Just In Time
manufacturing supplies is equal to factory overhead
By taking a JIT approach to inventory and product handling, companies can often cut costs significantly. Inventory costs contribute heavily to the company expenses, especially in manufacturing organizations. By minimizing the amount of inventory you hold, you save space, free up cash resources, and reduce the waste that comes from obsolescence.
These are some differences in the general cases.FINISHED PRODUCT INVENTORYRAW MATERIAL INVENTORYUsually there is no lead timeUsually there is a lead timeQuantities reach the inventory individually or by groupsQuantities reach the inventory all togetherThe holding cost is greater than the holding cost for the raw material inventoryThe holding cost is less than the holding cost for the finish product inventoryproduction starts if the inventory is emptyproduction stops if the inventory is emptyUsually is smaller in size than the raw material inventoryUsually is bigger in size than the finish product inventoryQuantity size depends on the demandQuantity size depends on the productionproduction stops if the inventory is fullproduction starts if the inventory is fullExcess quantity in the inventory means marketing methods need to be improvedExcess quantity in the inventory means manufacturing methods need to be improvedproduction quality can be measured in these inventoryproduction quality can not be measured in these inventory
beginning work in process + requisted for manufacturing ( direct material + direct labor + man. overhead ) = cost of goods completed + ending work in process
The systematic approach to quality started in industrial manufacturing during the ....and process cycle define the core elements of quality management in VET ...
manufacturing supplies is equal to factory overhead
By taking a JIT approach to inventory and product handling, companies can often cut costs significantly. Inventory costs contribute heavily to the company expenses, especially in manufacturing organizations. By minimizing the amount of inventory you hold, you save space, free up cash resources, and reduce the waste that comes from obsolescence.
1 - Raw material Inventory 2 - Work in process inventory 3 - Finished Goods inventory
25 times for manufacturing companies
Increase Inventory - Purchase Dr - InventoryCr - Accounts Payable or CashIncrease Inventory - Manufacturing Completion Dr - Inventory (Finished Goods)Cr - Work in Process or Raw Materials Movement in Manufacturing - Beginning Production Dr - Inventory - Work In ProcessCr - Inventory - Raw Materials Sale of Inventory Dr - Accounts Receivable or CashCr - Inventory - Finished Goods
3
centralized approach
1. Materials Inventory 2. Work in Process Inventory 3. Finished Goods Inventory
Decentralized approach.
Beginning work in process inventory + total manufacturing costs incurred - ending work in process inventory
Whenever a sale is made or units of a product are consumed in the manufacturing process, the product is deleted from inventory and made part of a history file that can be reviewed manually or automatically
All fixed costs.