Chapter 16 Flashcards
(18 cards)
Production cycle
is a recurring set of business activities and related information processing operations associated with the manufacture of product
Key decisions
- product mix
- pricing
- resource allocation
- cost management
- performance evaluation
Production cycle´s 4 major business activities:
- Product design
- Planning and scheduling
- Production operations
- Cost accounting
Involved: product designers, production staff and accountant
General issues
- inaccurate or invalid master data
- unautohorised disclosure of sensitive information
- loss or destruction of data
(1) Product design - activity
Designing a product that meets customers´needs and requirements (quality, durability, functionality) with the right price
(1) Product design activities create 2 outputs:
- Bill of materials - specifies the part number, description and quantity of each component used in a finished product
- Operations list - specifies the sequence of steps to follow in making the product, which equipment to use and how long each step should take
Product-life-cycle management (PLM) software
software that improves the efficiency and effectiveness of the product design process
(1) Product design - threat and control
- poor product design resulting in excess costs or non-profitable products
Solved with accounting analysis of costs arising and analysis of warranty and repair costs
(2) Planning and scheduling - activity
Develop a porduction plan efficient enough to meet existing orders and anticipated short-term demand while minimising inventories. –> Planning and scheduling the production
(2) Planning and scheduling - two methods
- Manufacturing resource planning (MRPII) - push manufacturing, goods produced in expectation of customer demand
- Lean manufacturing (JIT) - pull manufacturing, goods produced in response to customer order
(2) Planning and scheduling - document
- Master production schedule (MPS) - determines production levels
- Production order - authorise the manufacture of a specified quantity of a particular product, lists operations, quantity and location where finished good should be delivered
- Materials requisition - authorises the removal of the necessary quantity of raw material from store
- Move tickets - documents that identify the internal transfer of parts
(2) Planning and scheduling - threat and control
- Over- and underproduction. Solver with production planning systems, review and approval, restriction of access to prodcution orders and schedules
(3) Production operations - activity
The actual manufacturing of products. When computerised - Computer-integrated manufacturing (CIM)
(3) Production operations - documents
- job-time tickets
2- Move tickets
3- Materials requisitions - a request for suppliers to bid to supply a fixed asset that possesses specific characteristics
(3) Production operations - threats
- theft of inventory
- theft of fixed assets
- poor performance
- suboptimal investment in fixed assets
- loss of inventory or fixed assets du to disaster
- disruption of operations
(4) Cost accounting - costs include:
- raw material used
- labour hours expended
- machine operations performed
- other manufacturing overhead costs incurred
(4) Cost accounting - threats and controls
- inaccurate cost data - use source data automation and data processing integrity controls
- inappropriate allocation of overhead costs - ABC-costing
- misleading reports - use innovative performance metrics
Throughput
= Productive capacity * productive processing time * yield
