Personal Finance and Financial Security
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Questions and Answers

What percent of retirement income may Social Security account for?

  • 10%
  • 25% (correct)
  • 50%
  • 75%
  • Which plan typically has a repayment period of 10 years?

  • Extended plan
  • Income contingent plan
  • Standard plan (correct)
  • Graduated plan
  • Which of the following is NOT considered a type of life insurance?

  • Term
  • Universal (correct)
  • Variable
  • Permanent
  • What type of financial help should be sought early in your career?

    <p>A supportive professional team</p> Signup and view all the answers

    Which action is recommended under the principle of 'Pay yourself first'?

    <p>Prioritize savings over other expenses</p> Signup and view all the answers

    What is a primary characteristic of effective customer intimacy?

    <p>Focus on individual customer needs</p> Signup and view all the answers

    Which aspect of customer intimacy involves decision-making?

    <p>Empowerment of employees to make decisions</p> Signup and view all the answers

    What is a key focus of management systems in customer intimacy?

    <p>Creating results for selected and nurtured clients</p> Signup and view all the answers

    What best describes the approach to relationship building in customer intimacy?

    <p>Deep and lasting client relationships</p> Signup and view all the answers

    Which of the following is NOT a feature of customer intimacy?

    <p>Encouraging loyalty among a diverse customer base</p> Signup and view all the answers

    What is the main advantage of using FIFO inventory management?

    <p>It allows for a higher income figure during periods of rising prices.</p> Signup and view all the answers

    Which inventory tracking method combines both perpetual and physical counts?

    <p>Combination of Systems</p> Signup and view all the answers

    What was the average increase in the cost of the 30 most prescribed brand name drugs from January 2003 to January 2004?

    <p>6.5 percent</p> Signup and view all the answers

    What factor is NOT typically considered when ordering inventory?

    <p>Inventory shrinkage</p> Signup and view all the answers

    What is the key characteristic of vendor managed inventory (VMI)?

    <p>It relies on suppliers to manage inventory levels.</p> Signup and view all the answers

    What is a key element of performance appraisal planning?

    <p>Identifying and addressing developmental needs</p> Signup and view all the answers

    Which aspect contributes to successful performance?

    <p>Clarification of competency key behaviors</p> Signup and view all the answers

    What is an effective method for recognizing and rewarding performance?

    <p>Providing specific and timely recognition</p> Signup and view all the answers

    How should feedback be approached during the performance period?

    <p>It should be ongoing and dialogue-focused</p> Signup and view all the answers

    What gap commonly exists in performance appraisal practices?

    <p>Belief in the importance of feedback versus actual practice</p> Signup and view all the answers

    What factor is linked to the favorable impact of recognition?

    <p>Personal interaction and communication</p> Signup and view all the answers

    What type of management occurs most frequently and involves personal decisions?

    <p>Individual Management</p> Signup and view all the answers

    Which type of management primarily involves interactions between the manager and one other person?

    <p>Interpersonal Management</p> Signup and view all the answers

    Which of the following is not a recommended practice during performance appraisal?

    <p>Focusing solely on monetary rewards</p> Signup and view all the answers

    What does effective performance appraisal contribute to?

    <p>High probability of success</p> Signup and view all the answers

    What is the primary purpose of strategic planning within an organization?

    <p>To ensure the organization is effectively working towards its goals</p> Signup and view all the answers

    Which statement best describes organizational management?

    <p>It deals with actions that affect groups of people.</p> Signup and view all the answers

    What is a common misconception about strategic planning?

    <p>It solely involves short-term objectives.</p> Signup and view all the answers

    What key element is emphasized in strategic planning according to Steiner, Miner, and Gray?

    <p>Selecting the organization's goals and methods for implementation</p> Signup and view all the answers

    In the context of strategic planning, why is it important for an organization to consider its environment?

    <p>To ensure adaptability and relevance in its operations</p> Signup and view all the answers

    What underlying question must be answered for effective strategic planning in a community pharmacy?

    <p>What business does the pharmacy consider itself to be?</p> Signup and view all the answers

    Study Notes

    Financial Security

    • Social security may account for 25% of retirement income
    • Equity in your home, personal savings, pension plans, and retirement savings from 401k plans and IRAs can contribute to retirement income

    Blueprint for Financial Security

    • Spend less than you earn
    • Pay yourself first
    • Take advantage of free money
    • Keep investment expenses low
    • Owe as little as possible
    • Diversify investments
    • Trust the power of average

    Other Personal Finance Issues

    • Student loans:
      • Standard plan: 10 years
      • Extended plan: longer term
      • Other plans: Graduated and Income contingent
    • Planning for college:
      • 529 plans: tax advantage savings plans
    • Life insurance:
      • Term: temporary coverage
      • Permanent: lifetime coverage

    Getting Financial Help

    • Put together a professional team early in your career:
      • Lawyer: for legal guidance
      • Accountant: for tax and financial advice
      • Financial advisor: for investment advice
      • Insurance agent: for insurance needs
      • Doctor: for health care

    Principles of Management and Organization

    • Pharmacists are primarily information providers
    • Levels of management:
      • Individual management: self-management
      • Interpersonal management: interactions between two people
      • Organizational management: decisions affecting large groups

    Strategic Planning

    • A goal without a plan is just a wish
    • Strategic planning: the process of selecting organizational goals, determining policies to achieve them, and establishing methods for implementation
    • Long term strategic planning: ensuring an organization's future success
    • Strategic planning: involves interacting with the organization's environment

    Strategic Planning for a Community Pharmacy

    • Core Process:
      • Organization: Ad-hoc, organic, cellular
      • Management: Decisive, risk-oriented
      • High skills in a loose-knit structure
      • Disjoint work procedures
      • Information technology
      • Person-to-person communications systems
      • Technologies enabling cooperation and knowledge management

    Customer Intimacy

    • Focus on building customer loyalty:
      • Thrive on customer loyalty
      • Cultivate customer relationships
      • Consider customer lifetime value
      • Obsession with core processes of solution development
    • Delegates decision making to employees to close customer contacts
    • Management systems:
      • Creating results for carefully selected and nurtured clients
    • Culture:
      • Embraces specific solutions
      • Deep and lasting client relationships

    Customer Intimacy (cont'd)

    • Customer intimacy is based on marketing the individual needs of a particular customer

    The Operating Model of Customer Intimacy

    • Expert at their customer's business & creating solutions
    • Unmatched value
    • Evolutionary improvement, not revolutionary

    Job Responsibilities

    • Fulfillment of assigned duties:
      • Job analysis, description, other documents
    • Achievement against goals and objectives:
      • Campus, department, and team goals
    • Key behaviors contributing to successful performance:
      • Leadership competencies and key behaviors

    Performance Appraisal

    • Feedback
    • Recognition
    • Reward

    Performance Appraisal: Planning

    • Goal setting
    • Clarification of competency key behaviors
    • Assignment and clarification of job responsibilities
    • Identify and address developmental needs

    Performance Appraisal: Planning (cont'd)

    • Ongoing throughout the performance period
    • Practice as opposed to an event
    • Dialogue as opposed to forms and ratings
    • Information that enables maintenance of a high probability of success
    • Largest gap between belief and practice
    • Lack of planning exacerbates poor feedback

    Performance Appraisal: Recognition & Reward

    • Favorable impact linked with personal interaction
    • Specific and timely
    • Monetary and non-monetary
    • Annual pay increases not clearly connected to any particular accomplishment.

    Tracking Inventory

    • Perpetual: running count of items used
    • Physical: manually counting items
    • Combination of both: most used method

    Vendor Managed Inventory

    • Wholesalers or vendors manage your inventory
    • Works through electronic data interchange (EDI)

    Price Updates

    • Prices of drugs frequently used by elderly rose by 4.3 times the rate of inflation in 2003
    • Prices of drugs from 2001-2004 increased by 3.6 times the rate of inflation

    Price Updates (cont'd)

    • Not only did the prices of drugs increase rapidly, but also more often.

    Accounting

    • FIFO: First In First Out - Higher income figure than LIFO (during rising prices)
    • LIFO: Last In First Out - Tax advantage during periods of rising prices

    Ordering Inventory

    • Order factors:
      • Season
      • One-of-a-kind items/cost of storing
      • Death
      • 3-month supply/mail order
    • Worldwide sales of generic drugs grew by more than 20% a year and reached $80B by 2008.
    • Sales of generics have helped to reduce overall drug costs.

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    Description

    Test your knowledge on essential personal finance strategies, retirement income sources, and the importance of financial planning. This quiz covers topics like student loans, life insurance, and building a professional financial team.

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