Test 1

Question 1

The goal cannot conflict with:

Answer 1

The employees and customers which have necessary conditions

Question 2

Customer and Employees

Answer 2

Customer: product must be competetive
Employee: Need to be engaged

Question 3

Measuring the Goal -CEO

Answer 3

Net Profit

Return on Investment

Question 4

Measuring the goal: middle management level, departments

Answer 4

Production, sales, Purchasing, Logistics, Quality

Question 5

Systems view: high level

Answer 5

Supply->Production->market

Question 6

What would happen if we pushed each station to work at its maximum rate?

Answer 6

Huge buildup of inventory or work in progress while still outputting same amount -suboptimised system.

Question 7

Performance measure

Answer 7

Cost/unit

Question 8

Goal is impacted by

Answer 8

Inventory, Revenue, Costs:
Revenue down = bad
Costs up = bad
Inventory up = bad

Question 9

Throughput accounting -alternative measure

Answer 9

Allows us to know if production improvements will support the goal

Question 10

Throughput

Answer 10

Sales - Raw Materials (Truly Variable costs)

The rate at which the system generates money (eg sales)

Question 11

Inventory/Investment

Answer 11

The money the system invests in things the system intends to sell (stock and equipment)

Question 12

Operating Expense

Answer 12

Money the system spends in turning investment into throughput dollars (lighting, Labour)

Question 13

How do we decide if a change within the production system is good

Answer 13

Change that causes
Throughput to increase
Inventory to decrease
Operating Expense to decrease

Question 14

Suboptimisation

Answer 14

Any improvement in the a in the chain is an improvement on the whole system -AVOID

Question 15

Constraints

Answer 15

People, process, policy, equipment, storage, market

Question 16

Constraints:

Answer 16

Physical:
-capacity
-market
-supply
Policy:
-formal
-informal
-behavioural

Question 17

A 5 step process of on-going improvement for physical constraints

Answer 17

Identify -identify constraint
Exploit -make the most of what we have. squeeze as much of the theoretical capacity that is available from constraint
Subordinate: need support from rest or organisation
Elevate: seeks to obtain more
Inertia: If constraint changes -go back

Question 18

A 3 step process of on going improvment for policy constraints

Answer 18

What to change
What to change to
How to cause the change

Question 19

Lead time

Answer 19

The time it takes to produce an order for a customer is the lead time and can be divided into Setup Time, Process time, Queue time and Wait time.

Question 20

Set up time

Answer 20

When a part is waiting for a process, such as a machine being prepared to work on that part, this is called Setup Time.

Question 21

Process Time.

Answer 21

The time that a part spends being worked on by that machine is Process Time.

Question 22

Queue Time

Answer 22

The time that a part spends in front of a machine or process that is currently working on another part, is called Queue Time.

Question 23

Wait time

Answer 23

And finally when a part is waiting on another part to be completed in an assembly is called Wait Time.

Question 24

Subordination

Answer 24

protect the systems constraints -buffer. Protect constraint ftom shortages

Question 25

Time buffer

Answer 25

Time interval by which we predate the release of work, relative to the date at which the corresponding constraints consumption is schedules

Question 26

Rope

Answer 26

Rope acts as a schedule. It ties the release of jobs through the gate to the constraint schedule. Provides the max gap infront of the constraint.

Question 27

A plant

Answer 27

Convergent points Component parts unique to specific end items machines and tools are general purpose

Question 28

A plant problems

Answer 28

Assembly complains of shortages machine setups are seen as cause of reduced efficiency there is competition by different components for time on machine

Question 29

V Plant

Answer 29

Divergent points End items large compared to raw inputs Equipment is intensive and specialised

Question 30

V Plant Problems

Answer 30

Stealing common intermediate products Machine setups are seen as cause of reduced efficiency Planning horizons

Question 31

T plants

Answer 31

Divergent assembly compnent parts are common to many different end-products The production routings for the component parts do not contain divergent or convergent points

Question 32

T part problems

Answer 32

Stealing at assembly Poor due date performance No synchronised effort

Question 33

Capiral

Answer 33

``` "pool of money used by the business which arises initially from: -shareholder funds -bank and other long term loans once trading begins, from: retained profits/reserves ```

Question 34

Working Capital

Answer 34

Money you put into your operating cycle | Inventories + Accounts recievable-accounts payable

Question 35

Financial Accounting

Answer 35

Goal: to accurately report the financial picture and performance of a business. involves: Classification, Recording, and Interpretation of money transactions Interest to Shareholders, Potential Investors, or the Inland Revenue Department Financial or General accounting is concerned with the classification, the recording and the interpreting of cash transactions so that periodically summary statements can be prepared i.e.: a) The Balance Sheet attempts to measure the financial condition of the firm at the end of a fiscal period. b) The Profit & Loss Statement (or Income Statement) presents the results of past operations.

Question 36

Cost Accounting (Managerial Accounting)

Answer 36

Classification, Recording, and Interpretation of Costs and Projected Costs – i.e. the use of “Costing Systems” to: -Assist managers in forward planning -Assist in price determination and pricing policy -Facilitate the control of operations   -Value inventory as an essential element of profit determination Interest to our Production Managers and Improvement Engineers. Cost Accounting is concerned with providing day to day control over the business

Question 37

Budgets have 3 elements

Answer 37

1. Construct - these have an objective i.e Target Earnings. The budget will be constructed based on limiting factors. 2. Coordinate - adjust each departmental expenditure budget in light of the other limiting factors through consultation 3. Control - comparing the budget with the actual. This is called Variance.

Question 38

Historical Costing Systems

Answer 38

are concerned with the classification and accumulation of actual cost data. takes no account of the cost of replacing the resources used up in the process.

Question 39

Standard Costing Systems

Answer 39

incorporate the use of planned, "standard" costs for products or processes, as well as the actual costs and highlight the variances between actual and standard.

Question 40

Net Profit

Answer 40

Change in throughput - change in OE | =sales - raw materials - OE