ACIS 2116 Lecture Notes - Lecture 4: Quality Control, Relate, Overproduction

• School: Virginia Tech
• Department: Accounting and Information Systems
• Course: ACIS 2116
• Professor: Jason Sharp

Document Summary

Hierarchy of activities: activities can be grouped into a four-level hierarchy, unit-level activities, are performed each time a unit is produced. Abc: advantages & disadvantages: advantages, more accurate product costs compared to normal costing, better pricing decisions could lead to a competitive advantage, process improvement initiatives. Better understanding of cost structure: disadvantages, cost vs benefit considerations, more expensive compared to normal costing, lost of time, effort, resources, involved in identifying the activities, activity pools. Lean thinking is a management philosophy and strategy focused on creating value for the customer by eliminating waste. It is often called kaizen, meaning change for the better : eight wastes of traditional operations downtime , defects, overproduction, waiting, not utilizing people to their full potential, transportation. In a traditional manufacturing system, companies will typically have large inventories of raw materials and finished goods. The traditional system pushes products through production based on forecasted demand.