Work in process

Examples of Work in process in the following topics:

• Inventory Types

  • Most manufacturing organizations usually divide their inventory into raw materials, work in process, finished goods, and goods for sales.
  • Work in process, WIP: Materials and components that have began their transformation to finished goods.
  • Optimal production management aims to minimize work in process.
  • Just-in-time (acronym: JIT) production is a concept to reduce work in process with respect to a continuous configuration of product.
  • Sometimes, outside of a production and construction context "work in process" is used erroneously where the status "work in progress" would be correctly used to describe more broadly work that is not yet a final product.

• Inputs to the Production Schedule

  • Production schedule can be divided into raw materials, work in process, finished goods and goods for resale.
  • A good only partially completed during the manufacturing process is called "work in process. "
  • Work in process, WIP - materials and components that have begun their transformation to finished goods.
  • Work in process (WIP) or in-process inventory includes the set at large of unfinished items for products in a production process.
  • Optimal production management aims to minimize work in process.

• Identifying Varying Conditions

  • Decisions relating to working capital and short-term financing are referred to as working capital management.
  • Management will use a combination of policies and techniques for the management of working capital.
  • Identify the level of inventory that allows for uninterrupted production but reduces the investment in raw materials and minimizes reordering costs and, hence, increases cash flow.
  • Besides this, the lead times in production should be lowered to reduce work in process (WIP) and similarly, the finished goods should be kept on as low level as possible to avoid over production.
  • Identify the four main areas of variability of working capital management

• Long-Term Approach

  • In most firms, there is little relationship between working capital and current operations.
  • This is particularly true in the service industry, where inventories may be relatively small or nonexistent.
  • The difficulty of associating working capital with the operating cycle is compounded by the way the concept of the operating cycle is applied in practice.
  • In short, the ability of a firm to meet its debts as they mature depends primarily on the outcome of projected operations.
  • Furthermore, nonliquid current assets become liquid sequentially - that is, from raw material inventories to work in process to finished inventories to accounts receivable to cash - but current liabilities become due simultaneously or at dates that are unrelated to each other.

• Just-in-Time Technique

  • Just in time (JIT) is a production strategy that strives to reduce in-process inventory and carrying costs in a manufacturing system.
  • Just in time (JIT) is a production strategy striving to improve a business return on investment by reducing in-process inventory and associated carrying costs.
  • To meet JIT objectives, the process relies on signals or Kanban between different points in the process.
  • Having employees trained to work on different parts of the process allows companies to move workers where they are needed.
  • Production scheduling and work hour consistency are synchronized with demand.

• Adjusting Capacity

  • This involves capacity planning and management that will keep a firm from growing too fast in sales and making sure it is utilizing capital in the most efficient way possible.
  • Capacity planning is the process of determining the production capacity needed by an organization to meet changing demands for its products.
  • In the context of capacity planning, "design capacity" is the maximum amount of work that an organization is capable of completing in a given period.
  • "Effective capacity" is the maximum amount of work that an organization is capable of completing in a given period due to constraints such as quality problems, delays, material handling, etc.
  • The decision makers at the firm will be able to adjust this capacity in order to grow the firm in a way they feel is optimal.

• Overview of Investment Banking Functions in M&A

  • One of the main roles of investment banking in mergers and acquisitions is to establish fair value for the companies involved in the transaction.
  • Generally speaking, the work involved in finding a buyer includes writing a "Selling Memorandum" (a detailed sales document) and then contacting potential strategic or financial buyers.
  • In advising sellers, the investment bank's work is complete once another party purchases the business up for sale (i.e., once another party buys the client's company or assets).
  • However, many of these proposals do not work out; few firms or owners are willing to readily sell their business.
  • Investment banks, such as Barclays (the headquarters for which is pictured here), play a vital role in the mergers and acquisitions process.

• Benefits of Inventory Management

  • Balancing these competing requirements leads to optimal inventory levels, which is an on-going process as the business needs shift and react to the wider environment.
  • Inventory management involves systems and processes that identify inventory requirements, set targets, provide replenishment techniques, report actual and projected inventory status, and handle all functions related to the tracking and management of material.
  • Female clerk doing inventory work using a handheld computer in a Tesco Lotus supermarket in Sakon Nakhon, Thailand.

• Calculating Expected Value

  • It is a derivation of working capital that is commonly used in valuation techniques, such as DCFs (Discounted Cash Flows).
  • Therefore, in this context, we calculate available working capital using the following formula:
  • We can find working capital by:
  • An increase in working capital indicates that the business has either increased current assets (that it has increased its receivables, or other current assets) or has decreased current liabilities, for example, has paid off some short-term creditors.
  • The common commercial definition of working capital for the purpose of a working capital adjustment in a mergers and acquisitions transaction (i.e., for a working capital adjustment mechanism in a sale and purchase agreement) is equal to:

• Reasons to Study Finance

  • There is a lot of talk of issuing bonds or pricing projects which belies how relevant finance is to everyday life, regardless of whether or not you have any desire of working in finance.
  • Finance plays a role in many of the stories in the news every day, which means that those who understand finance have a better grasp on how the events of the world affect them.
  • In order to invest, individuals must be able to do the same projections and valuations as companies in order to determine the best investment for their needs.
  • Of course, finance is an important field of study for those who have a desire of working in finance or accounting.
  • There are set processes and theories for determining which financial option is best, but in the real world, it is rare to have all of the information needed to be absolutely certain about what to do.