...consumers prospective- True Increasing inventory exposes variability in production processes-false The 5’s do not include-safety Manufacturing cycle time is best described as-time from raw material to finished product. A common JIT layout tactic is to minimize distance-true One goal of JIT partnerships is the removal of in plant inventory by delivery in small lots directly to the using as needed-true JIT supplies have concerns that the JIT firms demands for a small lot size are simply a way of transforming holding costs from HIT firm to Supplies-true Which of the following is true regarding the steps to reducing setup times? All the above Which if the following statements is true about the Kanban system?-The customer workstation signals to supplier workstations when production is needed. Employee empowerment is not needed at the Toyota plant-true Kaizen- continuous improvement. Jidoka-stop production when defect Which of the following is not one of the principles at Toyota? Improvements with scientific method JIT has internal focus while lean production begins with external focus on-Customers Not an attributes to lean operations- Increase space required. Services through out the world use-JIT,TPS and lean Which is the following Ohnos’s 7 wastes defects, over production, waiting, transporting, movement, inappropriate process, inventory 12 The objective of inventory management is to –strike a balance between inventory investment and customer service Which...
Words: 1415 - Pages: 6
...clothing stores located throughout the province of Quebec, Canada. Two years ago, the company introduced new incentive systems for both store managers and sales employees. However, the sales employees began to engage in activities that had an adverse effect on inventory management, employee cooperation, and customer relations. The store managers have tried, with limited success, to correct these problems. Discussion Questions with Suggested Answers 1. What symptom(s) exist in this case to suggest that something has gone wrong? • Employees stand near the store entrance, creating customer service problems, • Occasional conflict among employees over ‘ownership’ of customers • Some parts of store are left unattended, • Employees are unwilling to restock and reorder inventory • Employee morale has fallen, particularly in terms of poorer relations with the store manager 2. What are the underlying problems that have led to these symptoms? In other words, what theories explain what went wrong in this case? Expectancy theory Expectancy theory can be applied to this case to explain employee motivation to hoard customers at the store entrance rather than (a) attend to lower traffic parts of the store and (b) complete inventory duties. The E‐to‐P expectancy is likely least important because it is almost certain that any employee can stand near the front of the store to hoard customers. However, some might point out that the E‐to‐P expectancy drops when every employee tries to hoard customers...
Words: 1021 - Pages: 5
...Chapter 6 Discussion Questions |6-1. |Explain how rapidly expanding sales can drain the cash resources of a firm. | | | | | |Rapidly expanding sales will require a buildup in assets to support the growth. In particular, more and more of the | | |increase in current assets will be permanent in nature. A non-liquidating aggregate stock of current assets will be | | |necessary to allow for floor displays, multiple items for selection, and other purposes. All of these “asset” | | |investments can drain the cash resources of the firm. | | | | |6-2. |Discuss the relative volatility of short- and long-term interest rates. | | | | | |Figure 6-10 shows the long-run view of short- and long-term interest rates. Normally, short-term rates are much more | | |volatile than long-term...
Words: 6464 - Pages: 26
...ACCOUNTING AND FINANCE UNIT CODE: BAC 502: UNIT TITLE: FINANCIAL MANAGEMENT Course Lecturer: F. Abdul LESSON ONE INTRODUCTION 1.1. What is Financial Management Financial management can be defined as the management of the finances of an organisation in order to achieve the financial objectives of the organization. The usual assumption in financial management for the private sector is that the objectives for the company is to maximize shareholders wealth. 1.2. Financial Planning The financial manager will need to plan to ensure that enough funding is available at the right time to meet the needs of the organisation for short, medium and long-term capital. a) b) 1.3. In the short-term, funds may be needed to pay for purchases of inventory, or to smooth out changes in receivables, payables and cash: the financial manager is here ensuring that working capital requirements are met. In the medium or long term, the organisation may have planned purchase of fixed assets such as plant and equipment, for which the financial manager must ensure that funding is available. Financial Management decisions The financial management decisions relate to investment, financing and dividends. The management of risk must also be considered. Investments in assets must be financed somehow. Financial management is also concerned with the management of short-term funds and with how funds can be raised over the long term. The retention of profits is a financing decision. The other side of this...
Words: 6418 - Pages: 26
...The response addresses the queries posted in 1725 words with references. //As per the directions, the section explains about the operational approaches that can be used for service and manufacturing organizations. It discusses the important operational approaches like Customer Relationship Management (CRM), Enterprise Service Management (ESM), Supply chain Management (SCM) and Decision Making Framework (DMF).\ To serve the different needs and expectation of various customers effectively, it is necessary to implement effective operational approaches, which enable the organization to meet the standards of particular industry. There are various operational approaches for a service and manufacturing organization, which are necessary for increasing the productivity and efficiency of the organization. I have chosen consumer relationship management as an operational approach for service organization and supply chain management for manufacturing organization. Operational Consumer relationship management: It is used to handle relationship with customers and assists the front office business processes such as marketing, sales and service. Each contact with the customer is added to the contact history of the customer, which can be used later by the employees to analyze information from the customer's database. This CRM practices the data of customer for a number of purposes such as to manage different campaigns, sales force automation and marketing automation. Enterprise service...
Words: 1819 - Pages: 8
...that they sale to their consumers. So, quality remains key priority for the success of the soft drink industry. Hence, Operation management is very important function of organization and quality management is key aspect of it. The report in hand is the assessment of international operations management of Coca-Cola. The report is structured essentially into five parts. In the first part, quality management portion of CocaCola's is assessed with the help of Fishbone Diagram. In the second part, design review (product design)of Coca-Cola is assessed with the help of fault tree analysis (FTA). In the third part, Total Quality Management (TQM) of Coca-Cola is assessed with the help of Quality Management System(QMS). In the fourth part inventory management of Coca-Cola...
Words: 4930 - Pages: 20
...Client Understand Paper Accounting Theory and Research/ ACC 541 November 21, 2011 To provide your organization accurate financial data, reports and statements, we follow rules developed according to Generally Accepted Accounting Principles (GAAP). Based on GAAP, it is important that we follow certain rules and have accurate client information. You have asked why we are asking for certain information related to certain topics within your organization. An explanation as to why we are asking for this information and related examples is provided in this paper to help assist you in your understanding of what we are doing. Adjusting lower cost or market on inventory valuation Valuing inventory is usually accomplished using one of three methods. FIFO (first in, first out), LIFO (last in, first out), and weighted average. With the FIFO method, the first items purchased would be the first items removed from the inventory. The LIFO method removes the most recently purchased inventory items first. Weighted average is a compromise between FIFO and LIFO. When weighted average is used the total cost of inventory available for sale is divided by the totally number of units available for sale. When weighted average is used the cost of goods sold is reflective of the total period’s operations but the inventory valuation is not representative of future cash flows. Weighted average is typically used in manufacturing where inventories are piled or mixed together. “Many accountants...
Words: 1496 - Pages: 6
...------------------------------------------------- Top of Form Income Statement | | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Gross Profit | Revenues | 0 | 3,644,137 | 4,627,251 | 6,353,663 | - Rebates | 0 | 41,375 | 50,913 | 69,675 | - Cost of Goods Sold | 0 | 1,843,926 | 2,277,733 | 2,884,733 | = Gross Profit | 0 | 1,758,836 | 2,298,605 | 3,399,255 | | | | | | | | | | | | | | | | Expenses | Research and Development | 120,000 | 120,000 | 0 | 0 | + Advertising | 0 | 135,260 | 178,970 | 180,970 | + Sales Force Expense | 0 | 162,203 | 240,746 | 325,262 | + Sales Office Expense | 430,000 | 470,000 | 570,000 | 450,000 | + Marketing Research | 0 | 15,000 | 15,000 | 15,000 | + Shipping | 0 | 43,122 | 52,304 | 67,445 | + Inventory Holding Costs | 0 | 15,210 | 0 | 13,676 | + Excess Capacity Cost | 0 | 63,868 | 0 | 228,381 | + Depreciation | 0 | 25,000 | 25,000 | 50,000 | = Total Expenses | 550,000 | 1,049,663 | 1,082,020 | 1,330,734 | | | | | | | | | | | | | |...
Words: 3878 - Pages: 16
...Detailed Scheduling and Planning Terminology Action message | An output of a system that identifies the need for, and the type of action to be taken to correct, a current or potential problem. Examples of action message in an MRP system include release order, reschedule in, reschedule out, and cancel. Syn: exception message, action report. | Activation | Putting a resource to work | Aggregate planning | A process to develop tactical plans to support the organization’s business plan. Aggregate planning usually includes the development, analysis, and maintenance of plans for total sales, total production, targeted inventory, and targeted customer backlog for families of products. The production plan is the result of the aggregate planning process. Two approaches to aggregate planning exist:1) production planning and 2) sales and operations planning, sales plan. | Advanced planning and scheduling (APS) | Techniques that deal with analysis and planning of logistics and manufacturing during short, intermediate, and long-term time periods. APS describes any computer program that uses advanced mathematical algorithms or logic to perform optimization or simulation on finite capacity scheduling, sourcing, capital planning, resource planning, forecasting, demand management, and others. These techniques simultaneously consider a range of constraints and business rules to provide real-time planning and scheduling, decision support, available-to-promise, and capable-to-promise capabilities...
Words: 4256 - Pages: 18
...Aquilano, 2006). For Riordan to implement this type of plan, an entire new strategy will need to be developed for handling inventory. Currently, each Riordan plant handles inventory independently. Now Riordan must centralize inventory and ordering systems. The two systems need to be centralized because lean production is based on the theory that goods are produced when needed, thus eliminating waste (Chase, Jacobs, & Aquiliano, 2006). Current Situation In China, the suppliers’ on-time delivery rate is only 93%. This is an unacceptable rate in a lean production planning environment. To increase this percentage, the plant will need to have deliveries more frequent so materials are always on hand. This would eliminate a potential bottleneck by having inventory on hand to mitigate a negative effect on production times. Another change to implement is in the receiving of raw materials and the shipping of their finished goods Process Improvement Part of the just in time theory of lean production is it reaches the customer “in time”. This can be accomplished by proceeding with the Shanghai move. This would reduce the steps needed to distribute products to customers. In addition to a decreased throughput time for finished goods to reach the customer, Riordan could save money, thus eliminating wasteful spending. Benefits By centralizing inventory and customer orders, increasing on-time deliveries from suppliers, and eliminating the shipping bottleneck, the Hangzhou plant...
Words: 592 - Pages: 3
...Mary Wang International Financial Reporting Inventory Case Study In the US GAAP, the broad principle given for inventory cost is “the sum of the applicable expenditures and charges directly or indirectly incurred bringing an article to its existing condition and location.” The paragraphs which we looked at included different principles to follow when trying to pin down inventory costs such as guidelines to determine variable overhead costs, fixed overhead costs and normal production capacity as well as costs that are not allowed to be included in inventory. The IFRS takes a much more reality based approach instead of a theoretical one. It describes the cost of inventory to be “all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.” It includes guidelines for the cost of purchase, cost of conversion, other costs and costs that cannot be included in the cost of inventory. All of these are much more specific than the guidelines included in the paragraphs in US GAAP. The Cost of Inventory US GAAP | IFRS | Acquisition Cost | Cost of Purchase (e.g. purchase price, import duties, other taxes, transport and handling) | Production Cost | Cost of Conversion | * Variable Cost | * Variable Cost | * Fixed Cost | * Fixed Cost | | Other Costs (e.g. cost of designing) | Excluded Costs | General & Administrative Expenses | Abnormal Amounts of Wasted Material | Selling Costs | Storage...
Words: 356 - Pages: 2
...Accounting Theory and Research ACC/541 Bethany Bartlett August 19, 2013 Client Understanding Paper To our valued clients at Morton Sales Company, It is my pleasure to have the opportunity to assist your organization with your financial needs. As I was analyzing the working papers given, a request for some additional information needed was submitted. It has been conveyed to my attention that there is questions or concerns in regards to why the information was requested. The concerns include the reason for the adjusting lower cost of market inventory valuation, the capitalizing interest on building construction, the recording of gain or loss on asset disposal, and the adjusting goodwill for impairment. Please rest assured that we will do our best to answer your questions and settle your concerns with anticipation that your trust will be gained and our relationship will flourish tremendously. The Financial Accounting Standards Board (FASB) established clear guidelines that address all the items in question. A clear outline of the FASB generally accepted accounting standards (GAAP) will be given for each item stated above, and how these improvements to Morton Sales Company will help improve Morton Sales Company financial health. Lower Cost of Market The issuance of the ARB No. 43 by The American Institute of Certified Public Accountants (AICPA) and the Financial Standards Accounting Board (FASB) states that lower of cost or market rule apply to all inventories. In this...
Words: 1348 - Pages: 6
...Business and Economics Journal Determinants of short-term debt financing Richard H. Fosberg William Paterson University ABSTRACT In this study, it is shown that both theories put forward to explain the amount of shortterm debt financing that a firm employs have validity. The matching principle correctly predicts that the amount of short-term debt financing that a firm uses is directly related to the quantity of the firm’s current assets. Additionally, other factors that have been shown to affect the levels of long-term debt financing that a firm employs are also shown to affect the amount of short-term debt financing that a firm uses. Specifically, the amount of firm short-term debt financing is shown to be inversely related to the amount of the firm’s non-debt tax shields, growth opportunities, product uniqueness and firm size. Additionally, short-term debt financing was found to be directly related to the quantity of tangible assets the firm owns. Keywords: Debt, Capital Structure, Matching Principle, Collateral, Financing Determinants of short-term, Page 1 111008 – Research in Business and Economics Journal INTRODUCTION The matching principle of finance is the standard theory used to explain the amount of short-term debt financing and other current liabilities that a firm has on its balance sheet. Briefly, the theory states that firms should finance their short-term assets with short-term liabilities (Guin (2011)). This implies that the amount of short-term debt financing that...
Words: 4203 - Pages: 17
...Forecasting Forecasting is one of the most important business functions because all other business decisions are based on a forecast of the future. Poor forecasting results in incorrect business decisions and leaves the company unprepared to meet future demands. The consequences can be very costly in terms of lost sales and can even force a company out of business. Forecasts are so important that companies are investing billions of dollars in technologies that can help them better plan for the future. For example, the ice-cream giant Ben & Jerry’s have invested in business intelligence software that tracks the life of each pint of ice cream, from ingredients to sale. Each pint is stamped with a tracking number that is stored in an Oracle database. Then the company uses the information to track trends, problems, and new business opportunities. They can track such things as seeing if the ice-cream flavor Chocolate Chip Cookie Dough is gaining on Cherry Garcia for the top sales spot, product sales by location, and rates of change. This information is then used to more accurately forecast product sales. Numerous other companies, such as Procter & Gamble, General Electric, Lands’ End, Sears, and Red Robin Gourmet Burgers, are investing in the same type of software in order to improve forecast accuracy. (R. Dan Reid & Nada R. Sanders, 2009) It is not possible to accurately forecast the future. Because of the qualitative nature of forecasting, a business can come up with different...
Words: 1886 - Pages: 8
...ACCT 422 Solutions Auditing Theory and Practice Homework 6 Click Link Below To Buy: http://hwaid.com/ Name: Date: ACCT 422 6381 Auditing Theory and Practice (2158) Homework # 6 Post homework assignment in HW#6 folder. 1. Distinguish between Cash and Cash Equivalents 2. Cash is total amount of paper, coin money, checks , money orders etc which are available on demand while Cash Equivalents are highly liquid assets or investments which matures after 3 months. 3. The following are sales, cost of sales, and inventory data for a company, a wholesale distributor of car accessories. Dollar amounts are in millions. Computation of Gross margin as a percentage of sales and Inventory turnover 2014 2013 2012 2011 Sales 102.8 92.8 88.4 79.6 Cost of sales 82.8 77.2 70.8 64.0 Beginning inventory 10.0 8.4 8.6 7.2 Ending inventory 12.6 10.2 9.4 8.6 Gross margin as a percentage of sales 19.46% 16.81% 19.91% 19.60% Inventory turnover 1.832 2.075 1.967 2.025 . Gross Margin (%) = Revenue – Cost of Goods Sold Revenue Inventory turnover = Cost of goods sold Average inventory a. List several logical causes of the changes in the two ratios. Logical causes for changes in inventory turnover:- • Low sales • Overstocking • Outdated merchandise • Demand • Poor sales methods Logical causes for Gross Margin:- • Production costs • Selling price • Cost of sales • Expenses • Inflation • Quality...
Words: 785 - Pages: 4
