Production Planning and Inventory Control – Example

Production planning involves a decision of ‘quantity to be produced in future’ with efficient use of resources. It is an integrated plan across various functions of the organization. The following aspects are factored in the production planning process. a) Customer orders b) Production capacity / constraints c) Material requirement (including inventory levels, procurement plan and […]

Work Study – Steps involved in time study technique

In our previous post work study, we have discussed basic concept of “Work Study” in brief. Today, we will discuss steps involved under one of the two techniques (Time Study) under ‘work measurement’.   Steps involved in time study 1) Breaking the activity / task into smaller elements (sub-units). 2) Recording time taken to complete […]

Work Study

Work study is a combination of two techniques Method Study and Work Measurement. While Method Study is an examination of the methods used in carrying out an activity, Work Measurement involves a Time and Motion Study of the worker who performs the activities. The objective of Work Study is to standardize the activities performed and […]

Cost Control and Reduction

One of the primary functions of cost accountancy is control and reduction of cost. While cost control deals with not allowing the cost to rise beyond the planned levels, cost reduction involves a real and permanent reduction in unit cost of production rendered without impairing their suitability for the use intended. Cost control ends when […]

Value Analysis

By continuously improving the performance of a product / service, its value could be increased thereby leading to reduction of costs. This concept is the base for Value analysis. Value of a product is a relationship between functions it performs and its cost of manufacture. It could be mathematically be expressed as follows: VALUE = […]