Creditors also provide funds, but unlike owners, they want the funds returned to them at a specified time with a profit. Basically the company rents money for a period of time and the rental charge is interest. Interest is usually specified as a percentage of the amount borrowed. Raw Materials, 2. Work in process, and 3.
Companies leave a portion of their funds in a checking account.
This is to allow the company to pay bills as they are due and to take into consideration the lag between investments in inventory and accounts receivable. The actual implementation of strategy comprises the operating activity of the company. Procurement is responsible for this function at the Cherokee Plant. Material management is responsible to have the materials on site for manufacturing. The administrative activities support all of the above activities.