Financial management and production department, Financial Management

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The production department in any firm is concerned with provision of production facilities, production cycle, skilled and unskilled labor, storage of finished goods, capacity utilization, etc. The financial management has a useful role to play in interaction with the production management as the cost of production assumes a substantial portion of the total cost. The production department may be required to take various decisions like Increase in capacity utilization, installation of a safety device, replacing machinery, installation of materials monitoring device, improvisations of production facilities, etc. All the decisions have financial implications and therefore should be evaluated in the light of the Objective of the maximization of the shareholders wealth. So, the financial management has a role to play.


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