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MGT604 - Management of Financial Institutions - Lecture Handout 27

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Mutual Funds

Investing In International Mutual Funds

Investing in international mutual funds has two faces:

  • First is buying funds from US based companies that buy and manage portfolio in internationally listed stocks/securities. These companies are governed by regulations of SEC (Securities and Exchange Commission)
  • Second is buying mutual funds from international non US companies.

A word of caution before investing even in best international mutual funds - Unlike domestic mutual funds investment, international investments entail additional risk factors such as economic and political in addition to risk of FOREX value (simply put: foreign currency exchange value) fluctuations.

Why Should You Invest In International Opportunities?

The number of funds in international investing is on the rise. We can cite a few reasons for this.

  • Removal of trade barriers and expanding of economies have sparked off growth in many non-US companies.
  • Some of the major industries of the world are dominated by non US companies.
  • Over 72% of the world stocks are listed out side US.
  • Greater and true diversification and opportunity to capitalize on best overseas companies.

Investing in international mutual funds is gaining popularity for various reasons. Rising political stability merging or opening of borders and currencies are some of the reasons. Vibrant and upcoming economies and non US corporations becoming financially stronger by the day are some of the reasons. In addition you get true diversification, balance and
opportunities.

Read more: MGT604 - Management of Financial Institutions - Lecture Handout 27

MGT613 - Production / Operations Management - Lecture Handout 31

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INVENTORY MANAGEMENT

Learning Objectives

Our discussion on Inventory Management would be complete only when we are able to learn and understand the types of Inventories and objectives of Inventory Control. This would ensure that we are able to understand the major reasons for holding inventories. We would be able to differentiate between independent and dependent demand. We will also learn the requirements of an effective inventory management system. We will review both periodic as well as perpetual Inventory systems. We will discuss in detail the ABC approach with a suitable example. Since our discussion would extend over three lectures we will also discuss the objectives of inventory management, describe the basic EOQ model, Economic Run Size, Quantity Discount Model with solved examples.

Types of Inventories

The five common types of inventories are:

  1. Raw materials & purchased parts.
  2. Partially completed goods called work in progress.
  3. Finished-goods inventories:
    • (manufacturing firms) or
    • merchandise, (retail stores)
  4. Goods-in-transit to warehouses or customers.
  5. Replacement parts, tools, & supplies.

Objective of Inventory Control

To achieve satisfactory levels of customer service while keeping inventory costs within reasonable bounds. Operations Managers are well aware of the fact that customer services with respect to Inventory takes into account both the internal customers as well as external customers.

Read more: MGT613 - Production / Operations Management - Lecture Handout 31