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Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
Edition 2ISBN: 978-1111824402 Exercise 40
Drum-Buffer-Rope
See Cornerstone Exercise 20.4. Fisher Company has three sequential processes: cutting, welding, and assembly. Assume that the optimal mix is Component A ¼ 0 units per week; and Component B ¼ 30 units per week. Demand is uniformly spread out over the five-day work week. Fisher requires a 2.5-day buffer.
Required:
1. Identify the drummer, the rate of production, the time buffer, and the rope.
2. Illustrate the DBR structure of Fisher Company.
3. What if the Welding Department was allowed or encouraged to produce at capacity? What effect will this have on work-in-process inventories?
See Cornerstone Exercise 20.4. Fisher Company has three sequential processes: cutting, welding, and assembly. Assume that the optimal mix is Component A ¼ 0 units per week; and Component B ¼ 30 units per week. Demand is uniformly spread out over the five-day work week. Fisher requires a 2.5-day buffer.
Required:
1. Identify the drummer, the rate of production, the time buffer, and the rope.
2. Illustrate the DBR structure of Fisher Company.
3. What if the Welding Department was allowed or encouraged to produce at capacity? What effect will this have on work-in-process inventories?
Explanation
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Identifying the drummer, the rate of pro...
Cornerstones of Cost Management 2nd Edition by Don Hansen ,Maryanne Mowen
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