Author Archive With all the emphasis today on quality, and studies showing that quality is very important to the leaders of American business, why are so many organizations struggling to achieve and sustain quality systems? The answer is that managers have been inundated for 20 years with a parade of quality initiatives that have promised miraculous results in reducing costs and increasing profits.
Mustra manufactures computer circuit boards. Inventories are kept to a minimum and they maintain a highly trained workforce that operates at full capacity this is achieved by adjusting their price to meet market demand, where necessary.
As new electronic devices are developed by other companies Mustra breaks-down and reverse-engineers the item in order to create a circuit board that will achieve the same functions. Mustra then markets these circuit boards to manufacturing companies which produce the cloned devices. A price premium can usually be charged for these circuit boards for about six months, after which the manufacturers are able to source their circuit boards from other production facilities and so Mustra either reduces their price or finds another new technology that they can mimic.
Hence - flexibility and time-to-market are key to Mustra's strategy. Increasingly, quality defined as the reliability of the product is also important and Mustra has sought to achieve this by investing in xray equipment which allows the circuit boards to be examined for faulty soldering during the insertion process the most common cause of product failure.
The operations at Mustra have suffered from significant levels of rework. This rework has been traced to the labour intensive insertion process.
Sam is considering investing in a computer-controlled flexible manufacturing system FMS. The reduction in rework is expected to lead to significant savings in the first year of operation, but even greater savings in subsequent years. An improvement in revenue is also expected as the time-to-market is improved.
The management accountant has provided the following: Over the past 5 years Mustra has been supplying HanKan with circuit boards for production of a remote controlled car. There are no direct fixed costs associated with the production of these circuit boards. Comment on your analysis.
Explain to the Board of Directors why the investment in the FMS is in the best interests of the shareholders. Comment on the effect that accepting the project will have on Sam's performance evaluation and bonus.
Show, or refer to in the spreadsheet, any supporting calculations.
What changes would you make to Mustral's performance evaluation system to create incentives that will be consistent with their strategy ignore the transfer pricing issue for now. Consider the transfer-price for the circuit board used by HanKan. What target price will be in the best interests for Gemini Ltd?
What are the implications for performance evaluation? Question 2 Wilson Ltd makes computer monitors. Raw materials include a number of hazardous materials that are imported from China. When a monitor is identified as defective in the production process the hazardous materials can be extracted and re-used.
Wilson has made a commitment to improving its environmental performance and has achieved the following results for, Evaluate the changes in environmental performance, has the program been successful?
Briefly explain two ways in which the activity cost information could be used to improve environmental performance.Activity-based costing involves the following steps: ABM is an extension of ABC, from a product costing system to a management function, that focuses on reducing costs and improving processes and decision making.
15 the path toward lean manufacturing. Achieved a true consensus and collaboration between manufacturing, reverse logistics, customer support, call center and warranty service operations, on an international vetconnexx.com: Business Owner at Independent .
Lean Manufacturing techniques, Six Sigma, TQM, or JIT manufacturing is required. Baltimore Aircoil Company is the global leader in sustainable solutions for Baltimore Aircoil Company is the global leader in sustainable solutions for. Apr 19, · TQM was very popular during the late s and early s but was then replaced with concepts of Lean manufacturing.
TQM can be applied effectively under an . TQM TOTAL QUALITY MANAGEMENT Total quality management is a management approach centred on quality, based on the participation of an organisation's people and aiming at long term success.
This is achieved through customer satisfaction and benefits all members of the organisation and society. Lean Manufacturing, Tqm, Abm Essay. the implementation of management philosophies such as Total Quality Management (TQM). Manufacturing Resource Planning (MRP II), and Just-In-Time (JIT).
JIT stresses lean manufacturing; ABM advocates activity-based process improvement; and TOC concentrates on the constraints—the weakest link in the.