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Student Version. Repetition is an important component, a key part of learning. In memory, the more times patterns of thought are repeated, the more likely you will be able to recall information.
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Student Version • Repetition is an important component, a key part of learning. In memory, the more times patterns of thought are repeated, the more likely you will be able to recall information. • These PowerPoint slides have been modified from the lecture decks by making them fill-in-the-blank. Why? So that you get an opportunity to repeat a visual cue (from the lecture or the book) via completing text here. • In addition, most text book exhibits have been removed as they are available in your text directly.
Learning Objective 1 Describe just-in-time manufacturing practices.
0 _________-__-_______ Practices • ________-__-_______(JIT), sometimes called _______ manufacturing, is a philosophy that focuses on _______ _______ and cost and eliminating _______ _______ .
0 Reducing _______ • Just-in-time (JIT) manufacturing views inventory as _______ and _______ . As a result, JIT emphasizes _______ or _______ inventory. • Under traditional manufacturing, inventory often _______ _______ _______ problems. • JIT manufacturing attempts to _______ and _______ _______ problems.
0 Reducing Lead Time • _______ _______ , sometimes called _______ time, is a measure of the time that elapses between _______ a unit of product and _______ the unit of product. The __________ time can be classified as one of the following: • ___-____ lead time, which is the time spent in _______ _______ materials into a _______ _______ of product. • ___-_____-________ lead time, which is the time spent while the unit of product is _______ to enter, or _______ _______ to, the _______ production process.
Value-Added Ratio = 0 Reducing Lead Time • The _______-_______ ratio is computed as follows:
Value-Added Ratio = Value-Added Ratio = = ______% Reducing Lead Time • The material in Exhibit 2 arrived was delivered to the customer 125 minutes later. Value was added in only 65 of these minutes. The value-added ratio is calculated as follows: Reducing Lead Time
0 Reducing Setup Time • A _______ is the effort spent preparing an _______ or _______ for a production run. If setups are _______ and _______ , the _______ size (_______ of units) for the related production run is _______ _______ . • _______ batch sizes allow setup costs to be spread over _______ units and, thus, _______ the _______ _______ unit. • Exhibit 3 shows the relationship between _______ times and _______ time.
(_____________________) x (_____________– 1) Total Within-Batch Wait Time = 0 Reducing Setup Time • The lead time for Process Y is longer because each unit has to wait its “_______” while other units in the batch are processed. It takes a unit five minutes for each operation—four minutes waiting and one minute in production. • The _______ time is called _______-_______ _______ time. The total _______-_______ _______ time is calculated as follows:
(___ + ___ + ___) minutes x (___ – 1) Total Within-Batch Wait Time = ______ minutes Total Within-Batch Wait Time = (_____________________) x (_____________– 1) Total Within-Batch Wait Time = Reducing Setup Time • The total within-batch wait time for Process Y is 12 minutes, as computed below.
Value-Added Ratio = Reducing Setup Time • The value-added ratio for Process Y is ____%, as computed below. ____ minutes ____ minutes Value-Added Ratio = = ____ %
Reducing Setup Time • Automotive Components Inc. manufactures engine starters as follows:
The total lead time is 985 minutes, as computed below: Reducing Setup Time • The total within-batch wait time is 936 minutes, as computed below:
Value-Added Ratio = (__+ __ + __) minutes ______ minutes Value-Added Ratio = Value-Added Ratio =______ % (rounded) Reducing Setup Time • Based on the data in the preceding slides, the value-added ratio is approximately ______%, as computed below:
Reducing Setup Time • Automotive Components can increase its value-added ratio by: • ___________________________________________________________________, and • ________________________________________________________________________________________________________________________________________________
0 Emphasizing ________-_______ Layout • If the manufacturing process is organized around a ________ , it is called a ________-_______ layout (or ________ _______ ). • If the manufacturing process is organized around a ________, it is called a ________-_______ layout.
Emphasizing Product-Oriented Layout • Just-in-time normally organizes manufacturing around __________ rather than _________. Organizing work around _________ reduces: • ____________________________________________ • ____________________________________________ • ____________________________________________ • ____________________________________________
Emphasizing _______ _______ • _______ _______ is a _______ approach that grants employees the _______ and _______ to make decisions about operations by: • ______________________________________________. • ____________________________________________________________________________________________.
0 Emphasizing _______ Manufacturing • Producing items only as they are needed by the customer is called _______ manufacturing (or _______ __ _______). • A system that accomplishes _______ manufacturing is often called _______ (Japanese for “_______”). Electronic cards or containers signal production quantities to be filled by the preceding operation.
0 Emphasizing Pull Manufacturing • In contrast, the _______ approach is to _______ _______ based on _______ customer requirements. This principle is called _______ manufacturing (or _______ __ _______).
0 Emphasizing Zero Defects • Just-in-time manufacturing attempts to _______ _______ quality. _______ _______ creates: • _____________________________________________ • _____________________________________________ • _____________________________________________ • _____________________________________________ • _____________________________________________
0 Emphasizing Zero Defects • Six Sigma was developed by Motorola Corporation to improve _____ and manufacturing _____ and consists of five steps: • D_______________ • M _______________ • A _______________ • I _______________ • C_______________ • These five steps form the acronym ________
0 Emphasizing ________ ________ Management • ________ ________ management coordinates and controls the flow of ________, ________, ________, and ________ with suppliers, ________, and ________.
Emphasizing Supply Chain Management • To enhance the interchange of information between suppliers and customers, supply chain management often uses: • ________ ________ ___________(EDI), which uses ________ to communicate • _______ ________ ______ ______(RFID), which are ________ ________ (________ ) placed on or ________ within products that can be read by ________ ________ that allow instant ________ of product ________.
Emphasizing Supply Chain Management • ________ _______ ____________(ERP) systems, which are used to _______ and _______ _______ and supply chain operations.
0 Learning Objective 2 Apply just-in-time practices to a non-manufacturing setting.
Just-in-Time for _________ Processes • Just-in-time practices may also be applied to _______ businesses or administrative processes like: • _____________ • _____________ • _____________ • _____________
0 Learning Objective 3 Describe the implications of just-in-time manufacturing on cost accounting and performance measurement.
0 Accounting for JIT Manufacturing • In just-in-time manufacturing, the accounting system has the following characteristics: • _____________ _____________. There are _______ transactions to record, thus _______ the accounting system. • ___________ _______________. All __-________ work is combined with _______ _______ to form a new account, _____and ___-______(RIP) _______ .
Accounting for JIT Manufacturing • _______ _______. Direct labor is combined with other costs to form a new account titled _______ _______. • _______ _______ measures. _______ _______ measures are emphasized. • Direct _______ of _______ . Indirect labor is _______ assigned to _______ cells; thus, less _______ _______ is allocated to products.
0 Fewer Transactions • The accounting system for just-in-time manufacturing is simplified by _______ the _______ and _______ of product costs by departments. This type of accounting is termed _______ accounting.
Cell Conversion Cost Rate = Cell Conversion Cost Rate = $_____ per hr = 0 Combined Accounts • Anderson Metal Fabricators, a manufacturer of metal covers for electronic test equipment, has an annual budgeted conversion cost of $2,400,000 and 1,920 planned hours of production. The cell conversion cost rate is determined as follows:
Conversion Cost for Cover _______ _______ _______ _______ _______ _______ = × _______ hours × $ _______ $ _______ per unit = = 0 Combined Accounts • Assume that Anderson Metal’s cover product cell is expected to require 0.02 hour of manufacturing time per unit. Thus, the conversion cost for the cover is $25 per unit, as shown below.
0 Combined Accounts • Steel coil is purchased for producing 8,000 metal covers. The purchase cost was $120,000, or $15 per unit. Raw and In Process Inventory 120,000 Accounts Payable 120,000 To record materials purchases. A _______ Raw Materials account is _______ used.
0 Combine Accounts • Conversion costs are applied to 8,000 covers at a rate of $25 per cover. Raw and In Process Inventory 200,000 Conversion Costs 200,000 To record applied conversion costs of the medium-cover line. The _______ ___ _______ __ _______ account is used to _______ the _______ _______ costs.
Materials ($15 x 8,000 units) $120,000 Conversion ($25 x 8,000 units) 200,000 Total $320,000 0 Combined Accounts • All 8,000 covers were completed in the cell. Finished Goods Inventory 320,000 Raw and In Process Inventory 320,000 To transfer the cost of completed units to finished goods. This is a _______ transaction because the raw and in process inventory account balance is _______ _______ the _______.
0 Combined Accounts • Of the 8,000 units completed, 7,800 were sold and shipped to customers at $70 per unit. Accounts Receivable ____,000 Sales ____,000 To record sales. 7,800 × $___ Cost of Goods Sold ____,000 Finished Goods Inventory ____,000 To record cost of goods sold. 7,800 × $____
0 _______ Performance Measures • A _______ measure is operating information that has not been stated in dollar terms. Examples include: • ___________________________ • ___________________________ • ___________________________ • ___________________________ • ___________________________ • ___________________________ • ___________________________
0 Learning Objective 4 Describe and illustrate activity analysis for improving operations.
0 _______ Analysis • An _______ analysis determines the cost of _______ based on an analysis of _______ _______ and other records. An _______ analysis can be used to determine the cost of: • ____________ • ____________ • ____________
0 Costs of Quality • _______ costs are costs of _______ _______ before or _______ the manufacture of the product or _______ of services. • _______ costs are costs of _______ that _______ , _______ , _______ , and _______ products and _______ to ensure that they _______ customer _______ .
Costs of Quality • _______ _______ costs are costs associated with _______ discovered _______ the product is _______ to the consumer. • _______ _______ costs are costs incurred _______ _______ products have been _______ to consumers.
0 _______ of _______ • Exhibit 5 shows the relationship between the _______ of _______ . The _______ and _______ _______ costs decline with increases in the _______ of good units _______ .
0 _______ Chart of Quality Costs • Managers want information displayed so that important problems or issues can be identified quickly. One method of reporting quality cost information is the _______ chart. • A _______ chart is a _______ chart that shows the _______ of an _______ for a number of ranked _______ .
0 Cost of Quality Report • A _______ of quality _______ normally reports the: • _______________________________________ • ______________________________________________________________________________ • _______________________________________
0 _______- _______ Activity Analysis • A _______-_______ activity is one that is _______ to _______ customer requirements. • A non-_______- _______ activity is _______ required by the customer but occurs because of _______, _______, _______, and _______ failures.
Process Activity Analysis • A _______ is a series of _______ that _______ an _______ into an _______ . Common business processes include: • ______________________________ • ______________________________ • ______________________________ • ______________________________ • ______________________________
Process Activity Analysis • Assume that the cost of Masters Company’s four activities is as follows: If 10,000 sales orders are filled during the current period, the per-unit process cost is $8 per order ($80,000/10,000 orders).