Ressource Management Essay Example | Topics and Well Written Essays - 1000 words

Ressource Management - Essay Example This paper aims at discussing strategies that are involved in sourcing, budgeting processes as well as financial reporting requirements adopted by Tesco PLC, a UK based supermarket that deals with various kinds of products. Sourcing Apart from dealing with food products and Tesco mobile among other brands, Tesco PLC deals with selling and distribution of safety equipments such as gumboots, oil resistant boots, helmets, ear plugs, overalls and dust coats among others. Majority of our customers are entities dealing with manufacturing of all kinds of products as well as flower farms. Based on the need to maintain safety in all work places and be in line with Occupational Safety and Health Administration (OSHA) safety requirements, majority of firms offering products as well as services have continued to order from us thus increasing our sales. Tesco PLC has outsourced the process of manufacturing most of our products to a neighboring firm. Outsourcing refers to the contracting of a firm ’s business activity to a third party. ... The second advantage is that the company is able to share the risks arising. Another advantage of outsourcing is that the company does not incur the costs of hiring production machine or purchasing them. Likewise, we are able to concentrate with our core business of selling and marketing of our products making the relationship with our client’s stronger. Disadvantages of outsourcing our services Although Tesco PLC emulates outsourcing, the company is faced with some disadvantages. First is lack of customer focus by the company we have outsourced to. Based on the fact that the company manufacturers products for various companies dealing with safety gadgets, it may lack complete focus on the quality of our brands2. Additionally, sometimes there is a delay in the delivery of the final products to Tesco PLC premises an issue that has caused us to lose some loyal customers3. Despite the disadvantages, our organizations objective is to outsource its production process for the next 3 years after which it will establish its own production department. Budgeting processes Tesco PLC.has established accounting department that undertakes the budgeting process under the leadership of a senior accountant. The company maintains a cash budget. The cash budget entails an expansive plan of future cash flows. In order to ensure that the company liquidity is maintained at a recommendable state, four items are covered by the cash budgets. These includes cash receipts, cash disbursements, net change in cash for a particular period of time as well as new financing needs. The accounting department undertakes six processes in its annual budget preparation. Automating: This department uses excel spreadsheets with formulas that are used to compute

There are many types of investment vehicles, one of the vehicles that Essay

There are many types of investment vehicles, one of the vehicles that pay some of the highest returns - Essay Example In this part, the paper will discuss the compensation structure used by hedge funds. The discussion will include the rationale for this compensation structure, its mechanics and the agency issues that can be associated with the compensation structure. The hedge fund structure is usually composed of general partners who handle all the trading activity from the fund and limited partners who supply the capital that is invested in the fund. Other members include the portfolio manager, who is usually the owner of the management company. The investors in the portfolio are usually between 100 and 150 certified investors who are willing to let the portfolio manager manage their funds for profit. The administrators of the hedge funds maintain the books and records and process all the transactions in the funds. Since the investors are not involved in the day to day handling of the fund, it is up to the hedge fund managers to complete all the transactions in the fund and charge fees to the inve stors in form of compensation structures. As already stated, the compensation structures used by hedge funds are different from those used by normal mutual funds since they take more fees in a different manner. The managers in the hedge fund use different strategies to create profits from the funds, and the Limited Partners, also known as the investors receive a percentage of the profit. The compensation structure in hedge funds is usually set on two main types of fees; performance fees and management fees. The performance fee in a hedge fund refers to the fee in the investment fund that a manager charges investors as a percentage of the increase in value of the assets in which the funds are invested. The value of the funds investments is periodically calculated and the fund manager gets a performance fee, usually between 20 and 30% of the Net Asset Value, which is the increase in value. The performance fee in hedge funds is similar to that in mutual funds. However, other fees that are in the hedge fund and not in the mutual funds are the management fees. The management fee is usually 1 to 2% of the fixed fee of the assets in the mutual fund, and in addition, an incentive fee of between 10 and 30% of the assets in the fund is also charged. The contentious point about these fees is that the management fee is usually charged regardless of whether the fund has made any profits, which means that the managers will always earn profits even if the fund fails. However, the performance fee can only be charged if the fund makes a pre-specified level of return, which is usually set at a percentage or decided as an index. This level of return is referred to as an hurdle, and the managers strive to increase the level of performance of the hedge fund in order to earn extra fees. Hurdles typically reduce the size of performance fees and increase the reward for better management of the fund, a factor that accounts or its popularity with investors. Another terminology analogou s with the compensation structure of hedge funds is the high water mark, a term used to refer to the performance of the fund. The highest value of a hedge fund in a year is called the high water mark, and if the fund’s value falls in the subsequent year, the managers are not paid performance fees. This means that in subsequent years, if the funds increase in NAV but does not exceed the high water mark, no performance is also charged on the investors since they do not make any additional