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American system of manufacturing

The American system of manufacturing was a set of manufacturing methods that evolved in the 19th century. The two notable features were the extensive use of interchangeable parts and mechanization for production, which resulted in more efficient use of labor compared to hand methods. The system was also known as armory practice because it was first fully developed in armories, namely, the United States Armories at Springfield in Massachusetts and Harpers Ferry in Virginia, inside contractors to supply the United States Armed Forces, and various private armories. The name "American system" came not from any aspect of the system that is unique to the American national character, but simply from the fact that for a time in the 19th century it was strongly associated with the American companies who first successfully implemented it, and how their methods contrasted with those of British and continental European companies. In the 1850s, the "American system" was contrasted to the British factory system which had evolved over the previous century. Within a few decades, manufacturing technology had evolved further, and the ideas behind the "American" system were in use worldwide. Therefore, in manufacturing today, which is global in the scope of its methods, there is no longer any such distinction. The American system involved semi-skilled labor using machine tools and jigs to make standardized, identical, interchangeable parts, manufactured to a tolerance, which could be assembled with a minimum of time and skill, requiring little to no fitting. Since the parts are interchangeable, it was also possible to separate manufacture from assembly, and repair - an example of the division of labor. This meant that all three functions could be carried out by semi-skilled labor: manufacture in smaller factories up the supply chain, assembly on an assembly line in a main factory, and repair in small specialized shops or in the field. The result is that more things could be made, more cheaply, and with higher quality, and those things also could be distributed further, and lasted longer, because repairs were also easier and cheaper. In the case of each function, the system of interchangeable parts typically involved substituting specialized machinery to replace hand tools. Interchangeability of parts was finally achieved by combining a number of innovations and improvements in machining operations and machine tools, which were developed primarily for making textile machinery. These innovations included the invention of new machine tools and jigs in both cases, for guiding the cutting tool, fixtures for holding the work in the proper position, and blocks and gauges to check the accuracy of the finished parts.

American system of watch manufacturing

The American system of watch manufacturing is a set of manufacturing techniques and best-practices to be used in the manufacture of watches and timepieces. It is derived from the American system of manufacturing techniques, a set of general techniques and guidelines for manufacturing that was developed in the 19th century. The system calls for using interchangeable parts, which is made possible by a strict system of organization, the extensive use of the machine shop, and quality control systems utilizing gauges to ensure precise and uniform dimensions. It was developed by Aaron Lufkin Dennison, a watch repairman who was inspired by the manufacturing techniques of the United States Armory at Springfield, Massachusetts, which manufactured identical parts, allowing rapid assembly of the final products. He proposed using similar techniques for the manufacture of watches. Before the American system of watch manufacturing was developed, watchmaking was primarily a European business. It involved making certain parts under the roof of a factory while obtaining other parts from piece workers who used their own cottages as workshops.

Asset (economics)

An asset in economic theory is a durable good which can only be partially consumed or input as a factor of production which can only be partially used up in production. The necessary quality for an asset is that value remains after the period of analysis so it can be used as a store of value. As such, financial instruments like corporate bonds and common stocks are assets because they store value for the next period. If the good or factor is used up before the next period, there would be nothing upon which to place a value. As a result of this definition, assets only have positive futures prices. This is analogous to the distinction between consumer durables and non-durables. Durables last more than one year. A classic durable is an automobile. A classic non-durable is an apple, which is eaten and lasts less than one year. Assets are that category of output which economic theory places prices upon. In a simple Walrasian equilibrium model, there is but a single period and all items have prices. In a multi-period equilibrium model, while all items have prices in the current period. Only assets can survive into the next period and thus only assets can store value and as a result, only assets have a price today for delivery tomorrow. Items which depreciate 100% by tomorrow have no price for delivery tomorrow because by tomorrow it ceases to exist. The subfield of asset pricing or valuation is the financial evaluation of the value of such assets; the primary method used by todays financial analysts is the discounted cash flow method. With this method, an assets future cash flows are either assumed to be known with certainty as in a treasury bond which is risk free or estimated. These future cash flows are discounting used present values. The Flow of Funds tables from the Federal Reserve System provide data about assets, which are tangible assets and financial assets, and liabilities. The difference, assets minus liabilities, is net worth.

Average daily rate

Average Daily Rate is a statistical unit that is often used in the lodging industry. The number represents the average rental income per paid occupied room in a given time period. ADR along with the propertys occupancy are the foundations for the propertys financial performance. ADR is one of the commonly used financial indicators in hotel industry used to measure how well a hotel performs compared to its competitors and itself year over year. It is common in the hotel industry for the ADR to gradually increase year over year bringing in more revenue. However, ADR itself is not enough to measure the performance of the hotel. One should combine ADR, occupancy and RevPAR revenue per available room to make a sound judgment on hotel performance.

A Behavioral Theory of the Firm

The behavioral theory of the firm first appeared in the 1963 book A Behavioral Theory of the Firm by Richard M. Cyert and James G. March. The work on the behavioral theory started in 1952 when March, a political scientist, joined Carnegie Mellon University, where Cyert was an economist. Before this model was formed, the existing theory of the firm had two main assumptions: profit maximization and perfect knowledge. Cyert and March questioned these two critical assumptions.

Cash-flow diagram

A cash-flow diagram is a financial tool used to represent the cashflows associated with a security, "project", or business. As per the graphics, cash flow diagrams are widely used in structuring and analyzing securities, particularly swaps. They may also be used to represent payment schedules for bonds, mortgages and other types of loans. In the context of business, and engineering economics, these are used by management accountants and engineers, to represent the cash-transactions which will take place over the course of a given project. Transactions can include initial investments, maintenance costs, projected earnings or savings resulting from the project, as well as salvage and resale value of equipment at the end of the project. These diagrams - and the associated modelling - are then used to determine a break-even point "cash flow neutrality", or to further, and more generally, analyze operations and profitability. See cashflow forecast and operating cash flow.

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