Definition: We can refer to Management Accounting as an accounting system that provides information to perform management functions directed toward achieving organizational objectives. If we emphasize the keyword, it is explanatory to denote the managerial aspect of accounting. Besides, it has a differentiated lookout directed towards decision-making and control. It … [Read more...] about Management Accounting and its Functions
Master Production Schedule
Definition: The Master Production Schedule (MPS) is the master level product-wise schedule made for the individual end-products or sub-parts of the products in order to get detailed information about the overall manufacturing. Moreover, we can also understand it as the Disaggregation of the Aggregate plan. As it creates separate schedules for every single item of the … [Read more...] about Master Production Schedule
Just-in-Time Manufacturing
Definition: Just-in-Time (JIT) Manufacturing is a philosophy that focuses on achieving Complete Waste Elimination, Inventory Reduction and Streamlined Processes in business operations. It is one of the successful tools for Production Planning and Control. Also, it inculcates the elements of Total Quality Management, Production Scheduling and Lean Management. However, … [Read more...] about Just-in-Time Manufacturing
Cash Budget
Definition: Cash Budget is a precise statement depicting anticipated projections about the cash receipts and payments for a specific time period. It is a type of functional budget that is useful for cash management in the organization. A cash budget is essential for companies and is referred to as the "Nervous System of Budgetary Control". Also, it is alternatively known as … [Read more...] about Cash Budget
Zero-based Budgeting
Definition: Zero-based Budgeting or ZBB is an analytical budgeting method where the preparation of a budget begins by assuming the base as Zero. In this, the overall process starts from scratch every time while preparing budgets. In 1962, Peter Phyer introduced this approach of ZBB. It turned out to be an excellent tool in the field of management. This approach uses … [Read more...] about Zero-based Budgeting
Budgetary Control
Definition: Budgetary Control is a system of control that focuses on cost management with the help of budgets for Departmental and Organizational levels. It begins with budget preparation as per employees' responsibilities, thereafter comparing the actual and planned outcomes and ends with variance analysis followed by a review. In brief, we can understand it as a road map … [Read more...] about Budgetary Control
Flexible Budget
Definition: Flexible budget is the one that changes with the level of Activity/Output rather than for any specified activity level. It includes the preparation of multiple budgets that depict budgeted costs for various activity levels. The flexible budget supersedes the limitations of a fixed budget. Because it is a practical approach that is suitable for dealing with … [Read more...] about Flexible Budget
Total Quality Management
Definition: Total Quality Management (TQM) is a modern production tool that is focused on providing premium consumer satisfaction through constant improvement in the organization's processes. In simple words, TQM is serving customers at their best by maintaining quality at each organizational level. The total in TQM refers to all the activities undertaken … [Read more...] about Total Quality Management
Total Productive Maintenance
Definition: Total Productive Maintenance (TPM) is a lean maintenance concept that maximizes effectiveness by continuous maintenance and improvements in the equipment. It is a combined effort made by the entire organization. TPM develop a maintenance-free framework by identifying the losses and eliminating them. It will lead to a considerable decrement in the maintenance … [Read more...] about Total Productive Maintenance
Maintenance Planning
Definition: Maintenance Planning is a controlling function that formulates strategies to keep the Capacities and Facilities as per intended working conditions up to their useful life. It helps Minimize Costs, achieves Higher Production Efficiency, and reduces Ideal Time. The manufacturing units produce final products using their resources and assets. These assets are the … [Read more...] about Maintenance Planning