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logical, systematic flow of resources throughout the organization. Its goal is to make the most efficient use of the resources available in order to support the organization
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component of logistics function directs the focus of operations. Concerned with determining what products should be produced, what resource should be available, and what timing is needed
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| focus on product improvement |
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plans the capital resources needed to support production. Concerned with fixed assets
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responsible for planning the specifications for products that will be manufactured. Prepares the bill of materials and operations list
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form that specifies the components of a product, including descriptions and quantities of materials and parts needed
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describes the chain of events that constitute a product’s production. It includes all the necessary operations to be performed, identifying locations, resources used, and standard timing for each phase
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plans timing for production activities, taking into consideration all the open sales orders, inventory needs, and the resources available
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authorize production activities for a particular sales order or forecasted need
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outlines the specific timing required for a sales order, including the dates and times designated for the production run
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concerned with maintaining the capital resources used to support production, including production facilities and other fixed assets such as machinery, equipment, computers, and vehicles
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department that is responsible for managing the placement and development of sufficient qualified personnel (hiring and training workers)
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department that is responsible for managing and recording the movement of inventory in the many different directions it may go throughout the conversion process. To goal is to minimize the cost of maintain inventories
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| Economic order quantities (EOQ) |
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most efficient quantity of products to purchase. Based on the costs of maintaining inventory and ordering materials
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| inventory function concerning the control of raw materials inventory held in storage or in holding areas waiting for processing |
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| basic components of the company’s products, anything from wood, nails, and metal to finished parts purchased |
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| issuance of movement of materials into various production phases |
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| prepared to document the description and quantities of materials taken into production for a specified sale or other production activity |
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Work-in-process inventory
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when inventory is no longer considered raw material and routed out of storage
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| when production is completed and inventory is prepared for the disposition to the warehouse or customer |
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prepared at various stages of production process in order to document the extent of work completed and the resulting level of inventory
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| managing the holding area for finished goods awaiting sale |
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| term commonly used to refer to the major business activity in which a company engages. (production, manufacturing) Involves the day-to-day performance of production activities. |
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follow-up to production, products are inspected for quality before they are moved to the warehouse or shipping area.
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| refers to the additional procedures necessary to bring a product up to its required specification |
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expected costs based on projections of a product’s required resources. Include direct labor, direct material, and overhead
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| Perpetual inventory system |
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| recording purchases as raw materials inventory, recording all the components of WIP for inventories in various stages of production, and recording the total cost of sales for products completed and sold |
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Periodic inventory system
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| updating the inventory and cost of sales accounts only at the end of the period |
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differences between actual costs and the standard costs applied
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| determines the quantity of inventory on hand by actually counting all items |
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Physical inventory reconciliation
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comparing the physical inventory count with the perpetual records
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| Computer-Aided design (CAD) |
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| technique that may be used to enhance engineering function |
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Computer-Aided Manufacturing (CAM)
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complete automation of the production process, including the full replacement of human resources with computers
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| computers that are programmed to perform repetitive procedures |
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Material resource planning (MRP)
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automated scheduling of production orders and movement of materials in the production process
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| Manufacturing resource planning (MRP-II) |
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| considers all manufacturing resources, rather than focusing on materials |
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Enterprise-wide resource planning (ERP)
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Integrate all of the conversion processes into a single software program while still meeting the needs of each functional area
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| Computer-integrated manufacturing systems (CIMs) |
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| integrate all of the conversion processes to allow for minimal disruptions due to reporting requirements or inventory movement issues |
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Just-in time (JIT) production systems
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| concerned with minimizing or eliminating inventory levels and the related costs of maintaining those inventories |
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act of misstating financial information in order to improve financial statement results
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| inclusion of both variable and fixed costs in the determination of units costs for ending inventories and COGS |
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