An Overview of the Corporate Finance Essay Example Pdf - Free Essay Example

Sample details Pages: 8 Words: 2311 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Narrative essay Did you like this example? One of the most critical decisions that every organizations needs to make in order to test its feasibility in the market, is the financial decisions. Corporate finance is that area of finance which gives the business enterprises the means to analyse and make financial decisions. It has a major goal to maximize the value of the corporate and at the same time manage the risks that are associated with the same. Don’t waste time! Our writers will create an original "An Overview of the Corporate Finance Essay Example Pdf" essay for you Create order This discipline of corporate finance has majorly two different categories. They are long-term and short term categories. Decisions that are pertaining to capital investment include the choices of financing in equity or debt or to make payments in form of dividends to shareholders. The other form is the short-term decision making which is mainly concerned with balancing the working capital that includes current assets and current liabilities. In the present scenario, corporate finance has vast associations with investment banking. Today, an investment bank is used to make an evaluation of the financial needs of a firm and make means to provide for these needs. Corporate finance also varies from company to company. In US it talks about the techniques that are related to managing a companys finances where as in UK, it is more associated with investment banking. Nevertheless, the idea that the term carries includes all long and short term management of finance. (Corporate Finance, 2010) This paper deals with studying seven most significant areas of corporate finance, which help in a better understanding of investment decisions that a firm is required to make. They have been mentioned in the subsequent section. Basic Forms of Business Organizations There are basically four forms of business organizations. They have been mentioned as follows: Sole Proprietorship A business that is entirely managed by a single individual is termed as a sole proprietorship. It is not considered to be a legal entity. All the debts that are associated with the business is the sole responsibility of the individual who owns the business. The owner here has to file a personal income tax in course of running the business. Also, as the owner dies, the business terminated. It is also possible that the user sells his business and no longer remains the proprietor. General Partnership This is a form of business organization that is formed when two or individuals start a business for making profit. The percentage contribution of each of the partners corresponds to the profit share. All partners are equally responsible for the debts of the business and have to take responsibility of the actions of all involved in the partnership. The partnership incomes are also shown on the personal income tax returns of the partners. (Vernimmen, 2009) Limited Liability Company This is a more flexible for of a business organization where there are advantages of liability protection. Here the partners are not liable for the business debts. It is not appropriate for raising capital or for becoming public. It is associated with many periodic filings with the sate hence is more difficult to function as compared to a general partnership. Corporations This is the best form of business organization for raising capital through the same of equities. Here, a board of directors is appointed by the shareholders of the corporation and these board members decide the managing body. It does not diminish at the end of its members. Here, each of the members have to pay their respective taxes on dividends collected while the corporation its own taxes. It is more expensive to form as compared to partnerships. (COMMON FORMS OF BUSINESS ORGANIZATION, 2010) Determinants of k Interest Rates There are basically five determinants of interest rates. The first one is the real interest rate (k*). This interest rate is free of inflation, risks. In US, it is calculated as the rates on Treasury bills subtracted by the expected inflation rate. The second determinant is inflation risk premium (IRP). This defines the average rate of inflation in course of the time that a security lasts. It generally constitutes of the largest part of the nominal rate. The third determinant is default-risk premium (DRP). This interest rate compensates for the chances the borrower would default for taking money. In US it is calculated as the difference between T-bonds rate and that of a corporate bond which has equal maturity and marketability. The next determinant is maturity premium (MP). This is a premium that is an additional over the real rate of interest which acts as a compensation for the exposure of security to the interest rate risk. With increasing maturity, risk increases. The final of these determinants is the liquidity premium. This compensates for the lack of ability of a security to get converted into cash at a value close to market value. On the basis of these determinants, k interest rate can be calculated as: k= k* + IRP + DRP + MP + LP Business Cycles and Yield Curves Yield curves are profoundly used as analysis tool of the financial markets. The Fed policy makers would soon be using it as one of the key indicators. It is more closely associated with the changes in inflation expectations. It can also be used in prediction of the real economic activity. As we have seen the determinants of interest rates where the expected inflation had been taken into account, yield curves help in forming interest rates that takes into account the future growth and interest rates as well. Yield curves also have long associations with business cycles. The reason for the same is that it gives the most suitable predictions for the business cycle turning points. Even though it is a complex terminology, it has a number of characteristics that are common with business cycles. Research says that whenever there is an expansion in the business cycle, there is a rise of both short and long rates and vice versa for the downturns. It has also been found that all occasions wh en the yield curves that have negative slopes, where the short rates exceed the long rates, the business cycle has been at its peak. Other than those times of unusual behaviour that the Government has shown, almost every expansion has seen short rates rising more than long rates and every recession has seen long rates rising more than short rates. This is the relation between business cycle and yield curves. On a further description of business cycles with yield curves, if one considers an expansion in the business cycle initially, with an improvement from the times of recession, there is an increase in the relative demand for liquidity which increases the short rates. As liquidity begins to tighten; the probability of short rates to continue climbing decreases. As a result, the liquidity premiums begin to shift. Now the rise in short rates does not pass on to long rates and the yield curve gets flatter. Now, the probability of future weakness takes height and therefore yields sprea ds hence increasing the gap between short and long rates. (Keen, 1989) Financial Markets and Institutions In course of its functioning over decades, financial markets have changed their definitions. Today, there are recognized as mechanisms that allow trade of financial securities, commodities and other items that carry value. The transaction costs associated are relatively low and the lower it is the more efficient the market is. Financial markets are basically associated with raisin capital, transferring risks, and also international trade. Securities here can be termed s receipts which the borrower issues to the lender who promises to pay back the capital taken. In return, some form of interests or dividends is expected by the borrowers. Financial markets could either be capital markets composed of stock and bond markets, commodity markets, money markets, derivatives, futures markets, insurance markets and foreign exchange markets. Also, there are primary markets which sell or buy newly formed securities and secondary markets which sell held securities or buy the existing ones. Talk ing about a financial institution, it provides financial services to its clients. They most significantly work as financial intermediaries. There are basically three types of financial institutions. There are deposit-taking institutions which are related to managing loans and deposits. They would be in the form of banks, credit unions, building societies, trust companies and also mortgage loan companies. The other types are the insurance companies and pension funds and the third type are in the form of brokers, underwriters and investment funds. Working as intermediaries, financial institutions are responsible for transfer of funds from investors to companies who require those funds. In other words, they are the ones who facilitate the flow of money. In most countries, financial institutions work under prudential regulations with due regard to consumer protection and stability of the market. (Vernimmen, 2009) Risk and Required Return In most general terms, a risky situation is that which has a certain probability of loss. As the probability of this loss increases, the chances of risk also increase. This can be described by virtue of probability distribution of the possible returns out of it. As far as the return is concerned, the most likely outcome of the same is measured in the form of expected value. If the distribution has been considered normal, the expected value if the arithmetic mean. The more is the expected value of return, the better is the investment. Variance and standard deviation are two important measures that check for risk measurement. In this context dispersion means a higher value of uncertainty that accounts for a higher value of risks. In order to calculate the required rate of return, there are two major factors that have to be taken into account. They are perceived riskiness of the investment and the required rate on making investments other than the ones chosen. So a required rate of re turn can be calculated as the sum of risk free return and the premium that is associated with the risks. Risk-free rate of return signifies the pure-time value of money. It is just the interest paid over the delay of consumption. As far as the risk premium is concerned, it can be classified as follows: Business Risk Financial Leverage Liquidity Risk Exchange Rate Risk Risk and return can be graphically understood by the following graph: Profit versus Wealth Maximization In the traditional times, profit maximization was of major concern and wealth maximization was hardly given any thought. But on further understanding the market, it was found that profit maximization was only about increasing profits not taking into account the need to larger market share, high value of sales, more amount of stability etc. Also, profit maximization did not take into account the difference between shirt-term, mid-term and long-term profits. Also, it did not include profits over time. Today, many organizations are running on the pillars of social responsibility. Profit maximization does not give any heed to the society which is certainly not agreeable in the present context. As far as present scenario is concerned, one can take it for granted that a company would flourish just on the ideas of profit maximization, Hence, came the concept of wealth maximization. As far as wealth maximization is concerned, it is majorly involved in increasing the Earnings per Share (EPS ) of a firm and also to maximize the present value of net worth of the system. One can define wealth here as the difference between the value of gross present worth and the investment which is required to achieve the benefits. Here, gross present worth is actually the capitalised value of the benefits that are expected. There is a discount on this value depending on the uncertainty factor of the benefits associated with the same. So, one can define wealth maximization here is the total cash flow at a particular time as compared to the profits at that time based on a certain activity. All those actions taken by a company where the net present worth is found to be above zero value, there are chances of creating wealth out of them. They should always be considered for wealth maximization rather than on the limited-scope profit maximization. (Profit Maximization vs Wealth maximization, 2007) Types of Financial Instruments Financial instruments are the trading entities in the financial market explained in the previous sections. These financial instruments are mentioned as follows: Equities It is a representation of ownership in a company. Stock markets are the places where the trade of equities can be done. There are chances of purchasing equities directly from a company by virtue of Initial Public Offer (IPO). It is generally considered to be a good investment in the long run but also has a large amount of risks associated with it. Ownership of equities makes a person, a shareholder of a company. (Vishwanath, 2007) Mutual Funds Here, a group of people are given the opportunity to put their money together as an investment and rely on professional organization to manage the same. It has a pre-determined financial objective. The major characteristics associated with the same are diversification in risks, efficiency of costs, management by professionals and sound regulation. Every company has different schemes under this context depending on the type of market requirements. Bonds These financial instruments are of fixed-income nature which has the sole purpose of raising capital from the market. Almost every institution whether private, financial, state or even central and other Government institutions use it to generate funds. Of these Government bonds have least risks associated but that comes with a low level of return as well. Deposits Surplus funds can be secured using investment in banks or through the deposits in post offices. As far as lying on the spectrum is concerned, they generally lie at a lower end but is effective for older people. Cash Equivalents These are of the safest forms of investment options. Hey are also highly liquid in nature. In modern terms treasury bills and also market funds are equivalents of cash. (Financial Instruments, 2011)

Essay on The Problem of Global Warming - 1741 Words

The Problem of Global Warming Imagine you are placed into the future. The year is 2100. You begin to live in this new world. You hear about huge storms over much of the USA that cause severe damage and flooding. San Francisco, New York City, New Orleans, Seattle, and Miami all experience major flooding from the ocean level having risen so high. Thousands and thousands of people perish each summer across the USA alone—hundreds die in Chicago as the temperature soars to 100 for 2 weeks straight. No, this isn’t total fantasy. These events all could occur. All of them could result from one thing—global warming. Global warming is a huge problem with many consequences that people don’t realize could occur. If we work together,†¦show more content†¦Because more carbon dioxide is being put into the air, there is more absorption by the atmosphere and more reflection back to the surface, so the surface is getting warmer. Now, what actions are resulting in the expansion of the greenhouse effect? Two main causes are burning fossil fuels and driving our cars. According to a NASA earth observatory web page, â€Å"fossil fuel burning (coal, oil and gas) releases about 6 billion metric tons per year.† On the EPA web site, it is stated that most of the emissions of greenhouse gases, â€Å"about 82%, are from burning fossil fuels to generate electricity and power our cars.† As I said before, driving our cars also is a large cause. For example, Ecobridge states that â€Å"Twenty percent of U.S. carbon dioxide emissions comes from the burning of gasoline in internal-combustion engines of cars and light trucks.† So a fair amount of the emissions is from driving your car. Deforestation, the cutting and burning of a forest, also increases the amount of carbon dioxide into the atmosphere. A NASA page says that â€Å"when a forest is cut and burned to establish cropland and pastures, the carbon that was stored in the tree trunks (wood is about 50% carbon) joins with oxygen and is released into the atmosphere as CO2. CO2, is, ofShow MoreRelatedGlobal Warming Is A Problem Essay1527 Words   |  7 PagesAbstract Global warming is a dilemma; it is a debatable issue between a fact and a theory, between approval and disapproval and between having advantages and disadvantages. Endless questions that have indefinite answers arise to a man’s mind when just tackling the idea of the global warming. Many people do not take in consideration the environmental issues, their main interests lie behind thinking about their personal lives and needs. Only few who think about the environment they‘re living in. IsRead MoreThe Problem Of Global Warming1131 Words   |  5 PagesOne of the biggest problems facing in today s world is global warming. It is affecting the earth from climate changes, storms becoming worse over time creating damage to peoples homes, species dying because they can’t adapt rapidly to the changes, animal s population is shrinking and new diseases being created. Thankfully through time we have developed new technology to reduce the effect of global warming. However since we have dealt with global warming for so long for many years, we have doubleRead MoreThe Problem Of Global Warming1228 Words   |  5 PagesWhat is a Social Problem? A social issue is defined as an area of conflict in a social setting that influences different people and is often out of reach of the control of an individual or local geographical authority (Weart 73). Some social problems, however, are not perceived universally as such, resulting in a difference in opinion between different groups. Other social issues are universally recognized as justifiable and, therefore, are addressed by everyone. Global warming is a social issueRead MoreGlobal Warming Is A Problem1381 Words   |  6 PagesWhat is global warming? Global warming is the polar bears and penguins fighting for their lives because their home is melting. Global warming is seventy-degree weather in the middle of February. Global warming is the rapid increase in tropical storms. Global warming is the California drought. Global warming is the harmful wildfires occurring in our forests (NRDC). Many people, mostly politicians, believe that global warming is a problem that doesn’t exist. Global warming is a real issue that we cannotRead MoreThe Problem Of Global Warming1311 Words   |  6 Pagesknow is inhabitable is now being destroyed by man. As humanity has revolutionized we have created many problems along the way. The main problem we are facing right now is called global warming. We have damaged many ecosystems trying to better ourselves, and we have not yet once thought about the damage we are inflicting on our mother earth. We are already beginning to see the effects of global warming. It will make little changes that will have a huge impact, and devastate many ecosystems and everythingRead MoreThe Problem Of Global Warming1430 Words   |  6 PagesGlobal Warming in the United Stated Global warming is no longer just a prediction it is actually happening. It is undisputed that the average temperature at the surface of Earth has increased over the past century by 1 degree Fahrenheit, with both the air and the oceans warming. Since 1880, when people in many locations first began to keep temperature records, the 25 warmest years have all occurred within the last 28 years. The problem is that if we keep on hurting our own environment and ecosystemsRead MoreThe Problem Of Global Warming1443 Words   |  6 Pagesstruggle such as the Syrian war. One reason why Syrians are engaged in a war is that they are experiencing extreme heat and drought which causes them to be more rebellious and aggressive. The underlying cause of these trouble can be due to global warming. Global warming occurs when carbon dioxide and other greenhouse gases trap heat in Earth’s atmosphere because some of the sun’s ray cannot escape. It is a worldwide phenomenon that impacts each a nd every one of us because it cause irregular climate patternsRead MoreThe Problem Of Global Warming1088 Words   |  5 Pagesthe story in the movie The Age of Stupid, in which a man lives in the devastated future world of 2055. The man looks back to today’s date and asks himself why we did not stop the climate change when we had the chance. However, today global warming is out of control, global temperatures are steadily rising. â€Å"The primary cause, a consensus of scientists has said, is the rising emissions of greenhouse gases like carbon dioxide and methane† (Stone, 2013). The CO2 stays in the atmosphere for 50 to 100 yearsRead MoreGlobal Warming Is A Problem1654 Words   |  7 Pagesthis reason is global warming. Global warming is a problem that some people choose to ignore. They claim it does not exist. Global warming is real. It is time for people to stop ignoring it and start searching for a solution. Although many people do not believe in global warming, blaming the climate change on the sun, global warming is a serious danger to the Earth because it could have serious effects on the plant and animal populations. To fully grasp the effects of global warming, one must firstRead MoreGlobal Warming Is A Global Problem1418 Words   |  6 PagesThe reason why, I decided to focus on global warming is because it doesn’t just affect one person it affects everyone as a national crisis. Numerous individuals don’t believe in global warming, but to scientist this is a big dilemma. In the article, â€Å"closer looks at climate change, it’s specified that these issues are not new, they have been around forever† (Schmidt, 2010). â€Å"In the article the real case against activist global warming, has gotten the response of the president of the United States†

Demand Curve free essay sample

Determining the demand for a product is often the responsibility of the strategic marketer. (a) Define and describe the â€Å"demand curve†. (b) Assess what information may be helpful to the strategic marketer in order to determine demand. (c) Discuss the factors that may create a fluctuation in demand. The demand curve is the graph depicting the relationship between the price of a certain commodity and the amount of it that consumers are willing and able to purchase at that given price. It is a graphic representation of a demand schedule. The demand curve for all consumers together follows from the demand curve of every individual consumer: the individual demands at each price are added together. Demand curves are used to estimate behaviors in competitive markets, and are often combined with supply curves to estimate the equilibrium price (the price at which sellers together are willing to sell the same amount as buyers together are willing to buy, also known as market clearing price) and the equilibrium quantity (the amount of that good or service that will be produced and bought without surplus/excess supply or shortage/excess demand) of that market. In a monopolistic market, the demand curve facing the monopolist is simply the market demand curve. According to convention, the demand curve is drawn with price on the vertical (y) axis and quantity on the horizontal (x) axis. The function actually plotted is the inverse demand function. The demand curve usually slopes downwards from left to right; that is, it has a negative association. The negative slope is often referred to as the law of demand, which means people will buy more of a service, product, or resource as its price falls. The demand curve is related to the marginal utility curve, since the price one is willing to pay depends on the utility. However, the demand directly depends on the income of an individual while the utility does not. Thus it may change indirectly due to change in demand for other commodities. Information to determine demand Levels of income A key determinant of demand is the level of income evident in the appropriate country or region under analysis. As a generality, the higher the level of aggregate and/or personal income the higher the demand for a typical commodity, including forest products. More of a good or service will be hosen at a given price where income is higher. Thus determinants of demand normally utilize some form of income measure, including Gross Domestic Product (GDP). Population Population is of course a key determinant of demand. Although all forest products do not necessarily enter final consumer markets, the actual markets are largely presumed to be functionally related to population. Growing populations are positively correlated to timber demands in the aggregate, as well as specifically to individual forest products. Frequently, population and income estimators are combined, as in the case of the use of Gross Domestic Product per capita. End market indicators The use of end market indicators as determinants of demand is frequently incorporated into demand analysis. For example, much of the final use of forest products is linked to construction (residential and total). Indicators and trends related to construction activities, or which are determinants of construction, provide indirect estimates of the influence of these activities as the source of derived demand for wood. Housing starts, public investments, interest rates, etc. can be highly correlated to timber demand. Availability and price of substitute goods Consumption choices related to timber are also influenced by the alternative options facing users in the relevant marketplace. The availability of potential substitute products, and their prices, weigh heavily in determining the elasticity of demand, both in the short run (static) sense and over time (long run). Fuelwood, as a dominant use of timber in the Asia Pacific Region, reflects conditions of very limited options for energy sources at reasonable prices. Rural low income or subsistence populations simply do not have options regarding energy they use wood or go without. Demand, at this basic level, in almost perfectly inelastic. The cost (if only implicit in terms of gathering time) does not materially affect consumption quantity. Suitability of alternative goods and services is, in part, a question of knowledge as well as availability. Market information regarding alternative products, quality, convenience, and dependability all influence choices. Under conditions of increased scarcity and rising prices for tropical hardwood panels, for example, users have a positive incentive to search for and investigate the suitability of alternatives that were previously overlooked or ignored. Tastes and preferences All markets are shaped by collective and individual tastes and preferences. These patterns are partly shaped by culture and partly implanted by information and knowledge of products and services (including the influence of advertising). Different societies use forest products differently because of these differences in taste and preferences. For example, markets for wood products in Japan are commonly recognized as requiring very high product quality standards, the importance of visual attributes of wood, and other preferences not commonly found in many other markets. Factors that may create a fluctuation in demand Innumerable factors and circumstances could affect a buyers willingness or ability to buy a good. Some of the more common factors are: * Changes in Prices of Related Goods: Think about items that go together, or are Complements for each other. If the price of either product changes it affects the other product. An example might be peanut butter and jelly. Assuming most people eat PB and jelly together. What happens if the price of PB increases? If you like PB and jelly together, then you are now going to purchase less jelly. Not because you like either product any less, but only because you aren’t buying as much of one so you don’t need as much of the other. Another example might be steak and chicken, these things are usually considered to be Substitutes; meaning that they replace each other. So if the price of chicken goes down, then people buy more chicken and less steak†¦ simply because it’s cheaper not because you like steak any less. Nothing happened to steak, it still costs the same amount, only now the other option is cheaper so people buy less. In this example you would move along the Demand Curve for chicken (because the price changed) and you would shift the Demand Curve for steak to the left because your desire to purchase steak decreased. Changes in Income and Wealth: Changes in Income or Wealth cause your demand to change. Think about all the junk you eat now because it’s cheap, Mac ‘n Cheese, Ramen Noodles, $1 menu items at McDonalds, etc†¦. If you were offered a job tomorrow making $100,000 a year what would you buy when you went grocery shopping; are you still going to buy as much Mac ‘n Cheese and Ramen Noodles? For most people the answer is no, you are going to spend less money on these items despite the fact that you have more money overall to spend. In this case, Mac n Cheese would be an Inferior Good. Inferior Goods are goods you buy less of when you have more money. Inferior Goods are goods you buy because you can’t afford the things you really want. Some people may say that they really, really like Ramen Noodles. For those people, they would probably purchase more if their income increased. For those people Ramen would be considered a Normal Good. A Normal Good is something you buy more of as your income increases. Note: At this point we do need to make the distinction between Wealth and Income. Income is the amount of money your paycheck is for; while wealth is all the other money you have. If you win the lottery and quit your job, then you have no income but a great amount of wealth. Either one of these will cause your demand to change, but it is important to know the difference between the two for later in the course. Changes in Tastes and Fads: People have changes in taste all the time. Look at fashion, would you still be willing to buy the same clothes you bought 10 years ago? If you would be willing to, are you still willing to pay the prices you paid then? As peoples tastes change it changes how much they are willing to spend, pushing that Demand Curve either to the right (they are willing to pay more and/or purchase more) or pull it to the left (they aren’t going to spend as much money on this product and don’t want as much of it). Changes in Expectations: Expectation is what you think will happen tomorrow. For example those students who have student loans are spending money now, because they anticipate an education will earn them more future income. They have the expectation that they will get a higher paying job, this higher paying job will allow them to afford the higher loan payments and still end up with more disposable income than they would have earned without schooling. They have no problem spending thousands of dollars a year now, despite the fact that they don’t have that kind of money. In Graduate School, the expectation is that you will make more money†¦ so you are willing to spend more money by taking out more loans, and purchasing more courses.

Operations Management Custom Made Kitchens

Question: Discuss about the Operations Management for Custom Made Kitchens. Answer: Introduction The case study under analysis is for the business operations of an organisation named, Hawkesbury Cabinets Pty Ltd. The business operations of the organisation aimed at the manufacturing of custom-made kitchens for the customers based on their needs. These kitchens were being manufactured by the organisation with the unique specifications as per the needs of the customers or clients. Gradually, the organisation started getting orders for various standardised kitchens from the builders in lots. These standardised kitchens werent unique in terms of their specification but allowed the builders to have them manufactured in small lots to be placed in their houses. The essay analyses the impacts of the manufacturing of the standardised kitchens on the actual business operation of the organisation of manufacturing the custom-made kitchens as per the needs of the clients. Even if the manufacturing and selling processes of the standardised builder kitchens made some profit, they gradually led to the increase in the costs of manufacturing and maintaining the inventory of the standardised kitchens. This in turn affected the performance of the organisation in manufacturing the custom-made kitchens and drove the profits down by increasing the costs associated with various business processes (Khanna, 2015). Analysis The current production systems and processes used by Hawkesbury Cabinets can be divided into the two categories of the products sold by the organisation i.e. the custom-made and standardised kitchens. The production systems used by the organization include saws, cutting tables, routers and shapers. All of these production systems are kept in close proximity to each other in the manufacturing facility. Some of the other production systems like lathes and other less used systems are kept in close proximity to each other in another part of the facility. The painting and furnishing activities on the products are carried in controlled environment towards one of the ends of the facility. This entire layout of the manufacturing facility makes it difficult for the organisation to expand its business operations. In such a situation, the manufacturing of the builders standardised kitchens cramps up the entire space, which in turn decreases the quality of the workplace for the custom-made kitch ens and increases the costs of maintaining the inventory of the standardised kitchens (Brown, 2013). The business processes of the organisation include the cutting, sawing, bending and routing of the materials to manufacturing either the custom-made or standardised kitchens along with the painting and furnishing of the products. These business processes being repeated for the two categories of the products in turn increase the resources and material requirements of the entire business model of the organisation. The increased magnitude of the business processes, in turn, increases the costs of the manufacturing process along with the decrease in the profits of the organisation (Slack, 2013). As mentioned in the case, the organisation started the manufacturing process of the builders standardised kitchens after manufacturing the custom-made kitchens for quite a while. In the past couple of years, the organisation has seen steady increase in the number of orders for the builders standardised kitchens. This in turn allows the organisation to start the manufacturing process of these standardised kitchens in order to match the demand of the corresponding products in the market of operation. But the business model of the organisation always focuses more on the manufacturing of the custom-made kitchens over the standardised ones. This in turn interrupts the manufacturing process of the standardised kitchens, if the orders for custom-made kitchens come in the middle (Walker, 2014). This in turn clutters up the manufacturing facility of the organisation by maintaining the unfinished standardised kitchens in the workplace of the organisation. This in turn increases the costs of ma nufacturing costs, which includes the costs of maintaining the unfinished products in the workplace and costs of compromising with the manufacturing process of the custom-made kitchens due to the unavailability of the space in the manufacturing facility to expand the business operations (Mahadevan, 2015). The increasing number of orders for the builders standardised kitchens also affects the promised delivery times for the custom-made kitchens to the clients. So the problem with the inclusion of the manufacturing of the builders standardised kitchens along with the custom-made kitchens is the increasing costs of the manufacturing process along with the decreasing profits of the business processes (Chase, 2012). The issues of including the manufacturing process of the builders standardised kitchens along with the manufacturing of the custom-made kitchens introduce a wide range of operational management issues in the workplace of Hawkesbury Cabinets. These operational management issues are related to the usage of the available resources and materials to the organisation along with effective design of the business model to manufacture the products from both the categories. The operational management issue of order acceptance is one of the most significant issues arising from the inclusion of the manufacturing of products from both the categories in the business model of the organisation (Handfield, 2012). The orders for the products of the organisation should only be received when the manufacturing process of the existing orders can be completed before starting the manufacturing process for the new orders. If the major focus or priority of the business model of the organisation is the manufact uring of the custom-made kitchens, then the orders for the builders standardised kitchens should be limited to a certain quantity (Gunasekaran, 2012). Another operational management issue is the management of the inventory for both the materials and the unfinished products of the manufacturing process of builders standardised kitchens. The unfinished products should be managed in the manufacturing facility in an efficient manner in order to ensure efficient manufacturing process for the custom-made kitchens. The manufacturing process of the custom-made kitchens should be efficiently planned with the scheduled manufacturing of the builders standardised kitchens. So the evidences from the case study suggest that the inclusion of the manufacturing of the builders standardised kitchens clearly affects the major business process of manufacturing custom-made kitchens as per the needs of the clients (Krajewski, 2013). Conclusion The case of Hawkesbury Cabinets clearly shows some of the operational issues in the workplace and manufacturing facility of the organisation. The inclusion of the manufacturing of both the custom-made kitchens and the builders standardised kitchens in the business model of the organisation leads to a number of operations management issues. These operations management issues of the organisation can be defined in terms of the overlap in the manufacturing processes of the both the types of products and the undivided focus of the organisation to manufacturing process of the custom-made kitchens in the manufacturing facility of the organisation. The business focus on the custom-made kitchens hampers the swift flow of the manufacturing of the builders standardised kitchens. This in turn increases the magnitude of the inventory in the manufacturing facility for the unfinished products of builders standardised kitchens, which in turn increases the overall costs of manufacturing process and h ence decreases the profits realised from the sale of the products (Hill, 2012). References Brown, S., Bessant, J.R. and Lamming, R., 2013. Strategic operations management. Routledge. Chase, J., 2012. Operations management. Tata McGraw-Hill. Gunasekaran, A. and Ngai, E.W., 2012. The future of operations management: an outlook and analysis. International Journal of Production Economics, 135(2), pp.687-701. Handfield, R.B. and Bozarth, C.B., 2012. Introduction to Operations and Supply Chain Management. Pearson Higher Ed. Hill, A. and Hill, T., 2012. Operations management. Palgrave Macmillan. Khanna, R.B., 2015. Production and operations management. PHI Learning Pvt. Ltd.. Krajewski, L.J., Ritzman, L.P. and Malhotra, M.K., 2013. Operations management: processes and supply chains. New York: Pearson. Mahadevan, B., 2015. Operations management: Theory and practice. Pearson Education India. Slack, N., Brandon-Jones, A. and Johnston, R., 2013. Operations management. Walker, P.H., Seuring, P.S., Sarkis, P.J. and Klassen, P.R., 2014. Sustainable operations management: recent trends and future directions. International Journal of Operations Production Management, 34(5).