Question Just-in-time
Following your preparation of the 5 year budget for Chumpy dog food (Question 4) you are concerned by the levels of inventory held by the company in Raw Materials and in Finished Goods. A long sales and production history for the Chumpy product is available (40 years) and sales and production levels have been very predictable.
Write a report to the Strategic Management Committee detailing the potential benefits of adopting a Just-In-Time (JIT) manufacturing system for Chumpy. Use the data provided on inventory levels in the question 4 and the long sales/production history to support your analysis.
In your report identify any potential business risks associated with adopting a JIT approach.
Rationale
This assignment directly addresses some of the key learning outcomes for ACC210 including that on successful completion of the subject students will:
• be able to demonstrate technical, computational, and analytical skills associated with the design and operation of product costing and accounting control systems;
• be able to discuss issues associated with contemporary performance measurement;
• be able to use computer spreadsheets as an aid to product costing, budgeting and performance evaluation; and
• be able to communicate effectively in designing reports for management.
The requirements of this assignment cover up to and including Topic 7 of the Subject Outline. The assignment is designed to develop your problem solving, spreadsheet (Excel) design, and written communication skills. The questions require you to apply the knowledge and tools covered in the subject topics in order to demonstrate your understanding of the subject content and also to illustrate your capacity for strategic thinking. The assignment will also test your ability to communicate and explain the impacts of your findings whether through quantitative or written reports.
The ability to communicate effectively has been identified by the accounting professional bodies as being critical to your future role as an accountant.