Abnormal loss is the loss arising from a manufacturing or chemical process through abnormal waste, shrinkage, seepage, or spoilage in excess of the normal loss. It is usually valued on the same basis as the good output.
Cycle Time refers to the length of time required from the placing of an order by a customer to the delivery of the product or service. It is a crucial metric, particularly significant in companies employing just-in-time techniques.
Final Assembly involves the culmination of all manufacturing processes where individual components and sub-assemblies are put together to create a finished product. In an automobile final assembly plant, key elements such as the powertrain, chassis, and body components are united to form a completed automobile.
Finished goods are products that have completed the manufacturing process and are ready for distribution to customers.
Flexible manufacturing is a computer-controlled manufacturing process that provides adaptability and flexibility in altering machinery to accommodate various products, thereby allowing rapid production customization at competitive costs.
The common cost incurred in a production process that results in multiple products, typically allocated based on relative selling prices.
A strategic choice in business operations regarding whether to produce goods internally or to purchase them from external suppliers. It involves evaluating various factors including cost, capacity, quality, and opportunity costs.
The time taken to produce a specified quantity of products, from the start of production to the end of production, encompassing all phases including setup, actual production, and any necessary adjustments.
Normal loss refers to the predictable and usual loss of materials in a manufacturing or chemical process due to factors like waste, seepage, shrinkage, or spoilage. These losses are considered a standard part of the production process and are accounted for in manufacturing costs.
A strategic method for pricing products or services based on the price customers are willing to pay, ensuring both market competitiveness and profitability.
Value Added refers to the value of a product or output minus the costs of raw materials used in production. Essentially, it represents the increase in value created by the manufacturing process through the application of capital and labor.
