1 Flashcards
Customer profitibility analysis
Analysis of revenue streams and service costs associated with specific customers or customer groups
Quality costs
Cost of insuring and assueing quality and cost incurred when quality is not achieved
Conformance costs
Compliance costs . Prevention costs = stop defects occuring in first place. Appraisal costs = quality control measures. money spent identifying defects before reaching manufacture
Non conformance costs
Cost of failure to comply. Internal failure cost = problem identified before product leaves factory. costs money to fix before sending to customers. external failure cost = when defective product deliverd to customer. must replace prodcut and also lose goodwill
return oer facory hour
throughput cont / time on BN resource
cost per factory hour
total factory costs/ total time on BN resource
throughput accounting ratio TPAR
return per factory hour/ cost per factory hour.
tells us if the return > cost then it’s profitable
crtiiscism of TPA
concentrates on short term where business has fixd supply of reousrces and operating expenses including labour are largely fixed.
longer the time frame you look at, the more costs that are variable so harder to apply to the longer term
Kaizen
continuouse improvement via small incremental amounts
BPR
radically redesigned to cost reductin, improve quality and improve customer satisfaction
Target Costing
- do market research
- work out required profit per unit (eg based on ROI)
- target cost = target profit - target price
- calculate cost gap (if projected cost > target cost = cost gap)
- close cost gap. reduce cost of unit
primary activities in value chain
inbound logistics, operartions, outbound logistics, sales and marketing, service
secondary/ support activities in value chain
infrastructure, tech development, HR manageemnt, procurement
data mining
identify patterns and relationships witihn a dataset usually using statistical algorithms
