Little’s Law: An Introduction Today we are going to dive into Little’s Law. This is one of the fundamental principles in operations management and queuing theory. It provides a simple but powerful relationship between three key performance measures in any…
The Time Value of Money states that a dollar today is worth more than a dollar in the future. The reason is straightforward: a dollar today can be invested and start earning interest immediately. Interest is the fee charged for…
Understanding your cost structure is a fundamental step in business decision-making. It helps guide efforts to minimize costs, set appropriate prices, recognize economies of scale, and make informed decisions about whether to continue operations. It also plays a key role…
Why Marketing Strategy Matters Among the many types of business strategies—such as financial, technological, or operational—marketing strategy stands out as especially relevant to nearly everyone in a business environment. Understanding marketing strategy isn’t too difficult—especially at the level we encounter…
Expense recognition is an accounting principle that helps companies ensure their financial statements are accurate and paint a true picture of their performance. Understanding Expense Recognition: The Two Main Types Expense recognition is all about timing. It’s a set of…
Stockholders’ equity represents the portion of a company’s assets that remains after we subtract all liabilities. Think of it as the owners’ residual claim on the company. This equity section primarily consists of two key parts: Contributed Capital and Earned…
What Is a Vector Space? Vector space? Sounds a little strange, right? But in fact, we use it almost every day. The numbers we work with daily form one example of a vector space, and when we run something like…
Economies of scale refer to the cost advantages that businesses gain as they increase their production levels. Why do these advantages occur? To understand this, let’s review some key variables and introduce new ones along with appropriate notation. The variables…
What Are Economies of Scope? Economies of scope are the cost savings a company gets by producing a variety of products together, rather than producing each one separately. Instead of getting cheaper by being bigger, the company gets cheaper by…
Analyzing a business situation typically involves examining both the external environment and a company’s internal capabilities. In this session, we’ll begin by exploring frameworks specifically designed to assess the external environment. Why the External Environment Matters Understanding external factors—especially the…