Finance Value Based Management And Jit

The notion of value-based management has become widely embraced bycorporate managers. As the authors of a recent article entitled, “TheValue-Based Management Commitment,”
(http://businessfinancemag.com/bpm/value-based-management-commitment)point out, the real problem associated with value-based management isthe development of appropriate metrics to achieve behavioral changes.One challenge is that value-based management concepts never make it outof the finance department. After reading this article, answer thefollowing questions:

1. What is the goal of value-based management? Is its focus on reported earning or shareholder/stakeholder wealth?

2. Describe the difficulties in developing performance measures andthe role that the finance department should play in developingappropriate measures.

3. What is one of the major problems associated with the budget process as it is used by most companies in short-term planning?

Question 2:
The just-in-time inventory system is designed to reduce the inventoryperiod. In essence, companies pay their suppliers to carry the inventoryfor them. Reducing the inventory period reduces the operating cycle andthus the cash cycle. This reduces the need for financing.

Consider what type of cost is being minimized and what costs are likely to increase. Please, explain.

Are JIT inventory policies appropriate for all industries?

value-based mgt.docx

N.B: Need about 5 lines each for each question

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