ENGINEERING ECONOMICS Introduction - Economics - Scope and Definition - Importance of Economics in Engineering - Economic optimization- Demand and Revenue

Analysis - Law of Demand Demand Forecasting -Methods of Demand Forecasting - Demand curves - Factors affecting Demand - Demand Elasticity - Production Analysis - simple problems.

Economics is the social science that analysis production, distribution and consumption of goods and services Economic analysis may be applied throughout society, as in business, finance, health care It classifies into micro economics and macro economics Microeconomics examines the behavior of basic elements in the economy, including individual agents (such as households and firms or as buyers and sellers) and markets, and their interactions. Macroeconomics analyzes the entire economy and issues affecting it, including unemployment, inflation, economic growth, and monetary and fiscal policy.

Alfred Marshall provides a still widely cited definition in his textbook Principles of Economics (1890) that extends analysis beyond wealth and from the societal to themicroeconomic level: Economics is a study of man in the ordinary business of life. It enquires how he gets his income and how he uses it. Thus, it is on the one side, the study of wealth and on the other and more important side, a part of the study of man.

Lionel Robbins (1932) developed implications of what has been termed "perhaps the most commonly accepted current definition of the subject"

Scope of Economics Scope means the sphere of study. We have to consider what economics studies and what lies beyond it. The scope of economics will be brought out by discussing the following. a) Subject matter of economics. b) Economics is a social science c) Whether Economics is a science or an art?

d) If Economics is science, whether it is positive science or a normative science?

a) Subject matter of economics: Economics studies mans life and work, not the whele of it, but only one aspect of it. It does not study how a person is born, how he grows up and dies, how human body is made up and functions, all these are concerned with biological sciences, Similarly Economics is also not concerned with how a person thinks and the human organizations being these are a matter of psychology and political science. Economics only tells us how a man utilizes his limited resources for the satisfaction of his unlimited wants, a man has limited amount of money and time, but his wants are unlimited.

(B) Economics is a social Science: In primitive society, the connection between wants efforts and satisfaction is close and direct. But in a modern Society things are not so simple and straight. Here man produces what he does not consume and consumes what he does not produce. When he produces more, he has to sell the excess quantity. Similarly he has to buy a product which is not produced by him. Thus the process of buying and selling which is called as Exchange comes in between wants efforts and satisfaction.

Consumption- the satisfaction of wants. Production- i.e. producing things, making an effort to satisfy our wants Exchange- its mechanism, money, credit, banking etc. Distribution sharing of all that is produced in the country. In addition, Economics also studies Public Finance

Thus we can say that the subject-matter of Economics is

c) Economics, a Science or an Art? Let us first understand what is terms science and arts really means. A science is a systematized body of knowledge. A branch of knowledge becomes systematized when relevant facts have been collected and analyzed in a manner that we can trace the effects back to their and project cases forward to their effects. In other words laws have been discovered explaining facts, it becomes a science, In Economics also many laws and principles have been discovered and hence it is treated as a science. An art lays down formulae to guide people who want to achieve a certain aim. In this angle also Economics guides the people to achieve aims, e.g. aim like removal poverty, more production etc. Thus Economics is an art also. In short Economics is both science as well as art also.

d) Economics whether positive or normative science: A positive science explains ''why" and "wherefore" of things. i.e. causes and effects and normative science on the other hand rightness or wrongness of the things. In view of this, Economics is both a positive and. normative science. It not only tells us why certain things happen, it also says whether it is right or wrong the thing to happen. For example, in the world few people are very rich while the masses are very poor. Economics should and can explain not only the causes of this unequal distribution of wealth, but it should also say whether this is good or bad. It might well say that wealth ought to be fairly distributed. Further it should suggest the methods of doing it.

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2.

Engineering economics, previously known as engineering economy, is a subset of economics for application to engineering projects. Engineers seek solutions to problems, and the economic viability of each potential solution is normally considered along with the technical aspects. Engineering economy involves the evaluation of the costs and benefits of proposed projects

3. There are lots of factors that are considered in making Decisions 4. These factors are combinations of economic and noneconomic ones 5. Engineers play a major role in investment by making decisions based on economic analysis and design Considerations

6. Thus, decisions often reflect the engineers choice of how to best invest funds by choosing the proper alternative out of a set of alternatives

Economic optimization means best use of available scarce resources in such a way that the satifaction level is maximum..so we can say minimum usage of resources and maximum level of output.

ECONOMIC OPTIMIZATION PROCESS

Optimal Decisions Best decision produces the result most consistent with managerial objectives. Maximizing the Value of the Firm Produce what customers want. Meet customer needs efciently. Greed vs. Self-interest Self-indulgence leads to failure. Customer focus leads to mutual benet.

The law of demand states that the quantity demanded and the price of a commodity are inversely related, other things remaining constant. If the income of the consumer, prices of the related goods, and preferences of the consumer remain unchanged, then the change in quantity of good demanded by the consumer will be negatively correlated to the change in the price of the good. There are, however, some possible exceptions to this rule

1. Giffen goods: Some special varieties of inferior goods are termed as Giffen goods. Sir Robert Giffen or Ireland first observed that people used to spend more their income on inferior goods like potato and less of their income on meat. But potatoes constitute their staple food. When the price of potato increased, after purchasing potato they did not have so many surpluses to buy meat. So the rise in price of potato compelled people to buy more potato and thus raised the demand for potato. This is against the law of demand. This is also known as Giffen paradox.

2. Conspicuous Consumption: This exception to the law of demand is associated with the doctrine propounded by Thorsten Veblen. A few goods like diamonds etc are purchased by the rich and wealthy sections of the society. The higher the price of the diamond the higher the prestige value of it. So when price of these goods falls, the consumers think that the prestige value of these goods comes down. So quantity demanded of these goods falls with fall in their price. So the law of demand does not hold good here.

3. Conspicuous necessities: Certain things become the necessities of modern life. So we have to purchase them despite their high price. The demand for T.V. sets, automobiles and refrigerators etc. has not gone down in spite of the increase in their price. These things have become the symbol of status. So they are purchased despite their rising price. These can be termed as U sector goods.

4. Ignorance: A consumers ignorance is another factor that at times induces him to purchase more of the commodity at a higher price. This is especially so when the consumer is haunted by the phobia that a high-priced commodity is better in quality than a low-priced one

5. Emergencies: Emergencies like war, famine etc. negate the operation of the law of demand. At such times, households behave in an abnormal way. Households accentuate scarcities and induce further price rises by making increased purchases even at higher prices during such periods.

6. Future changes in prices: Households also act speculators. When the prices are rising households tend to purchase large quantities of the commodity out of the apprehension that prices may still go up. When prices are expected to fall further, they wait to buy goods in future at still lower prices. So quantity demanded falls when prices are falling. 7. Change in fashion: A change in fashion and tastes affects the market for a commodity.

Demand forecasting is the activity of estimating the quantity of a product or service that consumers will purchase. Demand forecasting involves techniques including both informal methods, such as educated guesses, and quantitative methods, such as the use of historical sales data or current data from test markets.

1. Methods that rely on qualitative assessment Forecasting demand based on expert opinion. Some of the types in this method are, Unaided judgment Prediction market Delphi technique Game theory Judgmental bootstrapping Simulated interaction Intentions and expectations surveys Conjoint analysis jury of executive method

2. Methods that rely on quantitative data Discrete Event Simulation Extrapolation Reference class forecasting Quantitative analogies Rule-based forecasting Neural networks Data mining Causal models Segmentation

3.some of the other methods a) time series projection methods this includes: moving average method exponential smoothing method trend projection methods b) casual methods this includes: chain-ratio method consumption level method end use method

Demand curves are used to estimate behaviors in competitive markets, and are often combined with supply curves to estimate theequilibrium price CHANGES THAT DECREASE DEMAND: Circumstances which can cause the demand curve to shift include: decrease in price of a substitute increase in price of a complement decrease in consumer income if the good is a normal good increase in consumer income if the good is an inferior good

Market or aggregate demand is the summation of individual demand curves. In addition to the factors which can affect individual demand there are three factors that can affect market demand (cause the market demand curve to shift): a change in the number of consumers, a change in the distribution of tastes among consumers, a change in the distribution of income among consumers with different tastes. Some circumstances which can cause the demand curve to shift in include: Decrease in price of a substitute Increase in price of a complement Decrease in income if good is normal good Increase in income if good is inferior good

In economics, the demand elasticity refers to how sensitive the demand for a good is to changes in other economic variables. Demand elasticity is important because it helps firms model the potential change in demand due to changes in price of the good, the effect of changes in prices of other goods and many other important market factors. A firm grasp of demand elasticity helps to guide firms toward more optimal competitive behavior. Elasticities greater than one are called "elastic," elasticities less than one are "inelastic," and elasticities equal to one are "unit elastic."

Supply - Supply schedule - Law of Supply Elasticity of Supply - Cost and Supply Analysis - Types of Costs - Price and output Determination - Price Fixation - Pricing methods - Pricing Policies - Factors governing Pricing Policies - Break-Even analysis Estimation of Break-Even Point - Usefulness of BEP - Limitations - simple problems.

supply is the amount of some product producers are willing and able to sell at a given price all other factors being held constant. Usually, supply is plotted as a supply curve showing the relationship of price to the amount of product businesses are willing to sell. Some of the more important factors affecting supply are the goods own price, the price of related goods, production costs, technology and expectations of sellers.

Supply Schedule: Just as goods are demanded by consumers, they are supplied by manufacturers or sellers. At any point of time quantity supplied by them is a function of the market price.

The law of supply is a fundamental principle of economic theory which states that, all else equal, an increase in price results in an increase in quantity supplied. In other words, there is a direct relationship between price and quantity: quantities respond in the same direction as price changes. This means that producers are willing to offer more products for sale on the market at higher prices by increasing production as a way of increasing profits.

Price elasticity of supply (PES or Es) is a measure used in economics to show the responsiveness, or elasticity, of the quantity supplied of a good or service to a change in its price or cost. The elasticity is represented in numerical form, and is defined as the percentage change in the quantity supplied divided by the percentage change in price

Fixed Cost Variable Cost Average Cost Marginal Cost

FIXED COST: Fixed costs are expenses that do not change in proportion to the activity of a business, within the relevant period or scale of production. For example, a retailer must pay rent and utility bills irrespective of sales. VARIABLE COST: Variable costs are expenses that change in proportion to the activity of a business. Along with fixed costs, variable costs make up the two components of total cost.

AVERAGE COST: Average cost is equal to total cost divided by the number of goods produced. MARGINAL COST: Marginal cost is the change in total cost that arises when the quantity produced changes by one unit.

The seller is price taker not a price maker JAVSONS AND HIS SUPPORTERS VIEW According to them price is always equal to the marginal Utility of a commodity under perfect competition Dr.Alfred Marshall of a commodity is determined by the interaction of its demand and supply both. Both are needed to determine the price of a commodity as both the blades of a scissors are needed to cloth.

Price fixing is an agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given level by controlling supply and demand. The intent of price fixing may be to push the price of a product as high as possible, leading to profits for all sellers but may also have the goal to fix, peg, discount, or stabilize prices.

Cost-plus pricing Target return pricing Value-based pricing Psychological pricing Fair pricing

Cost-plus pricing - Set the price at your production cost, including both cost of goods and fixed costs at your current volume, plus a certain profit margin. Target return pricing - Set your price to achieve a target return-on-investment (ROI). Target return pricing - Set your price to achieve a target return-on-investment (ROI).

Psychological pricing - Ultimately, we must take into consideration the consumer's perception of your price Fair pricing - Sometimes it simply doesn't matter what the value of the product is, even if you don't have any direct competition

Pricing policies include Average Wholesale Price (AWP), Wholesale Acquisition Cost (WAC), Direct Price (DP) and Federal Supply Schedule (FSS) 1) Average Wholesale Price (AWP): a) AWP is supplied for all packages in which the marketing firm reports a suggested average wholesale price. b) The AWP reported by Elsevier / Gold Standard is not intended to represent actual transaction prices and does not include prompt pay or other discounts, rebates or reductions in price.

2) Wholesale Acquisition Costs (WAC): a)The term Wholesale Acquisition Cost means, with respect to a drug or biological, the manufacturer's list price for the drug or biological to wholesalers or direct purchasers in the United States, not including prompt pay or other discounts, rebates or reductions in price, as reported in wholesale price guides or other publications of drug or biological pricing data. b) WAC price is populated for those manufacturers that report a WAC price.

3) Direct Price: a) Direct price is defined as the list price for a drug or biological to non-wholesaler customers, not including prompt pay or other discounts, rebates or reductions in price. b) Direct price is populated for those manufacturers that sell direct and report a Direct Price for their products.

4) Federal Supply Schedule is the multiple-award, multi-year federal contract which satisfies all federal contract laws and regulations, based on vendors business with commercial customers.

FACTORS AFFECTING PRICE INTERNAL FACTOR Marketing objective Marketing Mix Cost Organizational set up EXTERNAL FACTOR Market and demand Competition Other environmental factors

INTERNAL FACTOR:

1.) Marketing objectives: before setting the price the company has to keep in mind the marketing objective of the product. Whether the product is for high class, middle class or lower class. 2.) Marketing mix: price is one of the key elements of marketing mix. Other elements of marketing mix also affect the pricing decision. So the marketer must consider the marketing mix while setting the price.

3.)

Cost: cost forms the base for the price. A company must consider both fixed as well as variable cost while setting the price. 4.) Organizational set up: pricing decisions depends upon the organizational set up. In large scale organizations the price is decided by the product manager while in the small organization the price is decided by the top management.

EXTERNAL FACTOR:

1.) Market and demand: cost set the lower limit of the price. While the market and demand set the upper limit. So it is very necessary for the marketer to keep in mind the relationship between price and market & demand. 2.) Competition: pricing decision is affected by the act of competition. The marketer must keep an eye on the activities of the competitor. Some companies go for price leadership, while other goes for low pricing decision to wipe of the competitors from the market.

3.) Other environmental factors: while deciding the price of the product the company has to keep in mind the the other environmental factors also like: Economic conditions of the country like boom, recession, inflation etc. Consumer perception regarding the product. Government policy also affects the pricing policy. Distribution channel also have an effect on the price of the product.

Break-even analysis is a technique widely used by production management and management accountants. It is based on categorising production costs between those which are "variable" (costs that change when the production output changes) and those that are "fixed" (costs not directly related to the volume of production).

Step 1. Determine the per-unit selling price and direct costs of the product or service you provide. Direct costs are classified as the costs that go into creating the product or service (that is, direct materials and direct labor). Step 2. Calculate your contribution margin in dollars per unit. Once you know the selling price and direct costs of each product or service unit you sell, you can calculate your contribution margin in dollars per unit.

Step 3. Calculate your overhead costs. What are all the other costs you incur in your business that need to be covered before you can start earning a profit? Overhead costs include such things as insurance, indirect labor, rent, taxes, dues and subscriptions, advertising, office supplies and so on. Step 4. Determine your break-even point. Once you know your overhead costs, take that total number and divide it by your contribution margin in dollars per unit

Step 5. You need to recalculate your breakeven point on a regular basis. As your selling price, direct costs and indirect costs change, so will your break-even point.

Uses of a break even analysis: 1.Break even analysis enables a business organization to: Measure profit and loses at different levels of production and sales. To predict the effect of changes in price of sales. To analysis the relationship between fixed cost and variable cost. To predict the effect on profitablilty if changes in cost and efficiency. Even though break even has these advantages or uses, there are also several demerits of break even analysis.

Assumes that sales prices are constant at all levels of output. Assumes production and sales are the same. Break even charts may be time consuming to prepare. It can only apply to a single product or single mix of products.

Management - Definition - Functions Evolution of Modern Management movement Different Schools of Management - Types and Forms of Business Organization - Designing effective organizations - Individual ownership - Partnership - Joint stock companies Cooperative enterprises - Public Sector Undertakings

Management in all business and organizational activities is the act of coordinating the efforts of people to accomplish desired goals and objectives using available resources efficiently and effectively. Managementcomprises planning, organizing, staffi ng, leading or directing, and controlling an organization or effort for the purpose of accomplishing a goal. Resourcing encompasses the deployment and manipulation of human resources, financial resources, technological resour ces, andnatural resources.

According to Harold Koontz, "Management is the art of getting things done through and with people in formally organised groups. According to Peter Drucker, "Management is a multi-purpose organ that manages business and manages managers and manages workers and work."

The 4 basic management functions that make up the management process are described in the following sections: PLANNING ORGANIZING STAFFING DIRECTING CONTROLLING.

PLANNING: Planning involves choosing tasks that must be performed to attain organizational goals, outlining how the tasks must be performed, and indicating when they should be performed. ORGANIZING: Organizing can be thought of as assigning the tasks developed in the planning stages, to various individuals or groups within the organization. Organizing is to create a mechanism to put plans into action.

STAFFING: It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. DIRECTING: It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes.

CONTROLLING: It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals

U.S. INDUSTRIAL REVOLUTION

POWER GENERATION TRANSPORTATION COMMUNICATION

SCIENTIFIC MANAGEMENT

FREDERICK TAYLOR HENRY GANTT FRANK & LILLIAN GILBRETH

FREDERICK TAYLOR TIME STUDY STANDARDS FOR WORK JOB SPECIALIZATION MANAGERIAL PLANNING & CONTROL OF WORK WORKER SELECTION & TRAINING INCENTIVES HENRY GANTT GANTT CHARTS MODIFIED INCENTIVES INCENTIVES FOR FOREMEN FRANK & LILLIAN GILBRETH MOTION STUDIES (Therbligs) FATIGUE REDUCTION SUGGESTION SYSTEMS

ASSUMPTIONS Productivity is a workplace problem Managers should plan and direct the work of others Individuals are economically motivated CONTRIBUTIONS Scientific study of work (Time & Motion) Setting of work standards Use of incentives Careful selection & training of workers Division of labor---managers & workers Productivity & efficiency increased LIMITATIONS Social needs of workers overlooked Many studies werent very scientific Loss of self-control alienated workers Group dynamics were ignored

Classical School Behavioral School Management Science School

One best way to manage It is managements job to ascertain the best way to perform a job, then teach that method to workers. The same philosophy applies to running the organization (the managers job)

aka Human Relations School Genesis was in an experiment in Scientific Management

Management Science is NOT the same as Scientific Management Originated in the Polaris missile project

Types of business organisation The main types of business organisation in the private sector in the UK are: sole traders partnerships companies franchises.

1. SOLE TRADER: The sole trader is the most common form of business ownership and is found in a wide range of activities (e.g. window cleaning, plumbing, electrical work, busking). 2. PARTNERSHIP: An ordinary partnership can have between two and twenty partners. However, the Partnership Act of 2002 has made it legal for some forms of partnership e.g. big accountancy firms to have more partners who also enjoy limited liability. People in business part

3. COMPANIES:A company is owned by shareholders who appoint Directors to give direction to the business. The Chief Executive is the senior official within the company with responsibility for making major decisions. 4. FRANCHISING: In the United States almost half of all retail sales are made through firms operating under the franchise system like McDonald's which has a brand franchise. Franchising is becoming increasingly popular in this country.

Clear vision and priorities Cohesive leadership team Clear roles and accountabilities for decisions Organizational structure that supports objectives Organizational and individual talent necessary for success Performance measures and incentives aligned to objectives

Consider all five components of the wheel: A common misstep is to focus on structure alone (boxes and reporting lines) as the solution Align the five components to one another: One element that doesnt fit can limit the performance of the whole system Align strategy and organization to one another: Organizational strengths and weaknesses influence the range of feasible strategies; in turn, organizations should evolve with any new strategic direction

Individual Owners (Owners or Owner) include persons who, for their own account, as an owner of a company, as a general partner of a family partnership, or as trustee of a family trust, own or are charged with the responsibility of the management and supervision of royalty and mineral interests (producing and nonproducing), leasehold interests (working interests and overriding royalty interests), or surface interests, which are affected by oil, gas, and mineral exploration, development and production activities.

A business organization in which two or more individuals manage and operate the business. Both owners are equally and personally liable for the debts from the business. A partnership must file an annual information return to report the income, deductions, gains, losses, etc., from its operations, but it does not pay income tax.

A joint-stock company is a business entity which is owned by shareholders. Each shareholder owns the portion of the company in proportion to his or her ownership of the company's shares (certificates of ownership). This allows for the unequal ownership of a business with some shareholders owning a larger proportion of a company than others. Shareholders are able to transfer their shares to others without any effects to the continued existence of the company.

Cooperative enterprise may be defined as enterprise owned by the employees, not individually as investors but as a group, with membership in the group conditional only on employment. Cooperative enterprises also are directed by the employees through some sort of majoritarian processes. With cooperative enterprises as with democratic polities of other sorts, the ideal may not be fully realized in every case, and some of the most widely studied cases would best be described as semi-cooperatives.

Public sector undertakings are of two types, public sector units in which majority shares are owned by Union Government and public sector units in which majority shares are owned by State Government. Public sector undertakings i.e. enterprises in which majority shareholder is Government of Kerala are generally divided into Manufacturing & Non-Manufacturing. Some of the PSUs such as Kinfra, KSIDC, SIDCO etc. are promotional agencies.

MANAGEMENT OF HUMAN AT WORK Human Resource Development - Motivating individuals and workgroups - Leadership for Managerial Effectiveness - Team working and Creativity - Managerial Communication - Time Management - Performance Appraisal- Career Planning.

Human Resources Development (HRD) as a theory is a framework for the expansion of human capital within an organization through the development of both the organization and the individual to achieve performance improvement. Adam Smith states, The capacities of individuals depended on their access to education.The same statement applies to organizations themselves, but it requires a much broader field to cover both areas.

Motivating a group of people presents a challenge for small business owners. Every individual has different motivating factors and you may be faced with a group of people who each need to motivated in a different way. To get an entire group or team motivated to work on a project, special care must be paid to the motivating factors used and the individual personalities of the people who need to be motivated.

An individual has to be motivated in order to motivate others: A person cannot expect to motivate others if he/she is not individually motivated. To successfully evaluate what is needed to motivate others, it is pertinent to consider the type of person that might motivate you. Richard Denney states in his book, Motivate to Win, that if you want to motivate another person, you have to be motivated yourself.

Effective managerial leadership is complex, and it may involve many very different and distinct activities and actions by the leadermanager on the specific intervention, attitude, or trait that causes the manager to have influence on subordinates Managerial leadership development outcomes have traditionally focused on individual learning and skills without regard to organizational performance.

Teamwork is "work done by several associates with each doing a part but all subordinating personal prominence to the efficiency of the whole" . Teamwork involves working confidently within a group, contributing your own ideas effectively, taking a share of the responsibility, being assertive - rather than passive or aggressive, accepting and learning from constructive criticism and giving positive, constructive feedback to others.

Problems solving: A single brain cant bounce different ideas off of each other. Each team member has a responsibility to contribute equally and offer their unique perspective on a problem to arrive at the best possible solution. Accomplish tasks faster: A single person taking on multiple tasks will not be able to perform at a same pace as a team can. When people work together they can complete tasks faster by dividing the work to people of different abilities and knowledge.

Healthy competition: A healthy competition in groups can be used to motivate individuals and help the team excel. Developing Relationships: A team that continues to work together will eventually develop an increased level of bonding. This can help people avoid unnecessary conflicts since they have become well acquainted with each other through team work.

Creativity refers to the phenomenon whereby something new is created which has some kind of subjective value (such as an idea, a joke, a literary work, a painting or musical composition, a solution, an invention etc.). It is also the qualitative impetus behind any given act of creation, and it is generally perceived to be associated with intelligence and cognition. Creativity can also be defined "as the process of producing something that is both original and worthwhile" or "characterized by originality and expressiveness and imaginative".

Managerial communication is a function which helps managers communicate with each other as well as with employees within the organization. Communication helps in the transfer of information from one party also called the sender to the other party called the receiver. Managerial Communication helps in the smooth flow of information among managers working towards a common goal.

A successful manager is one who communicates effectively with his subordinates. It is really essential for managers to express their views clearly for the team members to understand what exactly is expected out of them. Usually there are two ways managers communicate amongst themselves and with their subordinates: (1) Verbal Communication (2) Written Communication

1. Verbal Communication: Communication done with the help of words is called as verbal communication. No written records are available in verbal communication. In verbal communication individuals need to be very careful about their speech. 2. Written Communication: Communication is also done through emails, letters, manuals, notices and so on. Such mode of communication where written records are available is often called written communication.

Time management is the act or process of planning and exercising conscious control over the amount of time spent on specific activities, especially to increase effectiveness, efficiency or productivity. Time management may be aided by a range of skills, tools, and techniques used to manage time when accomplishing specific tasks, projects and goals complying with a due date.

A performance appraisal (PA), performance review, performance evaluation, (career) development discussion,or employee appraisal is a method by which the job performance of an employee is evaluated. Performance appraisals are a part of career developmentand consist of regular reviews of employee performance within organizations.

A performance appraisal is a systematic and periodic process that assesses an individual employees job performance and productivity in relation to certain pre-established criteria and organizational objectives. Other aspects of individual employees are considered as well, such as organizational citizenship behavior,accomplishments, potential for future improvement, strengths and weaknesses, etc. To collect PA data, there are three main methods: objective production, personnel, and judgmental evaluation. Judgmental evaluations are the most commonly used with a large variety of evaluation methods.

Career planning is a subset of career management. Career planning applies the concepts of Strategicplanning and Marketing to taking charge of one's professional future The career planning process has four steps: Step 1: knowing yourself Step 2: finding out Step 3: making decisions Step 4: taking action

MODERN MANAGEMENT CONCEPTS Management by Objectives (MBO) - Principles and Steps - Advantages and Disadvantages Management by Exception (MBE) - Strategic management - SWOT analysis - Enterprise Resource Planning (ERP) - Supply Chain Management (SCM) - Activity Based Management (ABM).

Management by objectives (MBO), also known as management by results (MBR), is a process of defining objectives within an organization so that management and employeesagree to the objectives and understand what they need to do in the organization in order to achieve them. The term "management by objectives" was first popularized by Peter Drucker in his 1954 book The Practice of Management.

Some of the important features and advantages of MBO are: Motivation Involving employees in the whole process of goal setting and increasing employee empowerment. This increases employee job satisfaction and commitment. Better communication and coordination Frequent reviews and interactions between superiors and subordinates helps to maintain harmonious relationships within the organization and also to solve many problems. Clarity of goals Subordinates tend to have a higher commitment to objectives they set for themselves than those imposed on them by another person. Managers can ensure that objectives of the subordinates are linked to the organization's objectives. Everybody will be having a common goal for whole organization. That means, it is directive principle of management

Cascading of organizational goals and objectives Specific objectives for each member Participative decision making Explicit time period Performance evaluation and feedback

Organizational objectives reviewed MBO for the next operating period begins

Employee objective set

Achievers rewarded

Progress monitored

Performance evaluated

(1) MBO ensures better and more effective management. MBO forces management to think of planning for results, rather than merely planning activities. MBO also force managers to think how the objectives can be achieved and what resources would be required, MBO also provides the standards of control. All these lead to better management. (2) MBO results clarification in organisational roles and structure and responsibilities of individuals for achieving the goals. Thus various positions are treated as responsibility, authority and resources at their disposal. This process identifies and removes many deficiencies in the organisation. (3) It reveals organisational deficiencies such as overlapping of authority, ineffective delegation and communication.

(4) It elicits people's commitment for performance.

(5) It furnishes objectivity and reduces the element of pure judgment.

1. It presupposes fixing of individual goals and responsibilities. But all work in an organisation is a group effort where activities are so closely interrelated that no single individual can be blamed or rewarded, for any end result. 2. It is difficult to make comparative ratings of individuals because each individual's goals are different from those of others in terms of complexity, etc. 3. It is difficult to appraise and identify potential. MBO only deals with performance on the present job. 4. The method is extraordinarily time-consuming. 5. MBO presumes a certain level of trust throughout the hierarchy. But the organisational life teaches people to be cautious. This inhibits honest dialogue and appropriate goal setting.

Management by Exception is not entirely synonymous with the concept of exception management in that it describes a policy where absolute focus is on exception management, in contrast to moderate application of exception management. The purpose of the management by exception concept is to only bother management with the most important variances from the planned direction or results of the business.

Advantages of Management by Exception There are several valid reasons for using this technique. They are: It reduces the amount of financial and operational results that management must review, which is a more efficient use of their time. The report writer linked to the accounting system can be set to automatically print reports at stated intervals that contain the predetermined exception levels, which is a minimally-invasive reporting approach.

Disadvantages of Management by Exception There are several issues with the management by exception concept, which are: This concept is based on the existence of a budget against which actual results are compared. If the budget was not well formulated, there may be a large number of variances, many of which are irrelevant, and which will waste the time of anyone investigating them. The concept requires the use of financial analysts who prepare variance summaries and present this information to management. Thus, an extra layer of corporate overhead is required to make the concept function properly.

Strategic management analyzes the major initiatives taken by a company's top management on behalf of owners, involving resources and performance in internal and external environments. It entails specifying the organization's mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives.

Helpful To achieving the objective Intern al origin

Harmful To achieving the objective

STRENGTH

WEAKNESS

Extern al origin

OPPORTUNITIES

THREATS

SWOT analysis (alternatively SWOT Matrix) is a structured planning method used to evaluatethe Strengths, Weaknesses,Opportunit ies, and Threats involved in a project or in a business venture. A SWOT analysis can be carried out for a product, place, industry or person. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective.

Enterprise resource planning (ERP) systems integrate internal and external management of information across an entire organization embracing finance/accounting,manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an integrated software application. ERP facilitates information flow between all business functions inside the organization, and manages connections to outside stakeholders.

An integrated system that operates in real time (or next to real-time), without relying on periodic updates A common database, which supports all applications A consistent look and feel throughout each module Installation of the system without elaborate application/data integration by the Information Technology (IT) department, provided the implementation is not done in small steps

Supply chain management (SCM) is the management of an interconnected or interlinked between network, channel and node businesses involved in the provision of product and service packages required by the end customers in a supply chain. Supply chain management spans the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.

Supply chain management addresses the following problems: Distribution network configuration: the number, location, and network missions of suppliers, production facilities, distribution centers, warehouses, cross-docks, and customers. Distribution strategy: questions of operating control (e.g., centralized, decentralized, or shared); delivery scheme (e.g., direct shipment, pool point shipping, cross docking, direct store delivery, or closed loop shipping); mode of transportation

Trade-offs in logistical activities: The above activities must be coordinated in order to achieve the lowest total logistics cost. Trade-offs may increase the total cost if only one of the activities is optimized. Information: The integration of processes through the supply chain in order to share valuable information, including demand signals, forecasts, inventory, transportation, and potential collaboration. Inventory Management: Management of the quantity and location of inventory, including raw materials, work in process (WIP), and finished goods. Cash flow: Arranging the payment terms and methodologies for exchanging funds across entities within the supply chain.

Activity-based management (ABM) is a method of identifying and evaluating activities that a business performs using activity-based costing to carry out a value chain analysis or a re-engineering initiative to improve strategic and operational decisions in an organization. Activity-based costing establishes relationships between overhead costs and activities so that overhead costs can be more precisely allocated to products, services, or customer segments. Activity-based management focuses on managing activities to reduce costs and improve customer value.

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