TAILIEUCHUNG - Cost Accounting Traditions And Innovations - Chapter 16

CHAPTER 16 Innovative Inventory and Production Management Techniques After completing this chapter, you should be able to answer the following questions: What are the most important relationships in the value chain, and how can these relationships be managed to benefit the company? Why are inventory management and inventory costs so significant to the firm? | CHAPTER Innovative Inventory and Production Management Techniques 6 LEARNING OBJECTIVES Ater completing this chapter you should be able to answer the following questions 0 What are the most important relationships in the value chain and how can these relationships be managed to benefit the company 0 Why are inventory management and inventory costs so significant to the firm 0 How do push and pull systems of production control work s How do product life cycles affect product costing and profitability 5 How does target costing influence production cost management 0 What is the just-in-time philosophy and how does it affect production and accounting 0 What are flexible manufacturing systems and how do they relate to computer-integrated manufacturing 0 How can the theory of constraints help in determining production flow 0 Appendix How are economic order quantity reorder point and safety stock determined and used INTRODUCING Alexander Doll Co. In the three-quarters of a century since Madame Beatrice Alexander founded the Alexander Doll Co. in 1923 little girls have been unwrapping Madame Alexander dolls at Christmastime. These charming collectibles with hand-painted faces and decorative costumes are modeled either after the fictional Cinderella or the real Elizabeth Taylor and cost from 40 to 600. During the 1950s through the 1980s the Alexander Doll Co. prospered under the direction of its founder but under new management in 1995 the company was struggling so much financially that it filed bankruptcy. However the company was purchased by the Kaizen Breakthrough Partnership . KBP an investment partnership formed by Gefinor Group an international merchant bank in partnership with TBM Consulting Group Inc. which specializes in helping clients implement kaizen. KBP saw an opportunity to use the kaizen process to turn Alexander Doll Co. around. Beginning with the company s small production line for dolls TBM set up a cross-functional team of 10 http

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