Corporate Social Responsibility in Supply Chain Management Essay

Case Study: Singapore The case was developed with the cooperation of Singapore Compact for CSR solely for educational purposes as a contribution to the Project entitled â€Å"New Corporate Procurement Strategy on Trade in Goods and Services in APEC Region – Supply-chain options with CSR perspective -† conducted under the auspices of the Asia Pacific Economic Cooperation (APEC). The case is neither designed nor intended to illustrate the correct or incorrect management of the situation or issues contained in the case. No part of this case can be reproduced, stored or used without the written permission of the author and the Asia Pacific Economic Cooperation.  © 2007 APEC Secretariat 216 Case Study: Singapore Executive Summary NTUC FairPrice Cooperative Ltd is the leading supermarket retailer in Singapore. The company is known as a â€Å"supermarket with social conscience.† Its supply chain activities focus on developing effective strategies to improve product quality and safety by working closely with its suppliers in implementing standards and good CSR practices. Singapore imports 95% of its vegetables from other economies since the local farms cannot meet the local demand. FairPrice itself imports about 80% of its vegetables. Sellers need to ensure that the vegetables are safe for consumption and its supply is ample. FairPrice invested in a fresh food distribution center in 2002 to enhance its ability to move its stock faster and maintain freshness quality. The Good Agricultural Practices for Vegetable Farming (GAP-VF) certification ensures that local suppliers meet the standard but the certification does not cover overseas suppliers. FairPrice needs to encourage these overseas suppliers to adopt similar standards. The standard applied to organic vegetables is even higher. FairPrice works with Agrifood Technologies Pte Ltd to develop an in-house certification program that would provide assurance of the integrity of the organic produce. FairPrice participates in the Pekan Baru project, a collaboration of the Indonesian and Singapore governments. FairPrice purchases 50 tons of vegetables per week from Pekan Baru. As the sole importer of the vegetables produced in Pekan Baru, FairPrice provides more work and income for more than 500 farmers and many operators along the supply chain. The project also involves technology transfer which helps the farmers to implement good agricultural practices and get higher yields of better quality vegetables. Pekan Beru farmers learned the technology on cold chain management which makes it possible to maintain the freshness of vegetables while being transported from the farm to FairPrice distribution centers. With quality assurance, FairPrice packages the vegetables under its house brand, Pasar. Branding the vegetables under Pasar has helped to market and increase demand for vegetables from Pekan Baru since FairPrice is a trusted brand in Singapore. CSR is a journey and FairPrice continues to strive to be the best place to shop, the best place to work, and the best corporate citizen. Introduction In the retail sector, companies compete for the consumer’s money by looking at the marketing mix of 4Ps – Product, Price, Place and Promotion. These are traditionally the four factors that retailers consider in their marketing strategy. However, due to globalization and better consumer awareness, retailers need to address another 3Ps – People, Planet and (not only) Profit. Consumers no longer just buy what is displayed on the retail shelves. They are asking questions as to how the products have been produced, and what has been their impact on society and the environment. For retailers to compete effectively in the market today, they need to assure consumers that what they put on the retail shelves are ‘ethical products’. In the supermarket retail industry, product quality (e.g. freshness, taste) and safety are two of the key concerns. If consumers in Singapore are in doubt about the product quality and safety of any retailer, they have a lternative sources such as vendors in local fresh produce markets. Hence, to 217 Case Study: Singapore compete effectively, supermarket retailers need to look at how and not just what they are doing in business. By examining the opportunities and challenges in the context of Corporate Social Responsibility (CSR) within the supply chain, businesses can sharpen their competitive edge and be good corporate citizens. Company Profile Established in 1973 by the labour movement, NTUC FairPrice Cooperative Ltd has grown from its first shop set up to moderate the price of sugar and rice to being the leading supermarket retailer in Singapore. It employs over 5,000 and runs a retail network of 216 outlets comprising 76 FairPrice supermarkets, one FairPrice Finest, two FairPrice Xtra (Hypermart), three Homemarts, 19 FairPrice Xpress and 116 Cheers Convenience Stores. FairPrice’s founding mission was to moderate the cost of living for the ordinary households in Singapore. Over the years, FairPrice’s mission has evolved to its present mission which is to moderate the costs of a good life. Essentially, FairPrice’s aim is to be: †¢ †¢ †¢ the best place to shop, the best place to work, and the best corporate citizen. To be the best place to shop, FairPrice focuses on maximizing consumer satisfaction which is based on its brand promise of delivering value, quality and service. Key to this commitment are its procurement practices. FairPrice’s product sourcing takes into account consumer feedback and needs, and market trends. It sources from established and reputable companies. It always tries to diversify its sources of supply, particularly for essential items. It also develops its own range of house brand products to offer consumers an alternative to national brands. FairPrice plays a strong role in establishing the price of essentials in Singapore. During the avian flu outbreak that resulted in the ban of egg imports from the region, FairPrice responded swiftly to the crisis by putting in place precautionary measures to curb profiteering. To prevent arbitrage, FairPrice took unpopular but necessary measures in restricting the purchase of eggs. To further alleviate the egg shortage, it imported Australian and New Zealand eggs as alternatives. Even after the ban on Malaysian poultry imports was lifted, FairPrice continued its efforts in working with business partners to peg chicken and egg prices at a reasonable level. Through this, FairPrice helped restore egg prices to pre-ban levels. To be the best place to work, FairPrice is a unionized employer that has good labour-management relationship. FairPrice takes a holistic approach in providing for employees well-being and opportunities for growth and development. FairPrice received the Work-life Excellence Award 2006 conferred by the tripartite committee on Work-life Strategy Singapore, in recognition of its programs to help employees balance personal commitments and work responsibilities. FairPrice contributes to the community through its own initiatives such as its annual Used Textbooks project, its Million Dollar Food Voucher Scheme for the needy and the provision of study grants to children of needy members. It also engages its network of suppliers to support its community efforts such as Heartstrings Buys, a fund-raising drive for the Community Chest. To promote environment protection, FairPrice launched the ‘Love Nature’ reusable bags to encourage its customers to reduce their reliance on plastic bags when shopping for groceries and necessities. In addition, the company participated in the ‘Bring Your Own Bag Day’ to encourage 218 Case Study: Singapore shoppers to bring their own shopping bags instead of using plastic bags. Cashiers at the retail stores have been trained to pack more items in each bag to reduce the consumption of plastic bags. As a good corporate citizen, FairPrice was cited as the â€Å"supermarket with a social conscience† by the Far East Economic Review in a 2000 survey report. In September 2005, FairPrice signed the UN Global Compact (UNGC) to support the initiative of the Singapore Compact movement to establish a UNGC network in Singapore and help raise awareness among more companies of the key principles of CSR which it upholds. FairPrice was also conferred the President’s Social Service Award in 2005 in recognition of its contributions to society. As a responsible food retailer, FairPrice is both a Case Trust accredited member and a Food Safety Partner of Agri-Food & Veterinary Authority (AVA) the economy-wide food safety authority of Singapore. FairPrice also supports pro-family initiatives and prides itself as a pro-family business retailer. It was voted one of the best loved pro-family retailers in the Singapore 2006 contest organized by the Ministry of Community Development, Youth & Sports. In another survey conducted by the Reader’s Digest in 2006, FairPrice was voted in by consumers and won the Trusted Brand Gold Award for the supermarket chain category in Singapore. The Supply Chain Singapore has only 256 licensed farms covering 746 hectares1 which cannot supply enough fresh meat, fruits and vegetables to meet the demand of its population of 4.4 million. Singapore imports 95% of its vegetables worth S$314 million since local farms can meet only 5% of the demand for vegetables. It imports vegetables from Australia, China, Indonesia, Malaysia, Thailand, The United States and Viet Nam. With Singapore’s high dependence on imported fresh vegetables, local sellers such as supermarkets need to ensure that the imported food is safe for consumption and its supply is ample. FairPrice invested S$25 million on a 130,000 square feet fresh food distribution center in 2002 to better manage its supply chain for fresh food. The setting up of the fresh food distribution center enhances the ability of FairPrice to move its stock faster and maintain freshness quality. The distribution center also provides the right infrastructure to improve the handling process of fresh food, thus reducing spoilage. Good temperature management and storage management are critical in maintaining the quality of food and preventing cross-contamination. FairPrice is committed to maintain a high standard of food safety and hygiene at the fresh food distribution center by getting the center to be Hazard Analysis Critical Control Points (HACCP) certified. From the distribution center to the retail stores, FairPrice uses refrigerated trucks to transport the vegetables. At the store, temperature checks are conducted again before putting the vegetables on the retail shelves. FairPrice works with the relevant authorities to develop standards. One such initiative is the implementation of the technical reference standards on cold chain management for chilled pork in 2005. The standard was developed by AVA and SPRING Singapore, the economy-wide standard body, together with FairPrice. It provides strict receiving, storage and display guidelines to ensure that the quality of the pork is not compromised.

Learning a Foreign Language Essay

What’s the best age to learn a new language? researchers say that you shouldn’t wait too long before introducing a baby to foreign languages. According to the critical period hypothesis, there’s a certain window in which second language acquisition skills are at their peak. Researchers disagree over just how long that window is — some say that it ends by age 6 or 7, while others say that it extends all the way through puberty — but after that period is over, it becomes much harder for a person to learn a new language. It’s not impossible, but children in that critical period have an almost universal success rate at achieving near fluency and perfect accents, while adults’ results are more hit-and-miss. Because children are so much more skilled at picking up a second language than adults, immersion preschools and elementary schools are a popular choice for parents. Students at these schools have math, story time and social studies the way other students do, but their classes are taught in a foreign language. Not only does this give the students ample time to practice the foreign language, but some research indicates that such a program might have other academic benefits, such as higher math scores and sharper critical thinking skills. And learning a second language at such a young age doesn’t hinder any abilities in the child’s native language — it seems a child’s brain is wired so that all linguistic rules, be they native or foreign, are picked up quickly. However, just because a child becomes fluent in Italian, Russian and Portuguese doesn’t mean that he or she will be speaking those languages 50 years later. Without extended exposure to a language, the child’s abilities diminish, so it’s important to provide continued opportunities to practice these skills. anguage is too complex for children to understand. All the people know that if one wants to learn a foreign language, one must understand its grammars and vocabularies. These things can not be easily understood by a child who does not have enough experience. Children are simply reciting the rules of grammars and vocabularies. The mountain like amount of rules and vocabularies are difficult for every people, especially children. As children are reciting the rules of grammars and vocabularies, they are forgetting them gradually to none. As a result, there is no good result for both children themselves and parents. Not everyone is a genius, and so almost of the children can not hold as many languages as their parents’ hopes. So, from my view children should not begin learning a foreign language as soon as they start school.

Sordaria Fimicola Lab Report Essays

Sordaria Fimicola Lab Report Essays Sordaria Fimicola Lab Report Paper Sordaria Fimicola Lab Report Paper The model, Sardinia familial, reproduces wrought the process of Meiosis and their chromosomes cross over in Prophesy I (Stern). S. Familial have different crossover frequencies between the slopes in Evolution Canyon; there are higher crossover frequencies on the SF compared to the NFG. One possible explanation of this outcome is the harsh conditions on the South side causing an increase in crossing over. To prove if climate conditions really did have an effect on crossover, we controlled the conditions in lab on common lab strains of dark and tan Sardinia. Having lab strains of Sardinia familial makes it a good model organism because it has a short life cycle, reduces fruiting bodies, and its easy to keep alive. The defining characteristic of the phylum Somatic is the production of four to eight sexual spores in a sac-like cell called an caucus (Lamb). As stated before, S. Familial reproduces through Meiosis where crossover occurs in Prophesy I. The process of meiosis can cause three patterns to arise in ASCII; a 4:4 pattern has four black spores and four tan spores next to each other. This occurs when there is no cross over between the different strains. A and pattern result from crossover; the set patterns are determined through Meiosis. As soon as Meiosis II is complete and there are four daughter cells in the caucus, the pattern is determined. Mitosis is the final step in completing the process; at the end of meiosis, the four daughter cells divide to produce a total of eight spores. There are five research questions we are trying to answer. What are the challenges in the procedure for mating the different strains? What are the challenges in preparing squashes of peripatetic for scoring ASCII? What evidence demonstrates crossing over has occurred? What is the crossover frequency under optimal growth conditions? And what is the map distance? I will be referring to these questions throughout this report to better our understanding of the labs purpose. In this experiment, we placed four agar blocks from Sardinia on a mating plate. The two different strains, tan and wild type, were alternated so no like strain was next to each other. We placed a lid on the plate and let it incubate for two weeks at room temperature to allow the fungi to reproduce and recombine with the strain next to it. Once finished incubating, we collected samples from one of the lines of black dots between the gars. We put the samples on a microscope slide o score peripatetic squashes by looking for caucus sacs containing black and tan spores. The crossover frequencies of Type A (4:4) for the combined course data were 6,358; Type B ASCII were 05 ASCII, and Type C ASCII were 4,908. Overall, there were a greater number of non-recombinant. Materials and Methods The experiment started through obtaining a mating plate that was divided with a marker into four sections. The quadrants were labeled Tan and Wild Type, making sure no same label was next to each other. The working surface was cleaned and two small squares of agar were cut with a cleaned razor blade room the first strain and two small squares of agar from the second strain. The tan and black strains were placed under the correct label on the plate so the same strain was not next to each other. The plate was covered up with a lid and the agar blocks were left to incubate for two weeks at room temperature. After the incubation period was complete, a line of black dots appeared along the dividing lines on the plate. The squashes were prepared by using an inoculating loop to scrape peripatetic from the center of one of the dividing lines. A sample from the dividing lines was placed on a microscope slide and a drop of water as added followed by a coveralls. A pencil eraser was used to release the ASCII from the peripatetic by pushing down on the coveralls. Under the microscope, the ASCII were observed and recorded to find recombination patterns. The total number of recombinant of Type B ASCII and Type C ASCII was divided by the total amount of the recombinant and non-recombinant counted. The percentage was calculated by multiplying the previous answer by 100. The map distance was found by dividing the percent of the crossovers by 2 because each crossover produced two spores identical to the parents and two spores that resulted from he crossover. Results Table 1. Caucus Scored Non-recombinant # of Type A ASCII (44) Recombinant Total # of ASCII Total # Recombinant ASCII # of Type B # of Type C Class Data 159 125 136 420 261 Section Data 6,358 5,105 4,908 16,371 10,013 Table 2. Crossover Frequencies Frequency of Recombinant ASCII Frequency of Type B ASCII Frequency of Type C ASCII Ratio B/C Data 62. % 29. 7% 32. 4% . 92 61. 2% 31. 2% 1. 04 (egg Figure 1) Figure 1 is one of the many ASCII groups found of recombinant and non- recombinant under a microscope of xx. The eight ASCII circled in red presents a pattern of crossover between the spore color gene and the centimeter. Crossing over occurred between the spore color and the centimeter due to the evidence of the 2:4:2 a nd 2:2:2:2 ASCII patterns found in groups similar to Figure 1. This group of ASCII is not a good representation of recombinant, but it gives an idea of what we saw when we searched for the recombinant. The evidence we obtained from Figure 1 and other groups similar to Figure 1 prove that crossover has occurred between the wild type and tan Sardinia. In the class data, there were 125 Type B recombinant and 136 Type C recombinant cored. Since a total of 420 recombinant and non-recombinant ASCII were found, the crossover frequency of the class data is 62. 1% because we divided the total number of recombinant with the total number of ASCII. The map distance can be calculated as followed: Class: 62. 1%/2=31. 05 units Section: 61. 2%/2=30. Units. This is the distance between the centimeter and its gene from where it crossed over. Discussion This experiment helped to further the understanding of reproduction in Sardinia familial under certain environmental conditions by observing the three types of spaceports patterns. S. Familial reproduced through Meiosis under minimal light and room temperature, creating an assortment of offspring. Two of the spaceports patterns produced are recombinan t, 2:2:2:2 and 2:4:2, therefore proving crossover occurred, shown in Table 1 . Above in Table 2, the recombinant percent frequency of crossover is just over 61% and the map distance is around 30 units. Due to this percentage, believe crossover occurs more often in a certain environment because the percentage frequency is more than 50%. The high crossover frequency reflects map distance; the greater the frequency of combination between two genes, the farther apart they are assumed to be. The lower the frequency, the smaller the distance is between them (Salem). Since map distance can only go up to 50 units, our 30-unit map distance is more than half of the chromosome. This causes me to believe a lot of cross over happened during the two weeks of incubation. More than half of the ASCII found were crossed over, which causes me to believe Sardinia to has a high amount genetic variation. An organism whose offspring is genetically distinct increases the chances of survival (Salem). Would say S. Nicola has a good chance of reproducing and thriving with the amount of recombinant found during lab. From the results, I conclude the room temperature and minimal light in lab affected the outcome of crossover frequency in Meiosis. Some challenges did arise during the lab. One issue we faced was the difficulty of placing the agar in the plate; it kept sticking to the razor blade because it was so sticky. Eventually, the agar were placed in the correct positions, it just took awhile to get them there. The other issue occurred during incubation, which caused a lot of the class Sardinia to be unusable, so groups had to share the usable Sardinia. My Sardinia was one of the ones deemed unusable; therefore I had to share another groups Sardinia. Was surprised to find some differences in the class and section data of recombinant. In the class data, there were more Type C ASCII than Type B and a 62. 1 % crossover frequency, but in the section data, there were more Type B ASCII than Type C and a 61. 2% crossover frequency. Its surprising to me how the number of ASCII types in the class and section data were not consistent. I would have assumed there would either be more of Type B or Type C in both analyses. What I find even more surprising is that despite the differences in recombinant amounts, the percentage crossovers are similar. Because the two pieces of data backed each other up, this could mean that S. Nicola has a crossover percentage around 60% if the growth conditions are room temperature and minimal light. When discovering crossover frequencies were consistent between the class and section, the percentages werent exactly equal to one another. This could possibly be the result of experimental errors. For instance, when scoring the ASCII, I found it difficult to keep track of the ASCII combinations I al ready found. There could have been combination patterns counted more than once on the same microscope slide, resulting in inaccurate data. In future experiments, I would recommend to somehow make aware of the ASCII groups already counted for to be sure the patterns wont get counted multiple times. Taking a photograph or drawing a picture of ASCII groups would be helpful. To back up the results of the experiment, the lab could be performed again, but differently. For future labs, more data should be collected. Adding more ASCII to the experiment would prove results to be more reliable. A higher amount of data will always have titer, more accurate results because there is more consistency of patterns. With more data, the process is more understood. Another alteration of the experiment could be changing the temperature and lighting during the incubation period. The temperature could be made cooler to resemble the North Facing Side of Evolution Canyon to prove the correlation of lower crossover frequencies with a lower temperature (Grabbed). Another possibility would be to make the conditions similar to the South Facing Slope by raising the temperature and increasing the light. Based off the current results, I would assume the crossover would be much higher with an increase in temperature and lighting. The experiment of S. Familial in the lab manual provided evidence that the environment on the South Facing Side causes more cross over between strains. Due to the fact the SF has more light and has a high temperature, I would think lab Sardinia could have an increase in crossover with brighter light and higher heat. This experiment involving Sardinia familial increases the understanding of how it responds to its environment through sexual reproduction. Lamb, Bernard. Inherited and Environmentally Induced

Hate Crimes essay

Hate Crimes essay Hate Crimes essay Hate Crimes essayThe terrorist attacks of September 11, 2001 have led to the considerable increase in the rate of hate crimes against Muslims in the United States. In the first year after the September 11 attacks, the percentage of anti-Islamic hate crimes in the United States rose up to 1,000%. The statistical data on hate crimes against Muslims living in the United States helps to reveal real causes of these practices in order to â€Å"allow law enforcement to accurately prosecute hate crimes on behalf of the community† (American-Arab Anti-Discrimination Committee, 2012). Post-9/11 anti-Muslim and anti-Arab backlash and discrimination affected local and global communities to a great extent. For example, employment discrimination, bullying in schools, insults and other forms of backlash make Arab Americans feel unprotected in the United States (Korgen Furst, 2012). According to recent report, â€Å"the effect on Arab Americans has been so dramatic, that a recent study shows that discrimination and prejudice against Arab-Americans leads to measurable psychological distress and reduced levels of self-esteem and environmental mastery† (American-Arab Anti-Discrimination Committee, 2012). At the same time, hate crimes relate to fear, frustration and/or ignorance because many Americans have negative views toward Arab Americans, and foster stereotyping and prejudice. Some individuals and groups believe that violence directed at Muslims, as a form of revenge, is acceptable more than a decade after 9/11 because of continuous hate toward terrorists. The creation of the anti-Muslim movement is based on two key tactics, which influence the lives of Arab Americans. First, many people consider that the actions of the most radical Muslims are focused on interpreting the Koran, while peaceful Muslims do not follow this way. Second, many people believe that individuals and organizations who promote the representation of â€Å"moderate Islam† in the U.S. a re secret agents operatives in the Muslim plan aimed at destroying the West (Steinback, 2011). Thus, the issue about hate crimes should be addressed in a proper way. Effective solutions should be found to prevent social harm inflicted by hate crimes.

7 Rules for Identifying People by Place Names

7 Rules for Identifying People by Place Names 7 Rules for Identifying People by Place Names 7 Rules for Identifying People by Place Names By Mark Nichol George R. Stewart, if he is remembered today at all, is noted as the writer of Earth Abides, a seminal work in the science fiction subgenre of the postapocalyptic novel. But to some language geeks he is hailed as an onomastician, a scholar of place names. Stewart, in the 1930s, is perhaps best known in the latter role for proposing a schema for how to identify someone according to their place of origin or residence. Journalist and scholar H.L. Mencken was reportedly so impressed with the following distillation that he named them Stewart’s Laws of Municipal Onomastics: 1. Add -n to a place name ending in -a or -ia (Atlantan, Californian). 2. Add -an to a place name ending in -i or sounding like -e (Hawaiian, Baltimorean). 3. Add -ian to a place name ending in -on (Washingtonian). 4. Change -y to -i and add -an to a place name ending in -y (Schenectadian). 5. Add -an to a place name ending in -o (Ohioan). 6. Add -ite or -er to a place name ending in a consonant or a silent -e (New Englander, Seattleite). 7. Delete -s and add -tan to a place name ending in -polis (Annapolitan, for Annapolis). That’s an impressive and helpful set of rules. Unfortunately, many people didn’t get the memo, so we find the rules widely broken. For example, someone from Florida is a Floridian, not a Floridan, and one writes of San Franciscans, not San Franciscoans. Parisians breaks the rules (it should be Parisite ouch or Pariser), as does Chinese (Stewart’s rule dictates Chinan). Then there are classical affectations like Cantabrigian (Cambridge), Novocastrian (Newcastle, in Australia), and Oxonian (Oxford); more or less well-known foreign language alterations such as Flemish (Flanders), Madrileno (Madrid), and Muscovite (Moscow); and references some famous, others obscure based on state nicknames, think â€Å"Bay Stater† (Massachusetts), Hoosier (Indiana), and Nutmegger (Connecticut). Thus, like many other attempts at codifying human behavior or custom, Stewart’s laws are breached as often as they are observed, but they’re still a useful guideline. Ultimately, though, let your fingers do the walking through a dictionary, geographical dictionary, atlas, or other resource. Want to improve your English in five minutes a day? Get a subscription and start receiving our writing tips and exercises daily! Keep learning! Browse the Vocabulary category, check our popular posts, or choose a related post below:Punctuating â€Å"So† at the Beginning of a Sentence50 Idioms About Meat and Dairy ProductsHow to Send Tactful Emails from a Technical Support Desk

Report on the net export component of the aggregate expenditures for Research Paper

Report on the net export component of the aggregate expenditures for the Manitoba macroeconomy - Research Paper Example h in exports was strong in the three year period of 2004 to 2007 but negative growth in exports was experienced by the economy partly in 2008 and more pronounced in 2009. The exports amounted to 26.7 billion dollars in 2009. In spite of the decline in export growth the economy was the third highest in terms of export value. The chart below provides the evidence of the exports of the economy over a definite time period. The exports within Canada actually increased by about 2.4% in the year 2008 but the exports to other countries suffered a decline of 3.1% in the same year. The fall in exports in 2009 is the highest recorded data since 1981. The recession and the economic slowdown was the contributing factor to the slowdown. According to the Manitoba Bureau of Statistics the economy experienced an expansion of 2.2% in 2011. However, according to the major economic forecasters the GDP will increase by 2.4% and 2.2% in 2012 and 2013 respectively. The economy experienced second best annual growth rate over the period of 2006 to 2011. The following chart shows a comparison between the expansions of the Manitoba economy with that of Canadian economy (Province of Manitoba, 2012). The investment survey conducted by Statistics Canada published the report in February, 2012. They projected the capital investment in the economy to increase by 4.7%. This rate is below the rate of growth in capital investment of Canada which is at 6.2%. The private investment is estimated to achieve an expansion of 8.3% while the public investment will increase by 3.1%. The capital investment projection was revised to an expansion by 1.5% from the forecasted value. The total capital investment increased by record amount of 11.4 billion dollars for the year 2011. In the four year period ranging from 2006 to 2010 the economy surpassed the national annual growth in capital investment. In the first half of 2012, the exports on merchandises increased by 8.5% (Baragar, 2011). During the same time the

Why Caledonia Has to Adopt Free Cash Flows Approach and not Accounting Math Problem

Why Caledonia Has to Adopt Free Cash Flows Approach and not Accounting Profit Approach - Math Problem Example Moreover, it involves financial instruments such as inventory, which the corporation can easily convert into money. The cash flow statement can highlight the economic position of the firm and its solvency capacity within that financial period. Alternatively, the accounting profits refer to the gain or loss of the investment of the entrepreneur after the accumulative revenues are subtracted from the expenses (Profit ? = Revenues – Expenses). In addition, the net income is for the whole year (Wayman, 2010). For most corporations, revenues are realized when the money is earned but not received. This means some items can be sold on credit and recorded on the Income Statement as sales even if the money is not actually received. Why Caledonia has to adopt free Cash flows approach and not Accounting profit approach According to Mulford & Comiskey (2005), both the cash flow methods and accounting profits are methods that corporations use to assess their economic performance. However, the concepts of computing these two formulas are different and constitutes of different elements. Cash flows have several qualities that make it preferable than the accounting profits. First, cash flows consider the time value of transactions and money, which is important for the business. It considers the money value in a particular period has a different purchasing power than in a future period. Clearly, numerous economic conditions influence the fluctuation of prices and the accounting profits do not consider this. They assume the price remains constant for a particular economic period. For example, oil prices are affected by global factors such as depletion of oil wells, shortages or regulations, which cause the frequent alteration of the prices to meet the contemporary financial situations. In this instance, the cash flow approach will realize the inflows and expenditures of the new prices of the commodity according to the time of occurrence. Whereas the accounting profit model ignores this and uses the average price of the year in computing its revenues. Therefore, the corporation will be able to measure their liquidity situation more efficiently and thus this will help them in planning their operational functions better. Besides the cash flow model emphasizes real time payment unlike accounting profit is realized later ((Mulford & Comiskey, 2005)). If the corporation acquires finances directly after sales, they can use it when a great opportunity arises. They will not have to postpone their prospects since they have sold items on credit and do not have the actual money. Secondly, the accounting profit approach considers depreciation as an expense item and this is not an actual expense item (Mulford & Comiskey, 2005). Therefore, if the depreciation increases this will mean that the expenses will increase but this is not reflective of the true expense of the business. It is a non-cash amount that the corporation assumes it affects the profitability of the business. However, the cash flows ignore depreciation as cash expense since it does not have a monetary value. If Caledonia utilizes the cash flow approach, its profits will be higher and reflect the true cash position of the business, unlike a net profit figure which will be lower since it comprises of depreciation. Finally, the cash flow method is essential for capital budgeting which requires comparison of the benefits and costs (outflows) of the investment they are taking (Wayman, 2010). Since the cash flow method considers the cash values of the projects, it can be an appropriate basis to calculate the financial progress of the investment. Consequently, the accounting method disregards the cost at the time of initiation of the project. The