M ANAGERIAL ACCOUNTING AND BUSINESS ENVIRONMENT CHAPTER ONE.
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Transcript of M ANAGERIAL ACCOUNTING AND BUSINESS ENVIRONMENT CHAPTER ONE.
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MANAGERIAL ACCOUNTING AND BUSINESS ENVIRONMENT
CHAPTER ONE
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DIFFERENCE BETWEEN FINANCIAL AND MANAGERIAL ACCOUNTING
Financial Managerial Reports for Users Reports for Decision Mks Past Activities Future Activities Comparison Relevance Accuracy Fast Information Entire Organization Segments
BS, IN, CF, SE Dept, Cust, Vend, Empl, Pro YES GAAP NO GAAP External Reports Reports when
needed
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TRADITIONALLY“Idleness Waste Money” or
if manpower and machine are not running you are losing money
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PUSH THROUGH PRODUCTION---OLD
PUSH through Production –old way Three inventories: Raw Materials (RM), Work
in Process(WIP), Finished Goods (FG)
RM | WIP FG Company Queque Results in Large Inventory waiting to
be sold
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THREE APPROACHES FOR IMPROVEMENT
Lean ProductionTheory of ConstraintsSix Sigma
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LEAN PRODUCTION Lean means Less Costs Advantages:
Lower Inventory required Fewer Defects Less Wasted Effort Quicker Customer Response
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LEAN PRODUCTION CON’T
Summaries all theories into 1Value AddedFlow Chart of ActivitiesManufacturing Cell Just in Time (JIT)Supply Chain Management and Continuous Improvement
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VALUE ADDED Value Chain pg 12 Activities that add value per customer Chip Box vs Dove Box
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FLOW CHART
List Processes or Activities How It Is Made
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TRADITIONAL PRODUCTION
Several large Machines with only one job each
Mixing Machine Cutting Machine Wrapping Machine
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MANUFACTURING WORK CELL
One Machine performing several jobs Several Multi-job Machines
Each Machine Mixes-Cuts-Wraps
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JUST IN TIME (JIT)
Pull Through Production--- Customer initiates
RM WIP FG (Customer order) Shipped immediately to customer No queing of inventory
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SUPPLY CHAIN MANAGEMENT AND CONTINUOUS IMPROVEMENT
Suppliers responsible for Quality of Incoming Parts and Materials
Production Workers responsible for Quality during WIP
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THEORY OF CONSTRAINTS
Control of Bottlenecks
Increase capacity to remove bottleneck where process has smallest capacity
Freeway system --- Norwalk on Interstate 5
Throughput time--- Cycle time to manufacture a product
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SIX SIGMA OR ZERO DEFECTS
Non Value Added Identify process that do not add value or
those customer is not willing to pay for Eliminate Non Value Activities Activities that use resources but do not add
value