Also, a low profit margin decreases the price they proposed. For Union Stamping, a low indirect cost of manufacturing, benefit from high company productivity and management efficiency might be the key factor of low price. In conclusion to my cost analysis, I will give a recommendation of which price to take would be fair and reasonable to both Frich Turbo and the supplier, with consideration of their pros and cons. Then, I will explain the steps of implementing and ways of monitoring. ISSUE IDENTIFIED Mr. Fingold, from Frich Turbo Engine Company was in the process of purchasing a replacement valve.
When there is a recessionary gap, expansionary fiscal policy does not makes things better, but worse. Fiscal policy causes interest rates to increase and the Canadian Dollar to appreciate; as a result, there is a decrease of net exports and a decline in the economy. However, expansionary monetary policy causes interest rates to fall, which will provoke international outflows of financial capital. This, in turn, lowers the value of the dollar and makes Canadian goods more desirable. “The net export effect of expansionary monetary policy will be in the same direction as the monetary policy effect”.1 Recommended Course of Action Although both fiscal policy and monetary policy prove to have beneficial effects on an economy during a contractionary period, we believe that the government should use a combination of both policies…… - The money supply may be ineffective, but in the end people want to make sure that they will have money to save up in case of emergencies.
By having this introduced, it increases the private cost of consumption or production. This may then reduce the demand and the output for the particular product which causes these negative externalities. Another reason that taxation is effective is because it can encourage producers to produce less and get better value products through the use of recycling and composting. This also affects the supply curve, shifting it to the left which also increases the price of the factors of production to create those products. For example, there could be landfill tax which encourages people to dump less as it imposes an indirect tax.
Supplier Selection at Casturn Systems (A) What are the benefits and disadvantages of the re-sourcing process in Figure 1? Benefits: * Provides an opportunity for Casturn GMC to find out multiple suppliers’ price point. Casturn CMC can then discuss and gain understanding of the cost structure with suppliers, and further negotiate a lower price for Casturn. * Through e-RFQ, Casturn CMC is able to obtain price quote from a number of identified suppliers efficiently. Disadvantage: * Technical evaluation after price negotiation causes an unfair price competition during auction between high quality suppliers and low quality suppliers.
By following the matching principle all of the costs associated with a particular product, not just its wholesale price, is expensed when the item is sold. Requirement 2 - A Generally, the lower of cost or market method is used to value inventory in order to “avoid reporting inventory at an amount greater than the benefits it can provide” (Spiceland, Sepe, & Nelson, 2013, p. 476). According to Spiceland, Sepe, and Nelson (2013) the “change in replacement cost usually is a good indicator of the direction of change in selling price” (p. 477). When the change in replacement cost is negative the LCM method allows companies to apply the conservatism principle. The conservatism principle involves “recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize revenues and assets when they are assured of being received” (The conservatism principle).
Mantkelow (2014) explains lean manufacturing as based on "finding inefficiencies and removing wasteful steps that don't add value to the end product." Lean operations helps to reduce waste in production by using resources to only produce what the customer is demanding. A company that is using lean operations has measurable throughput. “Every minute that a product is not sold the cost accumulates and the competitive advantage is lost, this is the manufacturing cycle time” (Heizer and Render, 2010) this analysis could have been used to scale down production in the third and fourth quarter when it became obvious there was excess inventory. For starters, there is no value in holding 60 days' worth of inventory, to adopting lean principles would immediately help us to commit to inventory reduction and better alignment between production and demand.
At this point, sales are virtually diminished, pricing is considerably offset from market trends, and the ability to maintain a level of profitability becomes a major challenge. An organization can put forth efforts in the attempt to reverse, or otherwise avoid, the decline stage by a few idealogic strategies, all of which are designed to readapt and conform to newly enhanced demands by the industry and its respective consumers. Most importantly, an organization can empower itself to readapt and act in a proactive manner by analyzing market trends and determining the future scope of a certain type of product or service within a reasnable timeframe prior to the onset of saturation and declination. Perhaps it would be in the best interest of an organization to produce/ provide a product of similar fashion, yet a unique alternative, before actually retiring or discontuing a product. For production to end indefinitely of a specific good, an alternative must be researched, produced, and introduced into the marketplace at the same time to create an equilibrium of market introduction of one product and declination of another.
First what he did was to revise the Product Mix: Exit lines that do not sell and are unprofitable and stay with the following lines: Superbike, Naked, Multistrada, Sports Classic. This will reduce operating expenses, focus R&D on specific needs, and improve efficiencies on maintenance (a savings that can be passed on to the customer). And study the operational expenses: Despite selling more in 2002 they are making less profit than in 1999. This indicates there are issues with operating expenses Second was to analyze the Operational Expenses: Revise outsourcing policies, consolidate retail distribution and consider online distribution
Cost Accounting, 14e (Horngren/Datar/Rajan) Chapter 18 Spoilage, Rework, and Scrap Objective 18.1 1) Managers often cite reductions in the costs of spoilage as a(n): A) major justification for implementing a just-in-time production system B) measurement of improved output quality C) immaterial item that is not to be tracked D) indication of improvement in the accounting system Answer: A Diff: 2 Terms: spoilage Objective: 1 AACSB: Analytical skills 2) Unacceptable units of production that are discarded or sold for reduced prices are referred to as: A) reworked units B) spoilage C) scrap D) defective units Answer: B Diff: 1 Terms: spoilage Objective: 1 AACSB: Ethical reasoning 3) Unacceptable units of production that are subsequently repaired and sold as acceptable finished goods are: A) reworked units B) spoilage C) scrap D) defective units Answer: A Diff: 1 Terms: rework Objective: 1 AACSB: Reflective thinking 4) Costs of poor quality production include the: A) opportunity cost of the plant and workers B) effect on current customers C) effect on potential customers D) All of these answers are correct. Answer: D Diff: 2 Terms: spoilage Objective: 1 AACSB: Reflective thinking 5) Material left over when making a product is referred to as: A) reworked units B) spoilage C) scrap D) defective units Answer: C Diff: 1 Terms: scrap Objective: 1 AACSB: Reflective thinking 6) A production process which involves spoilage and rework occurs in: A) the manufacture of high precision tools B) semiconductor units C) the manufacture of clothing D) All of these answers are correct. Answer: A Diff: 2 Terms: spoilage, rework Objective: 1 AACSB: Reflective thinking 7) Some amounts of spoilage, rework, or scrap are inherent in many production processes. Answer: TRUE Diff: 2 Terms:
On the “stinker” jobs workers would lower their effort or intentionally slow down the production by “goldbricking” or “holding back” and demand price increase. Roy presented his findings of the restriction of output with rough measuring of the same, with estimation on the amounts according to his own work, and fellow operator’s production. What are the main theoretical findings of the article? One of the main focuses in the researches of output