Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
34 Cards in this Set
- Front
- Back
|
Production Cycle
|
recurring set of business activities associated with the manufacture of a product
|
|
|
1) product design
2) planning and scheduling 3) product operations 4) cost accounting |
4 main activities of the production cycle
|
|
|
Product design activity
|
objective- meet customer requirements of functionality, durability, quality while minimizing product costs
|
|
|
1) bill of materials
2) operations list |
2 documents produced in the product design activity
|
|
|
bill of materials
|
identifies part #, description and quantities of every component needed to make the product
|
|
|
operations list
|
lists the sequence of steps needed to produce the product, equipment needed and the amount of time each step should take
|
|
|
65-80%
|
Percentage of product costs that are determined in the product design activity
|
|
|
Planning and Scheduling Activity
|
objective - create a production plan that efficiently meets existing orders and short-term expected demand, while minimizing the inventory levels
|
|
|
1) Manufacturing Resource Planning MRP-II
2) Lean Manufacturing |
two common approaches to production planning
|
|
|
Manufacturing Resource Planning
|
an expansion of Materials Requirements Planning MRP - production planning is based on expected future sales
|
|
|
Lean Manufacturing
|
extension of JIT inventory method; in theory, goods should only be produced after a sale has been made. in practice, very short production plans (for suppliers)
|
|
|
1) master production schedule
2) production order 3) materials requisitioning form 4) move ticket |
4 documents produced in planning/scheduling activity
|
|
|
master production schedule
|
document that details how much of the product should be produced during the planning period; used in conjunction with the bill of materials to determine when to purchase raw materials
|
|
|
production order
|
authorization to produce a specified quantity of goods during the planning period
|
|
|
materials requisitioning form
|
authorization to remove materials from the storeroom and place into production
|
|
|
move ticket
|
documents the transfer of materials and parts across the factory floor
|
|
|
Product operations activity
|
process followed to manufacture goods
|
|
|
1) provide information useful in planning/controlling/evaluating product operations
2) provide accurate cost data about products for use in pricing/product mix decisions 3) calculate values for COGS and Inventory that will appear in financial statements |
3 cost accounting activity main objectives
|
|
|
1) job order costing
2) process costing |
2 traditional cost accounting systems
|
|
|
job order costing
|
product costs are accumulated per job; for companies that produce separately identifiable products
|
|
|
process costing
|
product costs accumulated per department/process; used by companies who produce a nearly steady stream of nearly identical products
|
|
|
1) poor job of assigning indirect overhead costs to products
2) performance measures don't reflect the current manufacturing environment |
2 problems with traditional cost accounting systems
|
|
|
total estimated overhead cost / total expected activity level (cost driver)
|
Pre-determined overhead Rate equation
|
|
|
Activity Based Costing ABC
|
Solution to PDR - identifying activities that went into making a product, determine PDR for each activity and assign overhead to products from each activity
|
|
|
develop new performance measures - Throughput
|
solution to performance measures
|
|
|
non-defective units/total available time
|
Throughput simplified equation
|
|
|
productive capacity * productive processing time * yield
|
Throughput long equation
|
|
|
total units produced/total processing time
|
Productive capacity equation
|
|
|
productive capacity
|
total number of units that can be produced given current technology
|
|
|
total processing time/total available time
|
productive processing time equation
|
|
|
productive processing time
|
percentage fo time actually spent working; opposite of down time
|
|
|
yield
|
percentage of non-defective units produced
|
|
|
non-defective units/total units
|
yield equation
|
|
|
throughput
|
number of non-defective units produced over a period of time
|
