Reference no: EM132837340

Case Study 1: Cozy Bright Manufacturing

Cozy Bright is the world-leading smart lighting brand, with in-depth exploration in smart interaction, industrial design and lighting experience. They continue to define the high standards in the lighting industry, and enjoy a portfolio of smart home lighting products, including home furnishing lights, table lights, ambiance lights and smart lighting control products. They have shipped over 11 million products worldwide, covering over 100 countries and regions in the globe. Cozy Bright is committed to build a high-quality lighting environment and enable more people to enjoy the fun and convenience of smart lighting.

Cozy Bright employs batch processing supported by centralized computer system with distributed terminals in the departments. Recently, it has been having quality control and budgeting problems, so its CEO has hired you to review the company's operations and internal control procedures. The following describes Cozy Bright's production process.

1.0 Prepare Production Planning Documents

The production process is triggered by a six month marketing forecast of expected sales from marketing department to the production planning and control clerk. From her terminal, the clerk updates the digital production schedule to include the batches of products to be produced during the next quarter. The system automatically prepares the weekly digital work orders, move tickets and material requisitions based on both Bill of Materials and Routing Sheet Files which it sends to the work center supervisor's terminal.

2.0 Prepare and Distribute Production Documents

The work center supervisors, from their terminal computers, access all the digital documents (digital work order, move ticket and material requisition) and print hard-copy of move tickets and materials requisition. The supervisors distribute the move tickets and two copies of the material requisition to each work centers in the production process.

3.0 Obtain Raw Material and Record Labor Time

After receive the documents, employees at each work centers submit two copies of the material requisitions to storekeeping in exchange for raw materials. If additional raw materials are needed beyond the standard quantify, the supervisor issues additional material requisitions. As the production is completed in each work center, the employees send the move ticket to cost accounting department. Employees also record labor time spent on each batch on hard-copy job time ticket, which they send to cost accounting department and payroll department. Finally, upon competition of the batch, the work center supervisors closes the open work order file.

4.0 Updates Raw Material and General Ledger

The storekeeping clerk files one copy of the material requisition and updates the raw materials inventory filesfrom the terminal in his office. The clerk then sends the second copy of the material requisition to cost accounting department. At the end of the day, the clerk perpares a digital journal voucher and posts it to the general ledger control accounts.

5.0 Update WIP and General Ledger

The cost accounting clerk accesses the digital work orders and sets up a Work-In-Process (WIP) account for the batch. The clerk also receives move tickets, job time tickets and material requisitions throughout the production process, which she uses to post to WIP subsidiary ledger. At the end of the day, the cost accounting clerk prepares a digital journal voucher and posts to GL control accounts to reflect the status WIP and to record transfer of WIP to Finished Good warehouse.

Question:

1. Make a Context diagram of Cozy Bright Production Process!

2. Make a DFD Level 0 of Cozy Bright Production Process!