Monday, January 11, 2010
Chapter 12 -The End of Credit Card Consumerism
SUMMARY
Over the past couple of decades; the United States, a shopaholic nation has had a craving to spend until their credit cards are melted. Throughout the past four decades consumer spending has been increasing and becoming a huge share of the total economy. In 1965, the consumer spending in the U.S. economy was just a little more than 60 percent and now it has risen up to 70 percent. It may seem that there is nothing wrong with consumption (especially with the most productive economy on earth). Well now there is a slowdown in the economy and the in inflating prices of goods and services. Since the economy has come to a turning point, there was no choice, but to cut back on their spending. Since the year, 2000 total credit card debt has increased more than 50 percent. Excluding mortgages an average American who has a credit file is in around $16,635 in debt. With the inflation of gas and food prices will probably cause the Federal Reserve to start increasing interest rates. In one survey it was found that people rank being in control of their finances and living in greener lifestyle higher as signs of success than having money or a luxury goods, and view paid-off mortgage as more of a status symbol than having a beautiful home.
CONNECTION
The connection that is in this article and chapter 12 are with the down turn of the economy fewer companies would prefer costumers using credit cards because cash provides a safer insurance; even though the use of credit cards are much more convenient for the average person. Although some credit card companies offer cash discounts for those who are able to pay the full bill within a certain date, there is a high chance of consumers cutting down on the use of credit cards due to more companies wanting to collect payments in cash. For example, I have found that there are gas stations who would offer special discounts for consumers who paid in cash. http://www.creditcards.com/credit-card-news/gas-discounts-for-cash-1275.php With companies who offer discounts for consumers to pay in cash can cause the credit card companies to lose a great amount profit. The cash discount that the credit card companies offers is to ensure that they will be able to get some of the money that their costumers have spent. The cash discount can also help consumers to use credit cards because if they pain within a time frame, they can save money. With the companies offering lower prices on their products, should the credit card companies increase the cash discount to maximize and to ensure the consumer’s use?
REFLECTION
In my opinion, I think that cash discounts is a great way of getting people to pay earlier and it also helps to keep customers to come back. Even though cash discounts helps credit card companies to get their money back earlier I think it is important for them to increase the rate of the discount due to the high demands of paying in cash of the retailing companies. Since the economy has came to a down turn more and more companies want to collect cash as paying, which would make sure that they had enough money to keep their business going. The credits card companies are still able to make great money due to the continuous increase of consumer spending from 1965 to present there was almost a 10 percent increase. They just have to think of ways to keep consumers using credit cards.
Tuesday, October 13, 2009
Chapter 11- Wal-Mart Improves On-Shelf Availability Through the Use of Electronic Product Codes - RFID
http://emol.org/emclub/?q=walmartrfid
SUMMARY
One of American largest companies Walmart improve their on-shelf availability through the use of electronic product codes. Since using the new (RFID) technology Researchers at the University of Arkansas found a 16 percent reduction in out-of-stocks and the study also showed that out-of-stock items with EPCs were replaced three times faster than comparable items using standard bar code technology. There were studies which showed that the RFID help stores to be were 63 percent more efficient to replace out-of -stocks than the normal control stores. The RFID also showed the researchers that out-of-stock on the EPC tagged items were reduced at a rate more than three times faster than that of the non-tagged items within the same store. Walmart is also desired to move to the Gens2 standard of EPC tags, it has been said that the Gen2 has proven to be very successful in improved read rates. The great thing about the Gens2 they are a lot less costly and the cost of the was was the number one driver to the cost. In some cases the price tags can be reduced by over 70 percent. The new technology not only helps to reduce their inventory in the whole supply chain, it also benefited in driving the cost down. which help Walmart to be more efficient and progressive than the other vendors.
CONNECTIONS
The connections that are in this article and chapter 11 are that the new RFID technology is a part of the perpetual inventory that is made more advance. The RFID technology is also more effective than the old system and the periodic inventory method- which is still used in small businesses today. The RFID system is much more time consuming, the cost using this system is much lower and the need of manual labor is sufficiently decreased- but it is still needed for accurate numbers at the end of the accounting cycle. This helps the business to grow and expand faster without needing to spend a great amount of extra money that can be used to promote or to advertise to help sell their products.
REFLECTION
In my opinion I think that switching to the new technology the RFID is a great investment for the company because the new system allows the company to replace out-of -stocks 63 percent more efficiently than the currently system. There is a 16 percent reduction in out-of-stocks and the out-of stocks with EPCs were replaced three times faster. With the second generation of Gen2, the prices of the tags can go down by 70 percent and with lowered prices of the tags -mostly likely the price of the items in the store may also go down. With the lower prices, this can help attract more consumers to shop at Walmart. With this system I can see the benefits for the company, which allows them to save a whole lot of money, time and the need of hiring more employees to do physical scanning of products. However, this system is relatively new so they will be testing it out and in the long term they will be able to see if this system is the best for the company.
SUMMARY
One of American largest companies Walmart improve their on-shelf availability through the use of electronic product codes. Since using the new (RFID) technology Researchers at the University of Arkansas found a 16 percent reduction in out-of-stocks and the study also showed that out-of-stock items with EPCs were replaced three times faster than comparable items using standard bar code technology. There were studies which showed that the RFID help stores to be were 63 percent more efficient to replace out-of -stocks than the normal control stores. The RFID also showed the researchers that out-of-stock on the EPC tagged items were reduced at a rate more than three times faster than that of the non-tagged items within the same store. Walmart is also desired to move to the Gens2 standard of EPC tags, it has been said that the Gen2 has proven to be very successful in improved read rates. The great thing about the Gens2 they are a lot less costly and the cost of the was was the number one driver to the cost. In some cases the price tags can be reduced by over 70 percent. The new technology not only helps to reduce their inventory in the whole supply chain, it also benefited in driving the cost down. which help Walmart to be more efficient and progressive than the other vendors.
CONNECTIONS
The connections that are in this article and chapter 11 are that the new RFID technology is a part of the perpetual inventory that is made more advance. The RFID technology is also more effective than the old system and the periodic inventory method- which is still used in small businesses today. The RFID system is much more time consuming, the cost using this system is much lower and the need of manual labor is sufficiently decreased- but it is still needed for accurate numbers at the end of the accounting cycle. This helps the business to grow and expand faster without needing to spend a great amount of extra money that can be used to promote or to advertise to help sell their products.
REFLECTION
In my opinion I think that switching to the new technology the RFID is a great investment for the company because the new system allows the company to replace out-of -stocks 63 percent more efficiently than the currently system. There is a 16 percent reduction in out-of-stocks and the out-of stocks with EPCs were replaced three times faster. With the second generation of Gen2, the prices of the tags can go down by 70 percent and with lowered prices of the tags -mostly likely the price of the items in the store may also go down. With the lower prices, this can help attract more consumers to shop at Walmart. With this system I can see the benefits for the company, which allows them to save a whole lot of money, time and the need of hiring more employees to do physical scanning of products. However, this system is relatively new so they will be testing it out and in the long term they will be able to see if this system is the best for the company.
Sunday, September 20, 2009
Chapter 6- Harmonized Sales Tax
http://www.fraserinstitute.org/newsandevents/commentaries/6815.aspx
Summary
This article reports that that the Finance Minister Colin Hansen announced that BC will replace its PST with a single Harmonized Sales Tax (HST) in the beginning of July 2010. The HST benefits businesses by ending business inputs, decreasing the cost and the tax penalty on new business investments. It will also make BC more encouraged in investments, more business competition and it will provide long term benefits to British Columbia. While the PST(current tax seven percent tax) applies to businesses, this greatly increases the cost of machinery and this cost causes business development to become more expensive than needed. From the harmonizing tax businesses will also benefit from reduction in unproductive tax-compliance costs. The only problem is that the delaying of supplements until mid-2010 can cause businesses to hold back from major purchases and this wouldn't be helpful to the economy.
Connections
The connections with this article and chapter 6 is that the seven percent PST and five percent GST will be replaced by the new Harmonized Sales Tax. This will affect the way which accountants do their books, which means there will no longer be separate documents for the Provincial Government and Federal Government. There will be less work involved for the accountants because instead of needing to separate the two sales taxes and worrying about the GST recoverable, they can just record the taxes as one and all the procedures for doing the taxes would be easier to keep track of. Therefore business owners can easily save money and time from all the paper work and complicated procedures.
Reflection
In my opinion the new Harmonizing Sales Tax will benefit business because they will save a lot of money from not needing to pay the seven percent in tax. But on the other hand the HST would burden on consumers because almost everything they purchase from mid-July will be increased by seven percent.The enforcement of this taxes may cause consumers to hold back from buying things other than the things that are essential for them. When there is less consumers in the market the economy may begin to fall and led into something similar to the depression.
Summary
This article reports that that the Finance Minister Colin Hansen announced that BC will replace its PST with a single Harmonized Sales Tax (HST) in the beginning of July 2010. The HST benefits businesses by ending business inputs, decreasing the cost and the tax penalty on new business investments. It will also make BC more encouraged in investments, more business competition and it will provide long term benefits to British Columbia. While the PST(current tax seven percent tax) applies to businesses, this greatly increases the cost of machinery and this cost causes business development to become more expensive than needed. From the harmonizing tax businesses will also benefit from reduction in unproductive tax-compliance costs. The only problem is that the delaying of supplements until mid-2010 can cause businesses to hold back from major purchases and this wouldn't be helpful to the economy.
Connections
The connections with this article and chapter 6 is that the seven percent PST and five percent GST will be replaced by the new Harmonized Sales Tax. This will affect the way which accountants do their books, which means there will no longer be separate documents for the Provincial Government and Federal Government. There will be less work involved for the accountants because instead of needing to separate the two sales taxes and worrying about the GST recoverable, they can just record the taxes as one and all the procedures for doing the taxes would be easier to keep track of. Therefore business owners can easily save money and time from all the paper work and complicated procedures.
Reflection
In my opinion the new Harmonizing Sales Tax will benefit business because they will save a lot of money from not needing to pay the seven percent in tax. But on the other hand the HST would burden on consumers because almost everything they purchase from mid-July will be increased by seven percent.The enforcement of this taxes may cause consumers to hold back from buying things other than the things that are essential for them. When there is less consumers in the market the economy may begin to fall and led into something similar to the depression.
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