so as per the given definition & real world situation we know that behind a finished product a hugh amount of money, planning, market research,technical analysis,demand supply graph & lot of things needed.
by this we can say from tip to toe costing is involved with everything.
so lets break it.
suppose you are a person want to manufacture x product. now first what you will see
where to setup your business?
How much transportation cost need to continue your business?
How many machine need to conduct business?
How much it will take to manufacture the product?
How much labour will going to need ?
How much profit will be there? ETC.
All these things are actually determine by various decision making methods mentioned below:-
(change in C/change in S)*100
(iv) brake even point (where no profit no loss):-
(change in profit/change in S)*100
(b) Decisions taken for alternative choices by contribution per limiting factor -
© Pricing Decisions and Strategies through out the process -
The price at which we have to transfer our unfinished product to other product line for further process or selling to 3rd party or our sister concern.
- Advantages and limitation,
- platform for making Transfer Prices,
- Transfer Price in various situations,
- cause of Conflicts and resolve the Conflicts;
(f) Relevant Cost Analysis :
- Relevant and Irrelevant Costs with multiple factor -
- Sunk cost which is also known as Historical Cost,
- Committed Cost (which is also part of relevant cost)
- such kind of Situations where Fixed Costs become important to take into account for decision making and its related implications. as an example :-rent for cold storage
(g) Profitability Analysis -
Now for all this thing we actually need appropriate tools to determine all these factor. these tools are:-
optimal distribution of cost by mostly 3 method:-
METHODS OF SOLVING TRANSPORTATION PROBLEM:
Simulation is a table bassed modeling system and analysis tool widely used for the purpose of designing, analysing, planning, and control of manufacturing systems.
Network analysis gives us to calculate a systematic structural approach to the problem of managing a
project up to successful completion. Also, because of graphical representation, it can easily understandable
and it can also be used by those with a less technical background.
Learning Curve Theory is connected with the idea that when a new job, process or activity commences for the
first time it takes more time than future cause it is new process, employees are new to that skill & less production.but when it continue for sometimes then overall time taken became less like the following graph.
when there are more than 1 condition or limiting factor involving manufacturing, service, trading activity etc
Originally published at https://www.thecn24.com.