An Assignment On

Cost Accounting
(Management control system, Target pricing, Performance management,
Business Process Reengineering, Demand flow, Just in time, Six Sigma,
Theory of constrains)

Submitted to
Md. Monir Hossain
Sr. Lecturer
Department of Business Administration
Prime University

Submitted by
Name: Fahima Akter
ID: 183020101005
Batch: 49th
Department of Business Administration
Prime University
Course Title: Cost Accounting
Course Code: Act-232
Date of Submission: 14, July 2020

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1. Management control systems:
A management control system (MCS) is a system, which gathers and uses information to
evaluate the performance of different organizational resources like human, physical, financial
and also the organization as a whole in light of the organizational strategies pursued.
Management control system influences the behavior of organizational resources to implement
organizational strategies. Management control system might be formal or informal.
2. Target Pricing:
Target pricing is the process of estimating a competitive price in the marketplace and
applying a firm's standard profit margin to that price in order to arrive at the
maximum cost that a new product can have. A design team then tries to create a product
with the requisite features within the pre-set cost constraint. If the team cannot complete the
product within the cost constraint, the project is terminated. By taking this approach, a firm
can assure itself of earning a reasonable profit across its product line, without being
burdened by any low-profitability products. However, if the standard profit margin is set too
high, it may not be possible to develop very many products within the cost constraint .

3. Performance management:
Performance management (PM) is a process of ensuring that set of activities and outputs meets
an organization's goals in an effective and efficient manner. Performance management can focus
on the performance of an organization, a department, an employee, or the processes in place to
manage particular tasks.[1] Performance management standards are generally organized and
disseminated by senior leadership at an organization and by task owners, it can include
specifying tasks and outcomes of a job, providing timely feedback and coaching, comparing
employee's actual performance and behaviors with desired performance and behaviors,
instituting rewards, etc.

4. Business Process Re-Engineering:

Business process re-engineering (BPR) is a business management strategy, originally pioneered
in the early 1990s, focusing on the analysis and design of workflows and business
processes within an organization. BPR aimed to help organizations fundamentally rethink how
they do their work in order to improve customer service, cut operational costs, and become
world-class competitors.
BPR seeks to help companies radically restructure their organizations by focusing on the ground-
up design of their business processes. According to early BPR proponent Thomas H.
Davenport (1990), a business process is a set of logically related tasks performed to achieve a
defined business outcome. Re-engineering emphasized a holistic focus on business objectives
and how processes related to them, encouraging full-scale recreation of processes rather than
iterative optimization of sub-processes. Business process reengineering is also known as business
process redesign, business transformation, or business process change management.
5. Demand Flow:

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A two supplies delivery system that uses visual triggers to deliver the right supplies, to the right
place, at the right cost.

6. Just In Time:
The just-in-time (JIT) inventory system is a management strategy that aligns raw-material orders
from suppliers directly with production schedules. Companies employ this inventory strategy to
increase efficiency and decrease waste by receiving goods only as they need them for the
production process, which reduces inventory costs. This method requires producers to forecast
demand accurately.

The JIT inventory system contrasts with just-in-case strategies, wherein producers hold sufficient
inventories to have enough product to absorb maximum market demand.

7. Six Sigma:
Six Sigma (6σ) is a set of techniques and tools for process improvement. It was introduced by
American engineer Bill Smith while working at Motorola in 1986.Jack Welch made it central to
his business strategy at General Electric in 1995. A six sigma process is one in which 99.99966%
of all opportunities to produce some feature of a part are statistically expected to be free of
defects.
Six Sigma strategies seek to improve the quality of the output of a process by identifying and
removing the causes of defects and minimizing impact variability in manufacturing and business
processes. It uses a set of quality management methods, mainly empirical, statistical methods,
and creates a special infrastructure of people within the organization who are experts in these
methods. Each Six Sigma project carried out within an organization follows a defined sequence
of steps and has specific value targets, for example: reduce process cycle time, reduce pollution,
reduce costs, increase customer satisfaction, and increase profits.
8. Theory of constraints:
The theory of constraints (TOC) is a management paradigm that views any manageable system
as being limited in achieving more of its goals by a very small number of constraints. There is
always at least one constraint, and TOC uses a focusing process to identify the constraint and
restructure the rest of the organization around it. TOC adopts the common idiom "a chain is no
stronger than its weakest link". This means that processes, organizations, etc., are vulnerable
because the weakest person or part can always damage or break them or at least adversely affect
the outcome.

Thank You