BU467 Chapter Notes - Chapter 14: Lean Accounting, Accounting, Whole-Life Cost
Document Summary
Over the long run, firms seek ways to continuously improve; there are a variety of different methods to analyze and improve systems: Supply chain analysis: improving relationships with suppliers: supply chain: the flow of resources from the initial suppliers through the delivery of goods and services to customers and clients. Jit production: materials are purchased and units are produced at the time customers demand them: demand pull system, jit systems reduce costs by maximizing the use of space, lowering defect rates, and increasing manufacturing flexibility. Continuous cost improvement (for planning for long-term profitability) Determine the product target price, quality, and functionality. Determine the target cost (price required profit margin) Design product and production process to achieve the target cost. Lean accounting: a set of accounting principles and methods to support lean business practices and motivate continuous improvement. Value stream analysis: the process of analyzing business processes to identify the cost of individual value-added activities.
