m anagerial accounting and business environment chapter one
TRANSCRIPT
MANAGERIAL ACCOUNTING AND BUSINESS ENVIRONMENT
CHAPTER ONE
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
TRADITIONALLY“Idleness Waste Money” or
if manpower and machine are not running you are losing money
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
THREE APPROACHES FOR IMPROVEMENT
Lean ProductionTheory of ConstraintsSix Sigma
LEAN PRODUCTION Lean means Less Costs Advantages:
Lower Inventory required Fewer Defects Less Wasted Effort Quicker Customer Response
LEAN PRODUCTION CON’T
Summaries all theories into 1Value AddedFlow Chart of ActivitiesManufacturing Cell Just in Time (JIT)Supply Chain Management and Continuous Improvement
VALUE ADDED Value Chain pg 12 Activities that add value per customer Chip Box vs Dove Box
FLOW CHART
List Processes or Activities How It Is Made
TRADITIONAL PRODUCTION
Several large Machines with only one job each
Mixing Machine Cutting Machine Wrapping Machine
MANUFACTURING WORK CELL
One Machine performing several jobs Several Multi-job Machines
Each Machine Mixes-Cuts-Wraps
JUST IN TIME (JIT)
Pull Through Production--- Customer initiates
RM WIP FG (Customer order) Shipped immediately to customer No queing of inventory
SUPPLY CHAIN MANAGEMENT AND CONTINUOUS IMPROVEMENT
Suppliers responsible for Quality of Incoming Parts and Materials
Production Workers responsible for Quality during WIP
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
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