Glossary - Agribusiness Management - page 432

logistics management One of the four functions of management (along with operations
management); involves the set of activities around storing and transporting goods and
services from manufacturer to buyer.
long-range budget A budget that is generally more than one year in scope.
long-term liabilities Liabilities that are scheduled to be repaid over one year or longer,
such as bonds, mortgages, and long-term loans.
long-term loans A temporary grant of money from a lender to be repaid over a period of
more than fi ve years.
loss-leader pricing A pricing method that involves offering one or more products at a
signifi cantly reduced price for the purpose of attracting additional customers who will
purchase other regularly priced items.
lot-size inventory See cycle inventory .
m acroeconomics The study of how consumers, businesses, and governments in the aggre-
gate interact to allocate scarce resources; includes topics such as infl ation, interest rates,
gross domestic product, and fi scal and monetary policy.
make-to-order strategy A production approach where the fi rm actually builds to
order.
make-to-stock strategy A production approach where the fi rm is producing for inventory,
and the production occurs before the actual sale is made.
management The art and science of successfully pursuing the organization's desired
results with the resources available to the organization.
management by exception A management philosophy with the basic premise that man-
agement should not spend time on areas that are progressing according to plan,
but should identify and concentrate on areas that are not generating acceptable
performance.
management by objectives (MBO) A management philosophy introduced by Peter
Drucker in 1954 whereby the supervisor and the subordinate jointly set objectives that
both agree are reasonable and in line with corporate goals, and then determine how
performance will be measured in each area of major responsibility.
manager The person charged with the responsibility of planning, organizing, directing
and controlling the activities of a business organization to accomplish the objectives
established by the owners.
managerial accounting Financial record keeping for the purpose of helping managers
guide the operation of the business and make more effective management decisions that
are consistent with the needs, objectives and goals of a fi rm.
manipulative autocrat A leadership style in which the manager creates the illusion that
employees are participating in the decision-making process; another form of autocratic
leadership.
m anufacturer-direct distribution system A marketing channel in which the manufac-
turer sells directly to the farmer or food customer.
m anufacturers Organizations that develop through research and development the inputs
needed by agricultural producers to produce food and fi ber.
manufacturers' sales offi ces and sales branches Wholesale divisions or subsidiaries
typically run by large manufacturing or processing fi rms to market their own products.
marginal cost In economics, the additional cost incurred in producing one more unit; the
change in total cost divided by the change in output.
marginal rate of substitution In economics, the relationship between two inputs in the

production process.