Lecture-19

Decision-Making
• Characteristics
• Types of Decision
• Procedure of Decision-Making
 Characteristics
• Course of action from alternative actions
• Application of human intellect
• Based on reasoning
• Situation specific
• Involves time
• Always purposeful
• Involves defining problem, analysing
alternatives & selecting the best alternative.
 Types of Decision
• Tactical & routine
• Policy & Operating
• Organizational & Personal
• Programmed & Non-programmed
• Individual & Group
 Procedure of Decision-Making
• Definition of the problem
• Analysis of the problem
• Data collection
• Development of alternatives
• Review of key factors
• Selection of best alternative
• Implementation of decision
• Follow-up action
Lecture-20
 Expected Costs
• Costing is the process of classifying, recovering
and appropriately allocating expenditure for
determination of cost of the product or
services.
 Objectives of cost accounting
• Determination of actual cost of the product
• Provide basis for pricing of product
• Control of cost
• Guide for making operating/ business
decisions
 Functions of cost estimation
• Project costing & feasibility analysis
• Cost of product or service
• Product design
• Production cycle
• Overhead expenses
• Make or buy decision
• Standard for comparison
 Cost Estimation Procedure
• Bills of materials
• Make or but decision
• List of tools, equipment, jigs and fixtures
• Process Sheet
• Processing data
• Machining time
• Machining allowance
• Material cost
 Cost Estimation Procedure
• Labour cost
• Prime cost
• Overheads charges
• Total cost
• Sale price
• Market Price
• Management approval
 Elements of Cost
• Material Cost
• Labour Cost
• Prime Cost
• Overheads (Indirect Costs)
i) Factory overheads
ii) Administrative overheads
iii) Sales overheads
• Total Cost
• Market Price
Cost Ladder
Cost Sheet
Lecture-21
 Production Planning and Control
• Production Planning and control consists of
two different and distinct functions:
• 1. Production Planning
• 2. Production Control
 Production Planning
• It involves the following:
• Forecasting
• Planning
• Organizing
• Directing
• Co-ordination
• Controlling
Advantages of Effective PP&Control
Effective Production Planning & Control can
result in the following:
• Plant Capacity
• Regular Production
• Estimation of Resources
• Inventory Control
• Coordination
• Minimum Wastage
Advantages of Effective PP&Control
• Labour Productivity
• Delivery Schrdules
• Work Environment
• Quality Improvement
 Functions of Prod Plan & Control
• Planning
• Routing
• Loading
• Scheduling
• Dispatching
• Progressing or Follow-up
• Inspection
 Quality Control
• Means degree of excellence
• The Quality of a product depends on
• 1 customer satisfaction
• 2 Consistent with market need, price, profit &
cost.
• 3 Production system
• 4 Designing the system of inspection
• 5 manufacturing equipments, manufacturing
practices, attitudes and commitment of people
 Inspection
• Inspection is the art of comparing materials,
products or performance with established
standards. The defective items are separated
from non-defective ones and thus adequate
quality is ensured.
 Purpose of Inspection
• To ensure adequate quality of product
• To ensure and locate defects
• To reduce further defective work
• Safe operation of product
• Detect sources of weakness in finished
product
• To minimize customer complaints
 Types of Inspection
• Trial Run
• First Piece Inspection
• Working Inspection
• Sample Inspection
• Operation Inspection
• Final Inspection
• Pilot-piece Inspection
• Key-operation Inspection
• Functional Inspection
• Endurance Inspection
• Patrolling Inspection
• Centralized Inspection
• Combined Inspection
 Stages of Inspection
• Inspection of Incoming Materials
• Stage Inspection
• Final Inspection
Lecture-22
 Quality Control
• Means degree of excellence
• The Quality of a product depends on
• 1 customer satisfaction
• 2 Consistent with market need, price, profit &
cost.
• 3 Production system
• 4 Designing the system of inspection
• 5 manufacturing equipments, manufacturing
practices, attitudes and commitment of people
 Inspection
• Inspection is the art of comparing materials,
products or performance with established
standards. The defective items are separated
from non-defective ones and thus adequate
quality is ensured.
 Purpose of Inspection
• To ensure adequate quality of product
• To ensure and locate defects
• To reduce further defective work
• Safe operation of product
• Detect sources of weakness in finished
product
• To minimize customer complaints
 Types of Inspection
• Trial Run
• First Piece Inspection
• Working Inspection
• Sample Inspection
• Operation Inspection
• Final Inspection
• Pilot-piece Inspection
• Key-operation Inspection
• Functional Inspection
• Endurance Inspection
• Patrolling Inspection
• Centralized Inspection
• Combined Inspection
 Stages of Inspection
• Inspection of Incoming Materials
• Stage Inspection
• Final Inspection
 Total Quality Management
• TQM can be defined as a management
philosophy and company practices that aim to
use the human and natural resources of an
organization in the most effective way to
achieve the objectives of the organization.
 Concept of TQM
• TQM can be conceptualized into the following
three process
• 1 Quality Process
• 2 Management Process for Continuous
Improvement
• 3 People Process
 Advantages of TQM
• Increased efficiency in processes
• More time for innovation and creativity
• Higher morale of employees
• Improvement in the quality of products &
services
• Increased customer satisfaction
• Larger market share
• Higher productivity
• Higher profits
 Marketing
• Marketing comprises of the following activities:
• Research
• Planning
• Branding
• Pricing
• Distribution
• Selling
• Packaging
 Marketing Activities
• Merchandising
• Warehousing
• After-sales service
• Sales promotion
• Advertising
• Credit control
Lecture-23
 Industrial Relations
• Agitation
• Strikes
• Lockout
• Picketing
• Gherao
 Settlement of Industrial Disputes
• Industrial Dispute Act, 1947
 Sales Promotion
• Customers Needs
• Unique Selling Proposition
• Selling Philosophy
• Handling Competition
• Good Salesman
 Material Purchase
• Purchasing is responsible for getting the right
material, from right place, in right quantity, at
right time and at right price.
 Purchase Process
• Receipt and analysis of requirements from different
departments and processing the requirements.
• Selection and location of potential suppliers
• Request, receipt and analysis of quotations
• Placing of orders
• Expediting and following of purchase orders
• Verification of vendor’s invoice for payments after
processing discrepancies and rejection
• Closing of completed orders & maintenance of records
 Methods of Purchasing
• Purchasing according to requirements- hand
to mouth purchasing
• Purchasing for some specific future period
• Market purchasing
• Rate contract purchasing
• Central purchase organization
 Purchase Documents
• Purchase Requisition
• Performa for Quotation
• Comparative Statement
• Purchase Order
Lecture-25
 Preparation of Financial Reports
• Trading Account
• Profit & Loss Account
• Balance Sheet
 Accounts and Stores
• Audit of Accounts
• 1. Scope of Audit
• 2. Objectives of Audit

• Stock-Taking of Stores