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

Exercise 28

Benefits and Challenges of Lean Much discussion at your organization recently has centered on the notion of lean. In preparation for an upcoming meeting of senior managers, across business functions, you have been asked to prepare an explanatory memo. Your memo should address, at a minimum, the following issues: (1) the definition of lean, (2) strategic value of adopting lean principles for your organization, (3) anticipated costs of moving to lean, (4) implications for cost-system design, and (5) sources for additional information regarding these issues.

Required Prepare, in good form, a memo for management that addresses the preceding issues. In responding to this assignment, please access and read the following Statement of Management Accounting: Accounting for the Lean Enterprise: Major Changes to the Accounting Paradigm. Montvale, NJ: Institute of Management Accountants, 2006. (Accessible on the Web at the following address: www.imanet.org/pub-lications_statements. asp#C.)

Step 1 of 2

Management and Control of Quality

Quality is explained as a term associated with customer satisfaction. It is the total level of satisfaction any customer gets from any organization’s products or service. There are two components of quality- Design Quality and Performance Quality. There are various approaches to setting quality related expectations and among those alternatives one is the Cost of Quality (COQ) Reporting. It provides relevant cost and revenue data used for decision-making purposes.