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Inappropriate standards (or targets):
This is a problem arising from deficiencies in planning. If not enough time and resources are devoted to setting accurate standards in the first place, and if they are not kept up to-date, subsequent performance is highly likely to deviate from what was expected.
Mis-measurement of actual results: Scales may be misread, the pilfering of wastage or materials may go unrecorded, items may be wrongly classified (as material X3 say, when material X8 was used in reality), or employees may make ‘cosmetic’ adjustments to their records to make their own performance look better than it really was.
Implementation breakdown:
This means that for a variety of causes employees will not always implement the plan in the way that was intended. The classic example is the purchase of raw materials at a lower than budgeted price, causing quality problems for production. Such problems may arise whether employees act with the best intentions or whether they deliberately take their own course because they do not agree with the plan. They may also be caused by poor communications or inadequate training.
SENSITIVITY ANALYSIS OF EOQ MODEL Sensitivity Analysis is regarded with the manner in which those results of solutions change in response to change in model parameters.
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After going through this section, you must be capable to: Know the need for establishing sound credit policy; Identify the different credit policy variables; Know the cred
Examples
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a certain company makes 3 products A,B and C and they use the same raw material zhong.details about each product is as follows.production units are 10 000 for A,8 000 for B,12 000
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Explain standard costing according to backer and Jacobsen According to backer and Jacobsen, standard cost is the amount the firm to measure the variation from standard costs th
Explain about Office and administrative expenses These expenses are not related to factory but they pertain to the management and administration of the business. Such expenses
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