Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 33

Productivity: Which Way to Lean? Lean manufacturing is what a lot of manufacturing firms are after these days. This means a renewed focus on productivity and profitability, particularly for firms that compete on a cost leadership strategy and are facing increased global low-cost competition. Adopting the right accounting approach to facilitate improvements in productivity is critical for these companies. Companies like Whirlpool, Pratt-Whitney (a unit of United Technologies), General Electric, and many other manufacturers are adopting the methods of lean manufacturing.

Required

1. How can productivity measures described in this chapter help a company to achieve lean manufacturing?

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2. The founding principles of lean manufacturing are based in part on the Toyota Production System. Explain the Toyota Production System and list its four main elements.

Step 1 of 4

Flexible budget: