inception, lean has been about cost savings. The proof can be found by going to the founder of the concept. Lean has its roots in the Toyota Production System (TPS) or just-in-time manufacturing. Taiichi Ohno, the primary architect of the TPS, suggested that its goal was reducing costs. Ohno and his consultant, Shigeo Shingo, went so far as to restructure the profit and pricing equation so that its interpretation would be different to emphasize the concept of cost reduction. Often, the selling price
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Historically, countries such as Latin America, Eastern Europe, and most of Asia have been viewed as low-cost manufacturing regions while the U.S., Western Europe, and Japan have been viewed as having high manufacturing costs. But this understanding now appears to have changed. Boston Consulting Group’s (BCG) article entitled The Shifting Economics of Global Manufacturing, How Cost Competitiveness Is Changing Worldwide provides discusses how global manufacturing is rapidly changing. The report
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conformance quality failure. 5. Costs of quality (COQ) reports usually do not consider opportunity costs. Answer: True Difficulty: 2 Objective: 1 6. A control chart identifies potential causes of failures or defects. Answer: False Difficulty: 2 Objective: 2 This is a definition of a Pareto diagram. 7. A cause-and-effect diagram is used to help identify potential causes of defects. Answer: True Difficulty: 2 Objective: 2 8. Allocated cost amounts are an important determinant
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Introduction Sport Obermeyer is a leader in fashion skiwear manufacturing. Skiwear manufacturing is a competitive field with distinct challenges. Skiwear market is just four months long but the design and production process takes over 16 months to complete. Accurate estimates of demand become available only after a year into design and production cycle. The Company also faces long lead times from textile and accessories suppliers. This forces the company to accurately predict the demand early accurately
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Chapter 1 – Reasoning with Economics: Models and Information • Economists base much of our thinking on simplified models of reality that neglect many details o Models that apply to a broad range of situations must be simple, but they can help you think logically no matter what happens in your market. • Why be abstract when you have facts? o Reality is so complex and our mental capacities so limited that we must be selective in what we think about. • Economists are human and they have values
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COM 1. Some of the opportunities and disadvantages of selling books over the Internet are summarized here: Factor Revenue Impact Increase Causes Convenience Large variety of books Customer-specific recommendations Distributor margins Downward price pressure Inability to browse Aggregation (major benefit is for low-volume books) No retail outlets, only warehouses No cashiers required Each customer order is picked and packed Higher outbound transportation costs Instant knowledge
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Guillermo suffered a large decrease in business in the late nineties due to two new competitors entering the market and the local economy rapidly growing causing a spike in the cost of labor. To help with his loss, Guillermo research his competitors both foreign and domestic to see how he could help alleviate rising costs. Concept from Week’s 1 reading Guillermo applied different financial concepts in assessing his situation and while developing a variety of solutions to sustain the future of
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information Revenues and costs Overall profitability Nonfinancial information Effect of decision on employee turnover Environment Overall image of company Relevant Costs and Revenues Whether particular costs and revenues are relevant for decision making depends on the decision context and the alternatives available Different costs for different purposes Relevant costs Costs and revenues that has bearing on the future and Costs and revenues that differ across
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............................................................................................................3 2.1.2 Income Overview............................................................................................................ 5 2.1.3 Cost Overview.................................................................................................................5 2.1.4 Profits Overview......................................................................................................
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ANNUAL COST PURPOSE For investments (purchases) of buildings and equipment, which are expected to last several years, it is reasonable to place their cost on an annual basis over several years, rather than a single year. Viewing cost on an annual basis allows easy comparison to anticipated changes in income or productivity that will be required to pay for the item. For instance, if annual cost of a mix wagon is $3,000, then an equivalent increase in net milk income will cover its cost. For 100 cows
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