1.6 EMA and SCM

Question 1

Types of environmental costs

Answer 1

Explicit costs
-direct cost of modifying tech and process

Implicit costs
-Indirect, admin and legal counsel

Question 2

Target costing

Answer 2

Determine market price (customer research)
Determine desired profit
Calc target cost, sale price - profit margin = cost
Identify how to meet target cost

Pros 
Increases customer satisfaction 
Reduced costs thru effective/efficient design
Helps firm achieve desired profit 
Reduces cost surprise
Cons 
Lack of understating of target costing 
Requires good cost info

Question 3

Life cycle costing

Answer 3

Focuses on cost over entire product life cycle

Pros
Transparency of costs and revenues
Highlights early stage costs
Highlights inter relationships between costs

Question 4

Total quality management

Answer 4

TQM- process of continuous quality improvement
Aspects of quality
Quality of design
-How well does design match wants and needs of customer
conformance quality
- functioning quality

Results 
Lower sales returns
Lower manufacturing costs 
Higher perceived value 
- higher prices
Lower throughput time 
- faster delivery

Question 5

Just in time

Answer 5

JIT demand pull
Output of one station determined by need of next
Demand stats with customer order and works back resulting in low stock level

Pros 
Save storage cost 
Reduced investment in working capital 
Focus on quality 
Improve customer relationships 

Cons
Production stoppages
Inadequate quality management