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Ultimate Objective
1. Manufacturing costs: The unit cost of the product should be estimated carefully and every effort should be made to stick to the cost standards. For this purpose the efforts must be made to separate the costs into two direct costs and variable costs. Efforts should be made for the followings.
2. Product Quality: Generally the product quality standards are often established by the product specifications or by the consumers.The manufacturing organization should try to translate such quality prescriptions into some measurable objectives. It must be noted that the product feature comes in conflict with the manufacturing cost objective and the manufacturing time schedule. The safeguarding of the quality must not result in increase in manufacturing costs or delay in the production. A proper balance should be maintained among quality and costs as well as quality and time schedule.
3. Manufacturing Schedule: There are many forces which compel side tracking in the manufacturing activity. The time plan must not be set for the shipment alone it should be broken up into all the sub systems like operating cycle time inventory turnover rate, machine utilization rate direct and indirect man hours per unit, capacity utilization machine and labour idle time set up repair and maintenance time etc. Time schedule objective directly affects the cost quality and the goodwill of the business in terms of regularity of shipment.
Consider - a small manufacturing company which produces high quality furniture has provided the following data: 2
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