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QUESTIONS ON KAIZEN COSTING

1) Briefly explained the importance of Demming Cycle in
kaizen costing.
(3 marks)
Demming cycle is importance because as we know,
Demming Cycle is a never-ending process. That’s mean it represent
the best, easiest, and safest way to do the job and not to mention it provide
a way to measure the performance of the company. Next, it
provides a means for preventing recurrence of errors and minimizing variability.
Moreover, it shows the relationship between cause and effect which make its
easier to determine what kind of problem the company is facing.
2) Standardization is one of the three pillars that support
the kaizen costing. Discuss the steps in the Demming
Cycle in the process of standardization.
(12 marks)
Demming cycle is the never-ending process. It consists of
four parts, which is plan, do, check and act. Firstly, plan is the
problem finding. The company must find out what type of
problems that they are facing. Sometimes the problems that
they’re facing are implied. For example, there is a problem with
the machines. The worker stated that the machine is broken
while the fact that the worker itself doesn’t know how to operate
the machine. In this case, if the company does not investigate
first, the company will spend unnecessary money on buying new
machine while the real problem is that the worker lack of skills.
Therefore, it is crucial to investigate the problem first.
Next is do which is display a solution to the problem that
the company is facing. Different people will come out with
different kind of solutions. Therefore, it is best to do some
experiment or conduct a try and error research to find out which
type of solution is acceptable. They can also build prototype
solution in solving the problem. For example, the problem that
the company is facing is related to the needs of expertise.
Therefore, the company can conduct an exam or some practical
training before accepting them as full employee.
The third step is check. When the company had found the
right solution to their problems, they have to check whether the
solution that they pick is the right one in terms of cost, time &
energy. For example, the company decided that the best solution

is to provide some practical training before accepting them as new full employee. they can save the cost and use that cost to other function. By doing this way. . By doing this. If the solution that they find is adequate. Last step is act. the company can determine whether the workers have the reasonable skill and knowledge on handling machine. which is acknowledging the solution to the problem. they can implement the solution to avoid the problems from reoccurring in the future. which is not the real problem that they are facing. they can improve their performance and save cost because rather than buying a new machine.