An In-N-Out Pay Strategy: Cost Vida’s Decision to Boost Pay

An In-N-Out Pay Strategy: Cost Vida’s Decision to Boost Pay

Katie Perkin had a clear vision of starting her own business after attending college. As a passionate entrepreneur, she was convinced that borrowing a loan will enable her to meet her goal. Perkin’s effective strategic business skills and self-drive allowed her to start Performance sports, a start-up firm whose mission was enshrined in precise customer service, fast delivery, and provision of discounted goods. Following up on these strategies led to the growth of the organization over time. In fact, the organization has a workforce of 16 talented professional specialists remunerated according to their rank, roles, and responsibilities.

Given the growth of Perkin’s organization, she plans to create a new position of purchasing agent to improve efficiency in operations. However, this move implies that Perkins has to determine the salary for the position holder. Therefore, she considers the adoption of a pay-for-performance compensation philosophy already applied by East Valley Sports (competitor). If successful, the philosophy will be expanded to remunerate the rest of the workforce, especially considering the expression of dissatisfaction among customer service representatives.

Question 1: Factors to Consider When Setting Wages For New Positions

Setting the appropriate salaries for the new purchasing agent position can be tricky for Balkin and Perkins. If the pay is too little, chances are that the organization may not attract the right talent. Similarly, if the salary is higher, the operation cost will be higher, thus weighing down on the revenue and profitability (Akerlof et al., 2014). To find a middle ground, Balkin and Perkins examine factors such as skills profile and importance of the new position.

In essence, the management needs to be specific about the set of skills and the roles of the new employee. Investing in talented people stretches the firm’s ability to generate additional revenue hence a return in investment. Additionally, structuring of a new position and staff calls for the organization to consider where most critical roles lie. Considering this, there is a need for the management to source for ways to mitigate potential damages like the anomalous division of responsibilities. The more critical the responsibility is to an organization, the higher the probability of more pay to the employee.

            The factor of demand and supply should also be considered. If the economic prospects are excellent, the firm will incur additional compensation expenses to attract talent. Contrastingly, a tight job market accords the organization with a greater pool of talent to select the best without paying premiums. Lastly, Perkins and Balkin should get insight and information on setting wages from different sources to understand the average compensation rates of competing firms and successful multinationals. Some of the resources available for consultation when establishing wages include professional associations, trade groups, websites, and professional business advisors.

Question 2: Advantages and Disadvantages of Pay-for-Performance Policy

            The pay-for-performance policy is one of the best to improve production and boost performance in an organization. Particularly, this policy is recommendable, especially if the output and motivation level of employees have drastically dropped recently. In most cases, a decreased productivity means that the employees are bored with their jobs or are dissatisfied with the current wage rates. Therefore, the workers will be reinvigorated if the management offers to pay more for attaining the performance targets (Gillam et al., 2012). Eventually, the employees will have a tangible goal to focus on and work toward.

On the other hand, the pay-for-performance policy is detrimental to the corporation, especially if the implementation process is sluggish and slow. For instance, if the philosophy is introduced on a group basis, some workers may be forced to pick up the slack of those employees whose contributions are dismal. Further, immeasurable parts of the job suffer due to the lack of incentive to improve performance in those areas. Besides, pay-per-performance philosophy can increase jealousy among workers within the internal environment if it is observed that hardworking employees are not remunerated fairly for their efforts.

Question 3: A New Payment Plan for Customer Service Representatives

One of the firm’s goals is to provide error-free customer service. Therefore, the employees holding these positions must work harder to meet their objectives. The organization, on the other hand, must fully compensate these employees to avoid instances of dissatisfaction that can affect service delivery in the long run. In light of this, the complaints raised regarding underpayment in relation to the overall revenue generated should be addressed accordingly and promptly. Therefore, the management can propose a basic salary plan and additional pay relative to the contributions of each of the customer service worker. The pay increment should be reviewed periodically (for example once a month) to reflect the efforts of each employee.

If this suggested plan is implemented, the levels of motivation will be restored and a culture of competition among the workers will be introduced. A gradual overhaul of hourly pay and introduction of pay-per-performance philosophy for Performance Sport guarantees the organization’s survival in the marketplace because of the policy’s relativity to service delivery (Barnett & Salomon, 2012).

References

Akerlof, G. A., Dickens, W. T., Perry, G. L., Bewley, T. F., & Blinder, A. S. (2013). Near-Rational Wage and Price Setting and the Long-Run Phillips Curve.Brookings Papers on Economic Activity, 2013(1), 1-60.

Barnett, M. L., & Salomon, R. M. (2012). Does It Pay To Be Really Good? Addressing the Shape of the Relationship between Social and Financial Performance. Strategic Management Journal, 33(11), 1304-1320.

Gillam, S. J., Siriwardena, A. N., & Steel, N. (2012). Pay-For-Performance in the United Kingdom: Impact of the Quality and Outcomes Framework—A Systematic Review. The Annals of Family Medicine, 10(5), 461-468.

Question 1: Globalization of Business

Question 1: Globalization of Business

Engagement in international trade improves the prestige of a small business entity besides job creation and profitability. Furthermore, it provides the most valuable way for leveling seasonal fluctuations. However, there are numerous critical factors to consider before a small business can join a global market. The business owner should get a companywide commitment, given that the workforce must play a critical role internationally, particularly in shipping, production, and purchasing.

Organizations should justify their intention to go global. If this is done, the firm will not only expand its market but also acquire key resources such as technology, brand, energy, and talents. Arguably, a small business should look to international markets as growth opportunity attainable through the introduction of new products internationally to expand the revenue, sales, and customer base. At the same time, the management should brace for an unintended spike in the cost of operations, especially if the targeted international market is characterized by high cost of doing business and competition.

The steps involved when entering the global market include a definition of a business plan for the international environment. It is necessary for the business owner to have plans on how to measure the results. Second, the affordable amount for investment in the international expansion should be determined. Global business experts recommend this to be based on the domestic profits. Lastly, the corporation should strategize not less than a two-year lead time to penetrate the world marked to allow a sensible implementation of the grand global plan.

Question 2: Business Plan

A business Plan refers to a written documentation that describes the business operations, strategies, objectives, and the market conditions. A realistic business plan must include financial forecast and projections of the potential cost of operation. It contains background information on the organizational members attempting to meet the annual targets and goals as outlined. Moreover, business plans targets changes in branding and perceptions of taxpayers, community, clients, and consumers.

            Long term business plan is important in decision making. Essentially, its format and content are determined by the audience and business goals. For instance, a business plan for an NGO (non-governmental organization) discusses the fit between the corporate mission and the available funding. On the other hand, business plans for a bank loan build a realistic and convincing case for an individual or business entity to repay the loan. For a business plan to be successful, the drafter should utilize SWOT analysis tool in accordance with the corporate mission statement. The firm’s activity should be described in detail through an analysis of the business environment. Other issues to be considered include the operations plan, market plan, and the financial plan. Finally, supporting attachments and milestones should be included.

Question 4: Defining the Target Market

Defining a target market is useful for the drafting of an economical marketing campaign. Small businesses and start-ups have lesser resources for product promotion and advertising, hence the need to avoid waste. An early definition of a target market allows business strategists to get their advertisement in front of potential customers without incurring expenses on the non-loyal market segment.

SMS and e-mail marketing campaign are  two of the most useful tools to reach a targeted customer. The business owner ought to be aware of the latest advancement in technology in a fast-evolving world. Personalized communication channels such as these are ideal for interacting with existing and new customers at any given time. Additionally, the firm should conceive a positioning statement to determine how the brand will be set in the market. Most importantly, the carefully worded statement should be differentiated from those of competitors to be noticed easily by those that need to know about it. 

Case 16-6

Case 16-6

A forward exchange contract refers to the organizational agreement to acquire a specified amount of foreign currency at a time. Often, a purchase such as this is conducted at a predetermined rate of exchange (Hodrick, 2014). Moreover, buyers enter these types of contracts to for protection from potential future fluctuations in the rate of exchange of foreign currencies. The main aim of a forward exchange contract is to hedge the position of foreign exchange to minimize or eliminate the risk of loss. Eventually, the move will result in the speculation of the changes and fluctuations in a specified exchange rate to generate profit.

Question 1: Fair Value Hedge

A fair value hedge is a derivative instrument used in balancing out the risk associated with other investments. In this way, the investor can offset the potential losses in the future with regards to the fair value of liabilities or primary assets (Landsman, 2013). Forward exchange contracts (FEC) entered into for fair value hedges are recorded in earnings, where the significance and total value are directly linkable to primary asset holdings. Most importantly, the loss or gain for fair value hedge is highlighted in earnings accumulated during the change period together with the loss or gain on hedged items attributable to similarly hedged risk. 

Forward exchange rate entered into fair value hedges can hardly be accounted for unless the concerned organizations account for the periodic interest rate. Further, the business entities in the hedges must monitor the financial risks through “value-at-risk” models (Barth, 2014). In fact, the organization should always stimulate and calculate the possible rates as derived from the business sales.

Question 2: Foreign Currency Fair Value Hedges

Foreign currency fair value hedges let the corporation focus on business transactions with multinationals. The financial instruments in this type of hedges cannot execute the task of hedging instrument using a foreign currency. Consequently, if a transaction is forecasted, it is well suited to apply these types of hedges.

In a preferred or recognized asset or liability dominated by a foreign currency, an organization establishes the financial gains linked with this hedge type in its earnings (Jin & Jorion, 2012). Even after the corporation recognizes its loss and profit, it lacks an effective system to prevent the exposed positions from fair value hedging. For a foreign currency that has a dominated liability or asset, derivative instruments only must be applied as a hedge.

Question 3: Foreign Currency Cash Flow Hedges

In foreign currency cash flow hedges, the effective portion of derivative loss or gain is reported initially as outside earnings (components of other comprehensive income) but is reclassified into earnings when it is affected by forecasted transactions (Nance et al., 2011). In a debt based on foreign currency, a cash flow hedge is permissible in accounting in order to cover the potential exchange risks.

The financial statements in this type of hedges cannot be used in the evaluation of changes in liabilities or assets to account for risks as recognized in earnings. In addition, the financial results are reported as part of the collective adjustment in the outside income. A reporting such as this is made possible particularly for a derivative designated hedging with exposure to investments outside the home country.

Biblical Application

In 2 Timothy chapter 4 Verse 7-8, the author articulates that the activities undertaken by an individual can help him attain success in the future. By the same token, a firm can lock in a favorable rate of exchange especially in a forward exchange contract.

References

Barth, M. E. (2014). Fair Value Accounting: Evidence from Investment Securities and the Market Valuation of Banks. Accounting Review, 1-25.

Hodrick, R. (2014). The Empirical Evidence on the Efficiency of Forward and Futures Foreign Exchange Markets (Vol. 24). London: Routledge.

Jin, Y., & Jorion, P. (2012). Firm Value and Hedging: Evidence from US Oil and Gas Producers. The Journal of Finance, 61(2), 893-919.

Landsman, W. R. (2013). Is Fair Value Accounting Information Relevant And Reliable? Evidence from Capital Market Research. Accounting and Business Research, 37(sup1), 19-30.

Nance, D. R., Smith, C. W., & Smithson, C. W. (2011). On The Determinants of Corporate Hedging. The Journal of Finance, 48(1), 267-284.

Hyperactivity Stars

Hyperactivity Stars

Space is vast and has multiple galaxies. Some of the stars that are found in distant galaxies move at unprecedented speed across the universe. They are referred to as hypervelocity stars. For decades, astronomers aim to understand the role of black holes and dark matter with regards to this common phenomenon. Their study entails application of technology to detect the motion of stars over a prolonged period of time. Thus, the observation of visible and invisible Milky Way their gravitational waves is important. It is worth noting that secondary sources of information have been used in this study. For instance, Brown (2016) makes references to previous studies on the gravitational acceleration of dark matter.  

The author traces the history of study on dark matter to 1932, where Jan Oort analyzed the rate of dispersion of the nearest stars to the sun. In this way, it is possible to create a three-dimensional model depicting the exact position and rate of movement of stars. With the advancements in space technology, astronomers can now measure gas speed rotation within the Milky Way. Understandably, the utilization of observation as a data collection method reveals that all stars in the Milky Way and other galaxies exhibit a circular movement within 60 000 light-years radius. Furthermore, the elliptical bulge of the galaxy exceeds 6000 light-years, hence a spread in its mass.

 The advantage of using observation as a data collection is that factual information can be gathered in real time. In particular, the astronomers can validate their hypotheses on hypervelocity stars through simulations of the observed outcome. On the other hand, given that hypervelocity stars are remarkably distant from the earth, it is probable that light pollution and gravitational waves can compromise the observations, thus raising questions on the accuracy or validity of the outcome. Still, this data collection method is not only less expensive and realistic but also, scientists are yet to develop a more appropriate technology for intergalactic travel.

The author admits that hypervelocity stars are unique astronomical test particles. Therefore, this exceptionality is useful in useful in revealing the nature of super-massive black holes found at the center of most galaxies including the Milky Way. Undoubtedly, previous studies indicate that a super-massive black hole accelerates star movements. The closer the star is to the core of a black hole, the higher the chances of it being a hypervelocity star.  

Specifically, Brown states that the Milky Way’s center is one of the most studied supermassive black holes because of its close proximity. Observation techniques such as x-ray, RF, and IR have all been used to penetrate the thick layer of dust in the galactic spiral arms. The revelations are remarkable, particularly those provided by Spitzer Space Telescope. Overall, the researcher found approximately 21 hypervelocity stars in the Milky Way alone, signaling that there are hundreds more in other galaxies with supermassive black holes. Additionally, Brown concedes that his observations are limited to the stars nearer to the earth and the Milky Way. Astronomers use hypervelocity stars to map the distributions of dark matter and visible matter in the Milky Way galaxy. In essence, the mapping proves the presumption that weak but massive particles form the core of dark matter on the outskirts of galactic bounds.

Brown concludes that while dark matter is hardly visible, their consequences are observable in hypervelocity stars. In light of this, it is clear that a continued study of hypervelocity stars results in a broader understanding of the effects of the supermassive black holes and dark matter on earth and other universal planets.

References

Brown, W. (2016). Hypervelocity Stars in the Milky Way. Phys. Today, 69(6), 52-58. http://dx.doi.org/10.1063/pt.3.3199

The Human Memory

The Human Memory

There are numerous brain circuits and anatomical structures known particularly to be necessary for human memory. The hippocampus, for example, is a brain structure often associated with multiple memory functions. Dentate gyrus and Ammon’s Horn are the two structures that make up the hippocampus. It is also important to note that this brain structure lies next to the medial temporal lobe and is one of the circuits found in the limbic system.

In humans, the hippocampus has cognitive maps. In one recent study, scientists took single-cell recordings from electrodes implanted in the hippocampus of a rat test subject. What they found out is that some particular neurons were strongly responsive especially when the rat was in a specific location (Hariri et al., 2013). Cells such as these are referred to as place cells and their collections in humans are considered as mental maps. However, the place cells are not only responsive to one unique area. It discovered recently that their activation patterns overlap randomly to form mental maps in the hippocampus. Interestingly, the right side of the hippocampus responds strongly to spatial aspects even as the left side is more oriented to gather context information. Over time, humans that perform a certain task for a prolonged period of time gain experience that builds up useful mental maps. Therefore, professionals like taxi drivers increase the volume of their hippocampus through memorization of city streets and driveways.

            It is true that humans and animals get their environment’s spatial map through hippocampus because this part of the brain stores important information on non-egocentric space. In essence, an ability such as this supports the notion of independence of spatial memory hence the thought process can be manipulated easily. Considering this, it is safe to say that the retrieval of and maintenance of memories are context-dependent and relational. Most importantly, the hippocampus utilizes the reference and working memory.

A person’s ability to remember particular locations precisely is impaired by blocking plasticity in the brain circuits and structures responsible for memory (Zatorre et al., 2014). For example, if the hippocampus of an amnesic patient is severely damaged, he cannot remember or learn the spatial layouts. Even worse, it is a common knowledge that the removal of hippocampus leads to acute impairment of spatial navigation. There are large spatial impairment differences observed in the ventral hippocampus in comparison to the dorsal hippocampus. Ventral hippocampus lesions do not necessarily affect spatial memory. On the other hand, short-term memory processing and retrieval requires dorsal hippocampus. Furthermore, studies indicate that the infusion of amphetamine into this hippocampal region enhances the previously learned spatial locations.

            Notably, the hippocampus has two distinctive memory circuits. One of the circuits (which includes entorhinal-CA1 system) is used in place recognition based on recollection memory. The other circuit has entohinal-debtate-CA1-CA, also referred to as trisynaptic loop and is used to recall memory on places. Trisynaptic loop circuit also facilitates entorhinal-dentate plasticity to boost place recall.

In neuroscience and cognitive psychology, spatial memory records information on an individual’s spatial orientation and his surroundings. Therefore, this allows the person to easily navigate around a familiar geographical location just as a rat uses spatial memory to locate food at the end of a complex maze (Casey et al., 2011). In animals and humans, spatial memory is considered as a cognitive map. Additionally, both long-term and short-term working memory represent spatial memory, specifically in human beings.

References

Casey, B. J., Giedd, J. N., & Thomas, K. M. (2011). Structural And Functional Brain Development and Its Relation to Cognitive Development. Biological Psychology, 54(1), 241-257.

Hariri, A. R., Goldberg, T. E., Mattay, V. S., Kolachana, B. S., Callicott, J. H., Egan, M. F., & Weinberger, D. R. (2013). Brain-Derived Neurotrophic Factor Val66met Polymorphism Affects Human Memory-Related Hippocampal Activity And Predicts Memory Performance. The Journal Of Neuroscience,23(17), 6690-6694.

Zatorre, R. J., Fields, R. D., & Johansen-Berg, H. (2014). Plasticity In Gray And White: Neuroimaging Changes In Brain Structure During Learning. Nature Neuroscience, 15(4), 528-536.

The Future of Big Data in Healthcare

The Future of Big Data in Healthcare

Over the past few years, big data has been a significant buzzword because most business organizations were unaware of how to tackle it. However, it is notable that numerous sectors including healthcare have increased its application to gather new insights that boost the industry through the guarantee of actionable changes (Dinov, 2016). Particularly in healthcare, there is an unprecedented amount of information on patient care within a decade. It implies that today, data is being streamed from almost all the aspects of an individual’s daily life.

1.     Big Data

Big data refers to a complex and large data sets that render traditional data processing methods and applications inadequate or obsolete. Big data is the use of advanced methods of predictive analytics to retrieve the value from data, often to a specific data set size (Milicchio et al., 2016). Big data accuracy yields confidence in decision making, which in turn results in minimized risk and cost.

Health monitors, mobile applications, fitness tracker, electronic medical records, and the social media are sources of useful data and information. Notably, significant efforts have been made in healthcare to digitize the records of patients, especially in the developed countries. In the United States, the government is advancing the big data agenda by providing a massive amount of healthcare data to the public through government websites. As technology advances, new platforms and tools emerge daily to help healthcare in leveraging the ever-expanding data sets in new creative ways. Furthermore, as these tools evolve, healthcare professionals will understand the current and future state of the sector from a wider perspective (Sercar, 2013). Eventually, the move (together with a rapid feedback) will potentially alter healthcare experience of patients and medical professionals.

If big data is leveraged properly, doctors will easily determine the level of risks for chronic diseases such as cancer, diabetes, or obesity to provide preventive healthcare measures. Additionally, big data has a potential to change insurance reimbursement models, especially the best ways to reimburse doctors (Selanikio, 2015). Big data can also radically alter patient satisfaction metrics, planning, staffing, risk mitigation and identification, and drug development.

Recent statistics indicate that healthcare is traditionally lagging behind other sectors because of the concerns about patients’ privacy and confidentiality. However, if positive changes regarding big data in healthcare are observed in the long run, it will result in better options to anticipate, treat, and prevent illnesses. Moreover, physicians can make better decisions if data mining tools are embedded within their workflow to facilitate the process (McCandless, 2012).

2.     Data Mining

Data mining is the extraction of hidden but predictive information from significantly large databases. It is the advanced technique that helps corporations to highlight the most useful and important data in their information warehouses. In essence, data mining tools have a tendency to predict future behaviors and trends hence are handy in healthcare provision. A data mining tools answer business queries traditionally considered as too time-consuming and complex to resolve. In the modern times, doctors can implement data mining techniques rapidly on existing hardware and hardware platforms to improve the value of information resources (Provost, 2013). Besides, the system can be integrated with the latest healthcare products found online.

A data warehouse, on the other hand, is a platform that harbors all the corporate data in a normalized and centralized form. The data is deployable at any time to users for decision support, archiving, or executive reporting. In a physical sense, a data warehouse is an important information repository required by the healthcare facilities to thrive especially in an information age. Data mining technology allows the management of medical facilities to focus on the most vital information in the data gathered on patients’ behavior (Estape et al., 2016). In fact, this technology discovers important information within the data that reports and queries cannot reveal effectively.

3.     Uses of Big Data

It is true that big data has advanced rapidly since 2000. People routinely collect and generate a timeline of their activities by using technology to understand and analyze information. The intersection of these modern trends (also referred to as Big Data), helps businesses in all sectors to become more productive and efficient. In specific, big data in healthcare is applied in the prediction of epidemics, improvement of the quality of life, and provision of a cure for diseases (Doshi et al., 2016). Undeniably, the global population is expanding remarkably because people are living longer. In the West, treatment delivery models are changing at a rapid pace because data drive most of the decisions behind these developments.

Software developers have created apps for use in smartphones. Owners of iPhones, for example, can install pedometers to measure how far they walk in a day, or calorie counters to assist them in planning their diet. Arguably, millions of people use mobile technology to improve their lifestyles and health. In addition, there is a steady stream of wearable devices designed by start-up tech firms like Samsung Gear Fit, Fitbit, and Jawbone that allow the users to track their health progress and upload the data for comparison to that of other device users. It is predictable that in the near future, patients can share this data with doctors for use as part of the physician’s diagnostic toolbox when visited by ailing individuals. In cases where the device user is not sick, their ability to access enormous, ever-growing information database on general public’s state of health ensures that the problems can be spotted early before symptoms can show. Eventually, the healthcare professionals can prepare and provide educational or medicinal remedies in advance (Kolb & Kolb 2013).

A new and essential use of big data is emerging, where data professionals and medical practitioners partner to look into the future and identify problems before they can happen. A classic example of this partnership is seen in Pittsburg Heath Data Alliance (PHDA) that aims to collect data from insurance and medical records, genetic data, social media, and wearable sensors (Milicchio et al., 2016). Thereafter, the group uses the information to draw a clearer comprehensive picture of a patient to provide a tailored package of healthcare.

Furthermore, IBM and Apple have collaborated to design a big data healthcare platform that enables Apple Watch and iPhone users to share data using Wayson Health IBM cloud healthcare service. This project aims at uncovering the latest medical insights from biomedical data and real-time activity of millions of technology users.

Further, telemedicine is gaining a wide acceptance, especially in urban areas. Patients are able to receive medical treatment and assistance remotely, usually in their own homes with the aid of internet connection and a computer. There are hundreds of websites with useful data for self-diagnosis at the moment. Besides, ailing individuals can receive online medical services through one-on-one sessions with qualified healthcare professionals. Essentially, interactions such as these leave a data trail that can be analyzed to improve future services. Then, the valuable information can be integrated into the general public health trends to boost the way people access healthcare.

Medicines treat various diseases affecting the patients. What many people do not know is that big data is used to design the portions and pills provided to the sick. Significant amounts of data and information on applicant enable medical researchers to select the best subjects. Commonly, data sharing arrangements between global pharmaceuticals lead to a breakthrough in healthcare. For example, with the help of big data and data sharing, it was discovered that desipramine, often used as an anti-depressant, can cure acute lung cancer and other chronic illnesses.

Medical data is personal, hence the need for extreme security and exclusive accessibility to a personal physician, and the patient. However, the internet and online platforms crawl with cyber thieves that target confidential medical records for malicious use. Many of them earn more from stolen health data than from hacked credit card information.

4.     Statistical Ways to Analyze Big Data

The data sets in big data are mostly too big and complex to process solely on database management tools. Medical records, large-scale e-commerce data, and military surveillance are examples big datasets that require more than one terabyte of storage. One of the statistical ways to analyze big data is the use of association rule learning. It is a statistical method used to discover intriguing correlations between large databases and variables. Major supermarket chains in the United States applied this method to discover interesting links among the products using the business data obtained from the POS supermarket systems. Particularly, association rule learning is beneficial in the analysis of biological data to discover new relationships, the extraction of information on internet web visitors from the log in information, and monitoring of internet logs to track malicious activities such as phishing or hacking.

            Classification tree analysis is a statistical method applied to the identification of specific categories for new observations. The historical data set is required to ensure consistency and accuracy of the statistical outcomes. In the modern times, statistical tree method is beneficial in the categorization of organisms into new groups, automatic assignment of documents to new classifications, and the development of the profiles of patients or students using online platforms.

            Genetic algorithms are inspired by the work of evolution through natural selection, inheritance, and mutation. Therefore, this mechanism is used in evolving constructive solutions to issues that demand statistical optimization. In this way, the technique allows for scheduling of physicians for emergency medical rooms.

Regression analysis, at a basic level, involves manipulation of independent variables to observe their influence on dependent variables. Essentially, this statistical method describes in detail how the dependent variable data value alters with the variation of the independent variable. Statisticians recommend the use of this technique for continuous quantitative big data such as patient’s age or weight.

Social network analysis was adopted first in the telecommunications industry. Later, sociologists used the statistical technique to analyze interpersonal relations. Currently, the method has gained a wide acceptance, especially in the commercial and healthcare sector, where it is used to study the relationships between people and how it affects their well-being and health. While nodes represent persons within a given network, ties are representative of individual relationships.

5.     Critique of Big Data and Data Mining

            Even though big data effectively detects subtle correlations often missed by the analysis of smaller data sets, it cannot explain the reasons for the correlations or their meaningfulness. Secondly, big data are useful in scientific inquiries but are unsuccessful as a replacement of traditional techniques. For instance, molecular biologists are interested in the inference of 3D protein structure of underlying DNA sequences, which begs the need for the use of big data as one of the numerous available scientific tools. However, big data and data mining cannot be independently relied on to crunch complex genome data to solve the problem, irrespective of how effective these statistical methods are. In fact, there is always a need for basic knowledge and understanding of biochemistry and physics.

            Data mining is associated with the unauthorized collections of information on the behavior of people, hence infringement on personal privacy and ethics. Mined data can be applied in different contexts and instances that beg the questions of legality. In the past, governments through federal agencies such as NSA and CIA have gathered data for law enforcement or national security purposes, thus raising concerns and fears among the citizens. Furthermore, data aggregation (introduced by data mining) poses a threat to a subject’s privacy because the data miner has an access to new but previously anonymous sets of compiled data.

6.     Ideas for Future Applications of Big Data in Healthcare

In future, patients that battle multiple health problems will access care more frequently. However, the utilization of big data will lead to a dramatic slump in the cost of healthcare because the doctors will have the patient’s information in the EHR. The data systems, once fully operational and connected, will notify the providers of problematic trends and data errors for swift intervention. Eventually, savings on late interventions will be attained and the funds can be redirected towards boosting the innovation and system functionality. As information on patients is gathered over time, the system operators have an opportunity to learn and improve the provision of healthcare in future.

References

Dinov, I. D. (2016). Volume and value of big healthcare data. Journal of Medical Statistics and Informatics J Med Stat Inform, 4(1), 3. doi:10.7243/2053-7662-4-3

Doshi, J. A., Hendrick, F. B., Graff, J. S., & Stuart, B. C. (2016). Data, Data Everywhere, But Access Remains a Big Issue for Researchers: A Review of Access Policies for Publicly-Funded Patient-level Health Care Data in the United States. EGEMs (Generating Evidence & Methods to Improve Patient Outcomes), 4(2). doi:10.13063/2327-9214.1204

Estape, E. A., Mays, M. H., & Sternke, E. A. (2016). Translation in Data Mining to Advance Personalized Medicine for Health Equity. IIM Intelligent Information Management, 08(01), 9-16. doi:10.4236/iim.2016.81002

Kolb, J., & Kolb, J. (2013). The big data revolution: The world is changing, are you ready? Chicago, IL: Applied Data Labs.

McCandless, David. The beauty of data visualization. (n.d.). Retrieved May 28, 2016, from http://www.ted.com/talks/david_mccandless_the_beauty_of_data_visualization?language=en

Milicchio, F., Rose, R., Bian, J., Min, J., & Prosperi, M. (2016). Visual programming for next-generation sequencing data analytics. BioData Mining, 9(1). doi:10.1186/s13040-016-0095-3

Provost, F. (2013). Data Science for Business: What You Need to Know about Data Mining and Data-Analytic Thinking.

Selanikio, J. (2015). The surprising seeds of a big-data revolution in healthcare. (n.d.). Retrieved May 28, 2016, fromhttp://www.ted.com/talks/joel_selanikio_the_surprising_seeds_of_a_big_data_revolution_in_healthcarehttps://www.ted.com/talks/joel_selanikio_the_surprising_seeds_of_a_big_data_revolution_in_healthcare.

Sercar, T. (2013). Viktor Mayer-Schnberger and Kenneth Cukier, Big Data: A Revolution That Will Transform How We Live, Work, and Think. OZ Organizacija Znanja, 18(1-4), 47-49. doi:10.3359/oz1314047

Question a: Stockholder’s Equity

Stockholder’s equity refers to the difference between liabilities and assets and when positive, it indicates that the business is valuable (Wang & Williams, 2011). There are five subdivisions listed in the equity section of an organizational balance sheet such as common stock, preferred stock, treasury stock, retained earnings, and additional paid-in capital.

Paid-in capital is the total amount an owner invests in the business (Businss, 2012). It is represented by the difference the stock par value and the amount of money accumulated from the stock sale. For instance, the recorded paid in capital is $9 if common stock share with a par value of $1 is sold for $10. Retained earnings, on the other hand, refers to the total net income earned by the firm which has accumulated over a prolonged period of time. For example, if a business entity incorporated in the year 2010 with a net income of $ 100,000 and $200,000 in 2011 but did not distribute dividends, the balance sheet at the end of 2011 financial year would indicate retained earnings as $300,000.

Treasury stock is the difference between the number of shares sold by a company and the issued shares. In this section of the balance sheet, treasury stock par value, total authorized shares, and the number of outstanding shares are included. Contrastingly, common stocks represent the company’s ownership. Therefore, this section includes common stock par value, outstanding and authorized shares. Lastly, the preferred stock has fixed dividends payable before common stock. The section will include preferred stock par value, issued shares, and outstanding shares.

Question b: Reasons for Subdivisions

            Stockholder’s equity is subdivided because of business creditors. Business laws in most developed countries protect creditors through the establishment of the legal capital concept, which implies to the net amount of assets non-distributable to the stockholders (Libby et al., 2011). Because of this, there is a need for accountants to report the legal capital separately from the shareholder’s investments. Worth noting is that the outstanding shares’ stated or par value in most cases constitute the legal capital of the organization. Still, there are particular kinds of transactions that lead permanent or paid-in capital in excess of legal capital. For example, if the stock is sold at par value, it must be classified as an added paid-in capital.

Question c: Transactions

There are numerous kinds of transactions that lead to permanent capital in excess of stated capital. First, the debt to this account results from liquidating dividends transaction. The liquidating dividend is a payment made by the business entity to the stockholders during partial business liquidation (Dooley, 2011). Often, the amount is not taxable and is conducted using the firm’s capital base.  Second, permanent capital is a product of treasury stock sold below the standard cost. The proceedings, therefore, are debited to ‘Cash’ while the cost of sold shares is credited to the ‘Treasury Stock’ section. Resultantly, the difference between the two is posted as paid-in stock. Third, the capital stock is issued at a premium particularly if the share’s selling cost is higher than the par value. Hence, the amount of premium is the difference between the selling price of the shares and their par-value. Premium is often attainable since the par value is set at a particular value, for instance, $0.001 per share.

Question d: Surplus

The use of the term surplus in business financial statements is discouraged because it does not always imply the excess of assets such as incomes capital or profit (Seward, 2013). There are some instances where surplus refers to a negative outcome, especially when the transactions involve inventories. The use of this term is mainly because of its technicality and ease of understanding among the accountants.  The acceptable substitutes for earned surplus include retained earnings, accumulated earnings, or retained capital. On the other hand, the recommended term for ‘paid-in surplus’ is paid-in capital (Brief &Peasnell, 2013).

References

Business, D. (2012). About Doing Business. The World Bank. 2012a. http://www. doingbusiness. org/about—us.

Dooley, M. P. (1996). A Survey of Literature on Controls over International Capital Transactions. Staff Papers, 43(4), 639-687.

Libby, R., Libby, P. A., & Short, D. G. (2001). Financial Accounting. McGraw-Hill/Irwin.

Seward, G. C. (2013). Earned Surplus--Its Meaning and Use in the Model Business Corporation Act. Va. L. Rev., 38, 435.

Wang, Z., & Williams, T. H. (2011). Accounting Income Smoothing and Stockholder Wealth. Journal of Applied Business Research (JABR), 10(3), 96-104.