligations. The loan is considered senior to all other claims against the borrower, meaning the collateral can be sold to repay the senior debt holders first, followed by junior debt holders, preferred stock holders and common stockholders. This makes the senior bank debt a lower risk to the borrower and therefore a lower interest rate.
Subordinated debt is a debt that can only be claimed by an unsecure creditor, in the event of a liquidation, after claims of secured creditors have been met. Subordinated debt can be used for growth capital, acquisitions, recapitalizations, and management and leveraged buyouts. Subordinated debt holders need to ensure there is enough free cash flow to service the debt, since the debt is either unsecured or partially secured. Therefore, despite the high-interest rate on subordinated debt, if the business is flowing good, consistent free cash flow, it may be best to obtain subordinated debt rather than a pure equity injection.
Quasi-equity debt security (also known as revenue participation investment) is useful for enterprises that are legally structured non-profits and therefore cannot obtain equity capital. This type of security is a form of debt, but its returns are indexed to the organisation’s financial performance. If future expected financial performance is not achieved, a lower or possibly zero financial return is paid to the investor. Conversely, if performance is better than expected, then a higher financial return may be payable. Quasi-equity provides a more equal sharing of risk and reward between investor and investee.
System Requirements
See System Requirements in the Coggno Knowledge Base
Author
Operations Management 1 - Resource & Workflow Layout
Capacity planning falls under capacity management. It determines an organisation’s ability to meet the rigours of current and anticipated work by investing in their greatest asset: the resource pool. Capacity Planning is the determination and adjustment of an organisation’s ability to produce products or services to match demand. Capacity management is about matching capacity and demand. In many organisations, capacity does not evenly match demand. A campus book store has the bulk of its sales just prior to the start of each teaching period. For the remainder of the teaching period, sales are quite low. This is a significant mismatch in capacity because a college cannot afford to operate a large bookstore just to satisfy peak level demand and then remain idle from there on.
The management of short-to-medium capacity is not concerned with the details of individual products, but seeks to answer questions about how the budgeted output for the next year will be resourced and accomplished given the variations in demand. In order to do this effectively the organisation needs to look at demand broadly, summing different products into aggregate totals in order to obtain useful information at the budgetary level rather than the individual product level.
Understand how workflow ties together the processes, people, and resources that get work done in an organization.
What this course covers:
- What workflow is and how it evolved from manufacturing and office processes
- How work is separated into defined tasks, roles, rules, and procedures
- The move from manual processes to information-system automation
- Material, information, and business processes
- Planning and scheduling with in-full-on-time (IFOT) and batch approaches
A practical look at organizing and improving day-to-day operations.
Resource planning and control is about allocating resources and activities so a process runs efficiently and meets customer demand. This course looks at the key issues of short-term scheduling and planning.
What this course covers:
- Organizing and scheduling raw material supply so it is ready at start-up
- Scheduling and staffing workers across the process on time
- Arranging maintenance so equipment is checked and serviced beforehand
- Planning the output side, from finished goods storage to work-in-process handoffs
A practical look at making operating processes run smoothly.
Operations management is about designing and improving the systems that create and deliver a company's products and services, and doing it sustainably.
What this course covers:
- Sustainable operations and the triple bottom line of social, economic, and environmental goals
- Health and safety responsibilities in the workplace
- Work system factors such as temperature, lighting, ventilation, and noise
- How design, standards, and supply chain choices support safer operations
Useful for owners and managers building safer, more sustainable operations.
Choosing the right mix of debt and equity is one of the most important decisions a business makes when funding growth.
What this course covers:
See how each option affects the true cost of capital.