A business plan needs to be realistic, so it is important to set out in detail the constraints that are likely to act as limits on business activity.
Typical constraints facing the business include:
1.The size of the market.
In financial accounting this term often refers to the accounting guidelines or principles of conservatism and materiality.
For more clarity on this term: ...
Definition of IR Constraints / Individually Rational Constraints: IR stands for "individually rational".
Donella Meadows' twelve leverage points to intervene in a system ...
CONSTRAINT - is a limiting factor to business activity.
CONSTRUCTION BUDGET - Money that the builder sets aside for building a structure.
CONSTRUCTION COST BREAKDOWN (CCB) - A form used to breakdown every cost incurred in the building of a h...
These constraints are most likely to directly affect the company's profitability and cash flow. Such a constraint on profitability and cash flow serves as the platform for the TOC management philosophy.
A budget constraint is an accounting identity that describes the consumption options available to an agent with a limited income (or wealth) to allocate among various goods.
Purchase constraints refer to something that could prevent you from investing in a specific mutual fund.
Definition: Factors beyond the control of a consumer or firm which influence economic behaviour.
Related glossary term: ...
Constraints: We will 'Add' the following constraints in the Solver function:
λ1 ≥.≥λk ≥0
All cells in the diagonal matrix, with the exception of the diagonal, should equal zero ...
Constraints - Factors which restrict decision making.
Consumable - A resource attribute representing a type of capacity. A resource with consumable capacity can have its capacity value permanently altered as a result of being tasked, e.g.
Fiscal policy is necessarily constrained by the consideration that.
A debt service solution concept that requires a revenue cash flow in order to set an upper limit of periodic (e.g., annual) debt service. The resulting debt service, if graphed over the life of the issue, is 'shaped' like the revenue line.
Pricing Constraints - Pricing constraints limit the prices a company may set for their goods or services.
Pricing Controls - Pricing controls establish and maintain the maximum price levels goods or services can have, especially during times of inflation or war.
BUDGET CONSTRAINT: The maximum amount that can be spent due to a limited budget.
BUDGET LINE: A graph of a budget constraint.
BUNDLE OF GOODS: A set of specific goods and quantities used to compare price changes over time.
Constraints (also called "action assertions")
Every enterprise constrains behavior in some way, and this is closely related to constraints on what data may or may not be updated. To prevent a record from being made is, in many cases, to prevent an action from taking place.
A constraint is anything that prevents an organization or an individual from getting more of what it wants.
Constraints on spending that under certain circumstances can be violated or even viewed as constituting targets rather than absolute limits.
A money of a country that is expected to drop in value relative to other currencies.
Soft dollars ...
BUDGET CONSTRAINT: The alternative combinations of two different goods that can be purchased with a given income and given prices of the two goods. This budget constraint, also termed budget line, plays a major role in the analysis of consumer demand using indifference curve analysis.
budget constraint an income limitation on a person's expenditure on goods and services. (5)
budget cycle the more than two-year process in which the federal budget is proposed, modified, enacted, and implemented. (29)
budget deficit the amount by which government spending exceeds tax revenues. (29) ...
purchase constraints: Limits on the purchase of shares in a fund.
purchase of property, plant, equipment: Capital outlays to increase, construct, or improve capital assets.
purchase of short-term investments: Items not assigned to purchases, selling of fixed assets, or investments.
theory of constraints (TOC)
a method of analyzing the bottlenecks
(constraints) that keep a system from achieving
higher performance; it states that production cannot take
place at a rate faster than the slowest machine or person
in the process ...
Theory of constraints: A relatively new operations management tool that increases production throughput and decreases inventory levels by identifying bottleneck operations and increasing throughput at those operations.
Theory of Constraints -- Also called constraints management, it is a set of tools that examines the entire system for continuous improvement.
Despite these constraints, which worked sporadically and unpredictably, the benefits of capitalism were widely diffused. Luxuries quickly were transformed into necessities.
They are subjected to budget constraints that dictate that household spending cannot exceed its assets.
Miscellaneous Budgets could include business start up budgets, non-profit budgets and other possible budgets for any project or an event.
1. For an individual or household, the condition that income equals expenditure (in a static model), or that income minus expenditure equals the value of increased asset holdings (in a dynamic model).
Because of width constraints on published charts and the clumsiness of the Bloomberg charts for the TED spread, I'm going to have to split the TED spread's chart into two sections, one from 2004 through early 2007 and the other from early 2007 into the present.
cash-in-advance constraint: A modeling idea. In a basic Arrow-Debreu general equilibrium there is no need for money because exchanges are automatic, through a Walrasian auctioneer.
Well, the theory of constraints is just the idea that an organization is no stronger than its weakest link.
BONDPAR decomposes the return into the elements beyond the manager's control--such as the interest rate environment and client-imposed duration policy constraints--and those that the management process contributes to, such as interest rate management, sector/quality allocations, ...
The development of one type rather other models is to be found in operating efficiency specific to each bank and the regulatory constraints applied by different countries.
In portfolio selection, we often minimize the variance of the portfolio (which is a quadratic function) subject to constraints on the mean return of the portfolio.
Show me type customer whose attitude is one of pickiness on price, either due to his own feeling on the stock or constraints imposed upon him as a fiduciary for a portfolio of stocks (and thus his need to examine the portfolio goals and restraints before transacting).
Mathematical programming An operations research technique that solves problems in which an optimal value is sought subject to specified constraints. Mathematical programming models include linear programming, quadratic programming, and dynamic programming.
An investment policy statement is an important written document that clearly sets out the client's return objectives and risk tolerance over the relevant time horizon along with applicable constraints such as liquidity needs, tax considerations, regulatory requirements, and unique circumstances.
Small business enterprises with cash constraints do not have much scope to grow today, especially if they rely on banks and big financial institutions to bail them out of the crisis. That does not mean that small businesses should be left to perish, however.
Any governmentally-imposed constraint upon the international exchange of goods or services. Such constraints can take the form of tariffs, quotas, exchange controls, or non-tariff barriers (Sec.I).
in connection with some set of constraints defined by software. "The older =+ alternate for += is no longer legal syntax in ANSI C." "This parser processes each line of legal input the moment it sees the trailing linefeed.
The circuit breaker is supposed to disrupt herd behavior and ease capacity constraints. The circuit breaker was conceived after subsequent investigation of the Black Monday sell-off of 1987 revealed that crashing computers, clogged phone lines, and other capacity bottlenecks exacerbated the decline.
The Riegal-Neal Interstate Banking and Branching Efficiency Act of 1994 repealed constraints on interstate banking. This allowed the large regional banks to become national.
While this creates a real and meaningful constraint on how much a specific buyer can offer an acquisition candidate in a highly leverage transaction, it does not necessarily reflect the market as a whole-a market comprised of buyers with vastly different financial resources.
As good as it gets, given the constraints you are operating within. For the concept of optimum to mean anything, there must be both a goal, say, to maximise economic WELFARE, and a set of constraints, such as an available stock of scarce economic resources.
Considered when an entity cannot meet a requirement explicitly as stated due to legitimate technical or documented business constraints, but has sufficiently mitigated the risk associated with the requirement through implementation of other controls. Compensating controls must 1) meet the intent and ...
Capacity management also deals with the capacity of an organization's processes - for example, new product development or marketing - as well as with capacity constraints that arise when various resources are combined.
Sort out time and labor constraints;
1. Decide on the information you need
For anyone trying to grow a business, one of the first tasks is to map the competitive landscape. By understanding the market, your product and competition, you'll be able to react to opportunities as they arise.
Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividend.
Individual and institutional customers as opposed to dealers and brokers.
Any improper or wrongful constraint, manipulation or persuasion whereby the will of a person is overpowered and he is inticed to do or refrain from doing something which he would not do if left to act freely.
- the effects of borrowing constraints on rates of entrepreneurial entry and performance;
- the role played by entrepreneurs in stimulating employment and innovation growth in the economy; ...
Hot Issues - Are stocks which trade at an immediate premium relative to their initial offering price on the effective date. There are restrictions and prohibitions regarding trading in these issues. These constraints apply to brokerage firm employees and their immediate families.
Technique for finding the maximum value of some equation subject to stated linear constraints.
Similar financial terms
Simple linear trend model
An extrapolative statistical model that asserts that earnings have a base level and grow at a constant amount each period.
Building societies do have a good track record of providing good interest rates and low fees to customers. Given constraints on competition in personal banking (people are reluctant to move their accounts to get the best deal), ...
Also, there may be years-of-employment and income constraints. Some popular plans are the 401K and IRA plans. Here, there are no guarantees as to eventual value of plan amount or plan benefits.
of the Defense Production Act (DPA) of 1950 and related executive Order 12656, the Commerce Department is charged with identifying critical defense-related industries, assessing their capability to meet peacetime and national security needs, identifying current and potential production constraints, ...
The validation rules are a subset of the business rules defining constraints on the logicaldata model. They are expressed in the definitions of entities, domains and attributes.
Validated License ...
Scarcity of different resources puts constraints on the amount of product that can be produced using those resources. For example, a business may have limited number of machine hours to utilize in production. Scarce resource allocation decision is also called limiting factors decision.
An operations research technique that solves problems in which an optimal value is sought subject to specified constraints. Mathematical programming models include linear programming, quadratic programming, and dynamic programming.
Personal Finance Headlines
Linear Programming Technical tool used for determining the maximum value of any equation when some stated linear constraints are considered. … [Read more...]
Author: Skip Stamous Filed Under: l Tagged With: L Glossary, Linear Programming
Linear Regression ...
Statement of objectives and constraints for an individual's or organization's approach.
Investment product line (IPL)
The line of required returns for investment projects as a function of beta (nondiversifiable risk).
Such assurance might include explicit constraints against the use of the export embargo as an instrument of foreign policy. Requests for such assurance reflect the desire of countries to have a consistent supply of important raw materials at stable prices.
Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends.
RESTRICTED ASSETS - Assets whose use is subject to constraints that are either (a) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation.
Among the reasons why factoring has not caught on in India are competition from alternative sources of financing particularly bill DISCOUNTING as well as funds constraint and lack of credit information. The task of debt collection is also considered to be a major impediment.
While many companies often have cash ratios less than 1, this doesn't necessarily mean they face short term liquidity constraints. Accounts receivables are expected to eventually convert to cash, and companies often have lines of credit they can use if they need to pay off current liabilities.
the process of creating, combining or dividing different financial instruments in order to achieve a specific financial objective within certain tax and legal constraints.
Français: Ingénierie financière
Español: Técnicas financieras
Financial Futures: ...
In a perfect world, you'd have everything custom made. In a less-than perfect world, you'd buy only the finest quality new items. But if you live within the constraints of a budget, as most of us do, you aren't able to afford everything new.
Investment policies can be specific about how a portfolio is to be invested or grant the portfolio manager broad discretion. They indicate what asset classes are acceptable and impose constraints, perhaps related to the investor's risk aversion, regulatory restrictions or tax status.
Market value of assets minus fair value of liabilities. Used in practice as a risk-adjusted capital measure; specifically, the amount of capital required to meet an explicit solvency constraint (eg a certain probability of ruin).
Efficiency ratio/Cost to income ratio ...
Its main purpose is to analyze the different factors that can increase the market value of companies by improving profit percentage and limiting the risks and constraints involved. It is one of the major branches of finance and is also of great importance to the economy of a nation.
This is beautiful because it makes it almost impossible for you to spend without thinking. (I know you never do this, but somebody you know might benefit from having this constraint.
Rule #3 - Save for a Rainy Day ...
Statement of objectives and constraints for an individual's or organization's approach.
Investment trust ...
In an ideal world, the FAO would be able to provide each student with the full difference between their ability to pay and the cost of education. Due to budget constraints the FAO may provide the student with less than the student's need (as determined by the FAO).
However, it is the insight gained from problem framing, inquiry, and an understanding of an organisation's real commitments and constraints, through a lens of personal reflection, which allows for innovative solutions that lead to systemic change.  ...
Definition: Variant of linear programming in which the objective function is quadratic rather than linear. In portfolio selection, we often minimize the variance of the portfolio (which is a quadratic function) subject to constraints on the mean return of the portfolio.
But lack of knowledge and the fear of a wrong decision may counteract this desire. The process continues, however, if advertisements and expected benefits persuade the consumer to act. Despite budgetary constraints and uncertainty about future needs, ...
is a Document used to seek approval for a specific course of action. Its content should normally:
describe the aim or purpose, and the anticipated benefits;
outline the means of achievement;
nominate the individuals responsible for carrying it out;
list the needed resources;
note any constraints; ...
Avoiding Stage Fright
How to Identify Your Commercial Identifiers
Public Speaking For Dummies Cheat Sheet (UK Edition)
Highlighting the Principles behind the Theory of Constraints
Major Pieces of a Strategic Plan for Businesses ...
Most post-World War II governments have made it a major goal of their economic policies to keep total unemployment in their national economies at relatively low levels (subject to certain practical constraints and trade-offs imposed by their pursuit of other important goals such as economic growth, ...
Cash Flow matching is not widely used because of the constraints that managers have choosing bonds to offset the cash outflows.
All investing is really about making money and preserving wealth; absolute managers manage funds with such a mandate, often having only a numerical value as risk measurement or normal investment management, mutual fund or regulatory constraints.
REVENUE NEUTRALITY -- Constraints on tax reform that it should not change revenues available to government in any significant way.
REVENUE PROCEDURE (REV. PROC.) -- An official published statement by the IRS of US about procedural and administration aspects of the tax laws.
See also: What is the meaning of Index, Transaction, Expense, Banks, Sector?