group report

1. CONVERSION
CYCLE
Group 4:
Manguin
Nocillado
Puyo
Sagun
Sambat
Samiling

2. CONVERSION CYCLE
consists of two subsystems:
• Production System
• Cost Accounting System

3. THE TRADITIONAL MANUFACTURING
ENVIRONMENT

4. PRODUCTION METHODS
• Continuous Processing
• Make-to-Order Processing
• Batch Processing

5. DOCUMENTS IN THE BATCH PROCESSING
SYSTEM
• Production Schedule
• Bill of Materials (BOM)
• Route Sheet
• Work Order
• Move Ticket
• Materials Requisition

6. Production Schedule

7. Bill of Materials (BOM)

8. Route Sheet

9. Work Order

10. Move Ticket

11. Materials Requisition

12. QUESTION No. 1
It records the work done in each work center.
a. Move Ticket
b. Work Order
c. Route Sheet
d. Bill of Materials

13. QUESTION No. 2
The storekeeper releases raw materials based on the
a. Move Ticket
b. Production Schedule
c. Materials Requisition
d. Bill of Materials

14. QUESTION No. 3
It is the formal plan and authorization to begin production.
a. Move Ticket
b. Production Schedule
c. Materials Requisition
d. Bill of Materials

15. BATCH PRODUCTION ACTIVITIES
1. Production Planning and Control
a. Materials and Operations Requirement
b. Product Scheduling
2. Work Centers and Storekeeping
3. Inventory Control
Objective: "Minimize total inventory cost while ensuring that adequate
inventory exist of production demand."
-How much inventory should be purchased?
Economic Order Quantity= square root of (2DS/H)
-When should inventory purchased?
ReOrder Point= Ixd+S

16. Production Planning
and Control
R1: Uncalculated
production(surplu
s)
C1: PPC
authorizes
production
activity via formal
work order
R2: Production
without formal
documents
C2: PPC separated
from work centers.
Actual productions
are initiated upon
receipt of control
documents by work
centers

17. Work Centers and
Storekeeping
R3: Improper
allocation of labor
C3: Use of time
cards and job
tickets, together
with supervision of
managers
R4: Issuance of
excess materials
C4: Before actual
production takes
place, obtaining RM
from storekeeping in
exchange of Material
Requisition is needed.

18. Inventory Control
R5: Validity of RM
and FG Inventory
records
C5: Periodically
updating of inventory
records; periodically
verification through
physical count by
auditors
R6: Collusion
between
employees from
record keeping to
asset inventory
C6: Inventory Control
maintains RM and FG
inventory, separated
from Materials
Storeroom and FG
warehouse

19. Question No. 1
Inventory control performs all of the following tasks
except it
a. provides production planning and control with the inventory
status report of finished goods
b. updates the raw material inventory records
c. prepares a materials requisition for each production batch
d. records the completed production as an increase to finished
goods inventory

20. Question No. 2
Which of the following is not an assumption of the
Economic Order Quantity model?
a. demand for the product is known with certainty
b. total cost per year of placing orders is fixed
c. lead time is known and is constant
d. there are no quantity discounts

21. Question No. 3
What is the economic order quantity if the annual
demand is 60,000 units, set up cost of placing each order
is $900 and the holding cost per unit per year is $1200?
a. 300
b. 200
c. 100
d. 450

22. CONTROLS IN TRADITIONAL
ENVIRONMENT
• TRANSACTION AUTHORIZATION
• Work order, move ticket, materials requisition
• SEGREGATION OF DUTIES
• IC separate from RM & FG inventory custody
• SUPERVISION
• ACCESS CONTROLS
• ACCOUNTING RECORDS
• Cost sheets, job tickets, WIP records, FG inventory file
• INDIVIDUAL VERIFICATION
• Cost accounting function reconciles all cost of production

23. WORLD-CLASS COMPANY
✓Maintain strategic agility
✓Motivate and treat employees like
appreciating assets
✓Meet the needs of its customer
✓Philosophy of customer satisfaction
✓Philosophy of lean manufacturing

24. LEAN MANUFACTURING
PRINCIPLES:
❖PULL PROCESSING-pulling products from consumer end
❖PERFECT QUALITY-to meet consumers’ demand
❖WASTE MINIMIZATION-eliminate non-value activities
❖INVENTORY REDUCTION-reduce inventory costs
❖PRODUCTION FLEXIBILITY-to produce diversity of products
❖ESTABLISHED SUPPLIER RELATIONS-reliable vendors
❖TEAM ATTITUDE-attitude as a whole of all employees

25. Question No. 1
Production in lean manufacturing is initiated by:
a. Push
b. Pull

26. Question No. 2
Goal of lean manufacturing:
a. Minimize control
b. Improved efficiency and effectiveness
c. Lessen production

27. Question No. 3
PPC authorizes production activity via formal:
a. BOM
b. Work Order
c. Production Schedule

28. TECHNIQUES & TECHNOLOGY THAT
PROMOTES LEAN MANUFACTURING
• PHYSICAL REORGANIZATION OF THE PRODUCTION
FACILITIES
Reorganizing and/or restructuring of the Manufacturing process in
order to improve its effectiveness and efficiency.
• AUTOMATION OF THE MANUFACTURING PROCESS
The replacement of human labour with autonomous or semi-
autonomous machinery.

30. AUTOMATION OF THE MANUFACTURING PROCESS
(The replacement of labour with machinery.)
• Automation in Traditional Manufacturing - Consists of different kinds of
machines, each controlled by a single operator. Requires a great deal of setup time whose costs are
absorbed by massive production runs.
• Islands of Technology -Stand alone machines that are Computer Numerical
Controlled, which can perform multiple operations with minimal human involvement
• Computer Integrated Manufacturing -A completely automated
environment that aims to eliminate unnecessary processes in production.
• Automated Storage and Retrieval Systems (AS/RS) -Are
computer-controlled conveyor systems that carry raw materials and products across different
production departments. Replaced traditional Forklifts and their human operators. This helps
improve inventory control, and reduce errors and storage costs.

31. Robotics -Manufacturing robots are useful for performing hazardous production tasks,
and are programmed to perform specific actions over and over with a high degree of precision.
Computer-Aided Design (CAD) -Is used by engineers to design product
faster. It increases their productivity by improving accuracy, automating repetitive tasks, and allowing
firms to adjust their production quickly to be more responsive to market demands.
Computer-Aided Manufacturing (CAM) -Uses computers to assist in
the manufacturing process. It utilises the CAD data and converts it into a series of processes in the
manufacturing process. Utilisation of this technology improves process productivity, cost and time
estimates, process monitoring and quality, decreased setup times and labour costs.
Value Stream Mapping -Is a very detailed graphical representation of a
company's business processes. It helps to thoroughly identify the aspects of it that are wasteful and
unessential, and therefore enabling them to be removed.

33. Question No. 1
Consists of different kinds of machines, each
controlled by a single operator?
a. Automated Storage and Retrieval Systems
b. Robotics
c. Automation in Traditional Manufacturing
d. Cells

34. Question No. 2
Are useful for performing hazardous production tasks,
and are programmed to perform specific actions over
and over with a high degree of precision.
a. Automaton Assisted Manufacturing
b. Automated Storage and Retrieval Systems
c. Robotics
d. A and C

35. Question No. 3
Stand alone machines that are Computer Numerical
Controlled, which can perform multiple operations with
minimal human involvement
a. Computer-Aided Manufacturing (CAM)
b. Automated Manufacturing
c. Islands of Technology
d. Stand-alone systems

36. ACCOUNTING IN A LEAN
MANUFACTURING
Require new accounting methods and new information that:
• Shows what matters to its customers
• Identifies profitable products
• Identifies profitable customers
• Identifies opportunities
• Encourages the adoption of value-added activities
and processes
• Efficiently supports multiple users

37. WHAT’S WRONG WITH TRADITIONAL
ACCOUNTING INFORMATION?
• Inaccurate Cost Allocations
• Promotes Nonlean Behavior
• Time Lag
• Financial Orientation
Activity-Based Costing (ABC)
❖ Activities - worked performed in a firm
❖ Cost Objects - reason for performing activities

38. Advantages of ABC
• More accurate costing
• Identify most & least profitable
• Accurately tracking costs
• Equipping managers with cost intelligence
• Facilitating better marketing mix
• Identifying waste and non-value-added activities
Disadvantages of ABC
❖ Time-consuming and complicated
Value Stream Accounting

39. Question No. 1
What’s wrong with traditional accounting
information?
a. Accurate Cost Allocations
b. Promotes Lean Behavior
c. Timeliness
d. Financial Orientation

40. Question No. 2
All are advantages of ABC, except:
a. Identifying waste and non-value-added activities
b. Time-consuming and complicated
c. Facilitating better marketing mix
d. Equipping managers with cost intelligence

41. Question No. 3
Require new accounting methods and new information
that:
a. Identifies profitable products
b. Identifies profitable customers
c. Encourages the adoption of value-added activities
and processes
d. Efficiently supports individual users

42. INFORMATION SYSTEM THAT SUPPORTS
LEAN MANUFACTURING
A. Materials Requirements Planning (MRP)
● automated production planning and control system
used to support inventory management.
● Objectives: RM adequacy, inventory and schedules mgt.
● Answers: 1. What is needed? (RM)
2. How much is needed? (QTY)
3. When is it needed? (SCHEDULE)

43. INFORMATION SYSTEM THAT SUPPORTS
LEAN MANUFACTURING
B. Manufacturing Resource Planning (MRP II)
● integrates product manufacturing & engineering,
sales order processing, customer billing, human
resources, and related accounting functions.
● Includes labor hours, material costs and other
resources related to production.

45. INFORMATION SYSTEM THAT SUPPORTS
LEAN MANUFACTURING
C. Enterprise Resource Planning (ERP) Systems
● Large suites of integrated function-specific modules;
capable of EDI with suppliers and customers.
● Improve customer service, reduce production time,
increase productivity, and improve decision making.
● Main objective is cost reduction in complex and big
companies.
● SAP, ORACLE, People Soft, Baan, JD Edwards.

46. Question No. 1
MRP stands for
a. Materials Requirement Planning
b. Manufacturing Resources Planning
c. Manufacturing Resources Production
d. None of the Above

47. Question No. 2
ERP Systems:
a. Improve customer service & reduce production time
b. Increase productivity & improve decision-making
c. A & B
d. None of the Above

48. Question No. 3
Which Statement is TRUE?
a. ERP evolved directly from MRP
b. MRP and MRP II evolved from ERP
c. MRP II evolved from MRP and MRP II evolved into
ERP.
d. None of the Above

49. Emergency Question No. 1
Automation of the manufacturing process is ?
a. Computer-Aided Manufacturing (CAM)
b. A completely automated environment that aims to
eliminate unnecessary processes in production.
c. Reorganizing and/or restructuring of the
Manufacturing process in order to improve its
effectiveness and efficiency.
d. The replacement of human labour with
autonomous or semi-autonomous machinery.

50. Emergency Question No. 2
All of the following are characteristics of batch processing
except
a. each item in the batch is similar
b. batches are produced in accordance with detailed
customer specifications
c. batches are produced to replenish depleted inventory
levels
d. setting up and retooling is required for different
batches

51. Emergency Question No. 3
Which is not a principle of lean manufacturing:
a. Team attitude
b. Perfect quality
c. Inventory maintenance

52. Emergency Question No. 4
If the daily demand is 60 units and the lead time is 12
days, the reorder point is
a. 720 units
b. 270units
c. 072 units
d. none of the above