Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce Costs
and Enhance Efficiency
1
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Introduction to Management Accounting
Management accounting is the process of preparing management reports and accounts that provide
timely and accurate information (financial and statistical) which is required by the manager to make
short-term or day-to-day decisions. Management accounting generates periodical reports for the
company's internal audiences such as top-level managers and middle-level managers. Management
reports show the amount of sales revenue generated, available cash, trend charts, variance analysis
and other statistics (Kont, 2013).
Organizations operate in a very dynamic and in a competitive environment. So effective decision-
making is important for organizational success and survival. Therefore reports provided by the
management accountant to the managers will help them in making timely and appropriate decisions.
The present report emphasizes on nature and role of management accountants, users of the
management reports, the difference between financial accounting and management accounting and
the purpose of the costing techniques.
Classification of Cost
Cost classification is the process of grouping costs according to their nature and common
characteristics. This classification makes the information related to costs meaningful. Cost
classification is the first step towards the decision-making process relating to costs (Vanderbeck,
2012). Following are the important ways to classify costs:
1. Classification of the costs based on its element -
On the basis of the element, costs can be classified into material, labour and overhead.
Direct Material - Direct material includes raw materials which are used to manufacture the finished
product and it become an integral part of the product which can be allocated directly to a specific
unit.
Direct Labour - Direct labour means the cost incurred in relation to those employees who are
engaged in the manufacturing process (Zawawiand Hoque, 2010). These costs can be easily traced
to a specific unit.
Overhead - Overhead includes the cost of indirect material, indirect labour and other expenses which
cannot be allocated to a specific unit
2. Classification of the costs on the basis of its function -
On the basis of function, costs can be classified into production costs, administration costs, selling
costs and distribution costs.
Production costs - These costs are incurred in the course of manufacturing finished goods. It
includes the cost of raw materials, labour and other indirect factory costs. For example - power, rent,
depreciation etc (Lucey, 2002).
Administration costs - These costs include general administration costs incurred by the organization
for its smooth functioning such as audit fees, printing and stationary, Rent of office building etc.
Selling costs - These include all those costs which are incurred about selling goods and services
such as salesmen's salary, packing charges, advertisement, warehousing charges etc.
Distribution costs - It include costs incurred at the time of dispatching finished goods to consumers
such as agent's commission, carriage outward etc.
3. Classification of the costs based on its nature -
Based on nature, costs can be classified into direct costs and indirect costs.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
2
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
3
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
4
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
5
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
6
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
7
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
8
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
9
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
10
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
11
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
12
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
13
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
14
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
15
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
16
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
17
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
18
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
19
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
20
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
21
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
22
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
23
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
24
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
25
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
26
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
27
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
28
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
29
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
30
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
31
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
32
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
33
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
34
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
35
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
36
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
37
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
38
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
39
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
40
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
41
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
42
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
43
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
44
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
45
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
46
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
47
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
48
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
49
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
50
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
51
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
52
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
53
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
54
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
55
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
56
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
57
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
58
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
59
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
60
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
61
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
62
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
63
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
64
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
65
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
66
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
67
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
68
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
69
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
70
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
71
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
72
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
73
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
74
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
75
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
76
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
77
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
78
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
79
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
80
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
81
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
82
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
83
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
84
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
85
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
86
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
87
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
88
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
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Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Direct costs - All those costs which are directly attributable to a specific unit are called direct costs.
Indirect costs - All those costs which cannot be identified with a specific unit or individual cost centre
are called indirect costs (Fullerton, Kennedy and Widener, 2013).
4. Classification of the costs based on its behaviour -
Based on behaviour, costs can be classified into fixed costs, variable costs and semi-variable costs.
Fixed costs - These costs remain fixed irrespective of the change in volume of the finished product.
For example - rent, depreciation, salary etc (Kaplan and Atkinson, 2015).
Variable costs - These costs change in direct proportion to the volume of output such as raw
material, and labour.
90
Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Semi-variable costs - These costs remain fixed up to a certain level of output and vary if output
crosses that certain limit. For example - telephone bills (Hansen, Mowenand Guan, 2007).
Various performance indicators
There are several performance indicators that the senior authority of Jeffrey and Son can use to
analyze the actual performance of the business against the expected (Maher, Lanen and Rajan,
2006).
Annual report: Through the means of annual reports, management can easily evaluate and analyze
the financial statements of the business so that the actual position can be evaluated. Furthermore, in
case of decreasing business volume and profitability and increasing costs of sales, management can
undertake potential measures by employing suitable operational strategies.
Quality of products and services: By constantly monitoring the production process at each level will
assist in analyzing and evaluating the quality of products and services (Popeskoand Novak, 2008).
Further, through the help of this management can identify loopholes in operating performance due to
which the quality of product is hampered adversely.
Customer Satisfaction: Lastly, improvement in employee performance can be measured by
considering the feedback or reviews from the customers. Using this, the cited firm can bring further
improvements as per the requirement of the target audience to retain them for the long term.
Different ways to reduce costs, enhance value and quality
At present, there are several tools and techniques through the help of which Jeffery and Son can
easily attain the objective of reducing costs and enhancing value for the business:
Total quality management: With the help of this technique, management can ensure improvement in
the quality of operational activities conducted by the business. The main purpose of TQM is to
enhance the overall production process of Jeffrey and Son by resolving different loopholes
(Balakrishnan and Cheng, 2005).
JIT and EOQ: The main purpose of both these tools is to help the firm in minimizing its storage and
carrying costs of products and services. Employing JIT and EOQ will help in purchasing raw
materials as per the demand in the market so that wastage or dead stock can be reduced which
leads to a reduction in unwanted inventory of the business.
Management Audits: Utilizing this approach, Jeffery and Son can monitor the performance of the
workforce and ensure standard outcomes (Ruiz-de-Arbulo-Lopez, Fortuny-Santos and Cuatrecasas-
Arbós, 2013). Furthermore, frequent audits will help in motivating employees to enhance their
performance as per the standards set which directly leads to enhancement in the overall production
process.
Purpose and nature of the budgeting process
Purpose of budgeting:
Budgeting is a very important part of the organization's planning process. It is a basic need in the
budgeting process that managers or budget holders should be able to predict that whether the
organization will generate profits in future or not. The purpose of budgeting is to know the
performance of the business in financial terms if certain plans and strategies are carried out. It also
includes three aspects.
Forecasting of income and expenditure.
It is a decision-making tool (Blocher, Chen and Lin, 2008)
It is a tool to monitor the performance of the business.
With the help of this, the decision-making process for the managers becomes easy and they make
smart and effective judgments for the future functioning of the business. Along with this, it also helps
in making comparisons between actual and budgeted standards of performance.
Nature of budgeting:
In the budgetary statement of an organization, estimation is made with the help of actual values
generated through the previous accounting period. However, with this estimation managers of
Jeffery and Son's can compute the expected amount of cash from the sales and other primary
activities of the business. In doing so, managers have to consider three major aspects which are
material, labour and production expenditure. Further, the amount of expenditure is deducted from the
estimated profit to evaluate the deficit or surplus position of the business from operations (Shank and
Fisher, 2006). Lastly, the budget is reviewed by the senior authority of Jeffery and Son so that they
can make decisions regarding the practical applicability of business operations.
Selection of appropriate budgeting methods
There are various types of budgets prepared by the firm to adequately allocate financial resources
and make optimum utilisation to generate desired results and outcomes. Furthermore, as per the
needs and wants of the company, managers prepare budgets and herein, the following are the
budgeting techniques used by the financial manager of Jeffery and Son Ltd:
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Applying Just-in-Time (JIT) and Total Quality Management (TQM) Principles to Reduce
Costs and Enhance Efficiency
Operational budgeting: In this, managers of Jeffery and Son Ltd prepare budgets based on different
operations which consist of production, selling distribution etc (Ifandoudasand Gurd, 2010).
However, considering the flexibility of these budgets they can be prepared based on annual, monthly
or quarterly. Furthermore, through the means of these budgets strategies are employed by the firm
to carry out the operations.
Zero-based budgeting: Managers undertake this type of budgeting approach whenever they have a
base of the previous reporting period. However, this budget is prepared when there is a huge change
in the conditions of the target market or the company is developing a new product. Further, there are
no measures of forecasting in this budget which indeed leads to generating a high possibility of
variances (Berger, 2011).
Incremental budgeting: It is a budgeting technique which is based on slight changes from the
preceding period's estimated results or actual outcomes. However, it is considered as the traditional
means of budgeting because in this budgets are prepared by making use of information from the
previous reporting period.
Based on the above-identified different methods, the most appropriate and suitable technique of
preparing the budgets for Jeffrey and Son's smake is operational budgeting. The rationale behind
this is that it will help in preparing different budgets for different operations so that activities can be
carried out in effective manner (Zimmerman and Yahya-Zadeh, 2011).
Management report by the identified responsibility centres
On the basis of the above reconciliation statement, various departments of Jeffery and Son's Ltd
have to bring modifications in their approach so that variances can be avoided or prevented.
Selling department: In this department, the sales manager has to make smart and accurate
estimations of sales prices so as to avoid negative variance. In order to do so, the management of
Jeffery and Son's Ltd has to carry out market research so that they can identify the demand for
products as well as the spending power of the target audience so that sales prices can be set
accordingly (Lucey, 2002).
Production department: According to the current situation, wastage of raw materials during the
production process is one of the major concerns for the senior authority of Jeffery and Son's Ltd.
However, in order to reduce this concern, management has to indulge the latest technological
equipment or machinery so that the production process can be enhanced and optimum utilisation of
available resources can be made.
Human resource department: Considering the present position, labour variance is showing positive
results as compared to other departments. Therefore, Jeffery and Son's Ltd need to indulge in more
training and development sessions so that employees can be motivated to improve their skills and
abilities and carry out work in effective and efficient manner (Kont, 2013).
Conclusion
In summing up the above report it has been observed that management accounting plays a crucial
role in making smart and effective decisions regarding future contingency by our experts of best
assignment help services in the UK. However, it also helps in employing suitable tools and
techniques through the means by which management can identify the gap of loopholes within the
functioning and accordingly introduce potential measures to improve the situation. In addition to this,
the use of performance indicators overall performance of Jeffery and Son's Ltd has been identified
as how management has recommended suitable and reliable strategies to enhance the overall
functioning of the business and generate higher profits.
References
Drury, C., 2005.Management accounting for business. Cengage Learning EMEA.
Hansen, D., Mowen, M. and Guan, L., 2007. Cost management: accounting and control. Cengage
Learning.
Kaplan, R.S. and Atkinson, A.A., 2015.Advanced management accounting. PHI Learning.
Lucey, T., 2002. Costing. Continuum.
Maher, M., Lanen, W.N. and Rajan, M.V., 2006.Fundamentals of cost accounting. McGraw-Hill/Irwin.
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