accounts receivable, inventory, and total quality management
DESCRIPTION
Accounts Receivable, Inventory, and Total Quality Management. JOIN KHALID AZIZ. ECONOMICS OF ICMAP, ICAP, MA-ECONOMICS, B.COM. FINANCIAL ACCOUNTING OF ICMAP STAGE 1,3,4 ICAP MODULE B, B.COM, BBA, MBA & PIPFA. COST ACCOUNTING OF ICMAP STAGE 2,3 ICAP MODULE D, BBA, MBA & PIPFA. CONTACT: - PowerPoint PPT PresentationTRANSCRIPT
Accounts Receivable, Inventory, Accounts Receivable, Inventory, and Total Quality Managementand Total Quality Management
JOIN KHALID AZIZJOIN KHALID AZIZ
ECONOMICS OF ICMAP, ICAP, MA-ECONOMICS, ECONOMICS OF ICMAP, ICAP, MA-ECONOMICS, B.COM.B.COM.
FINANCIAL ACCOUNTING OF ICMAP STAGE 1,3,4 FINANCIAL ACCOUNTING OF ICMAP STAGE 1,3,4 ICAP MODULE B, B.COM, BBA, MBA & PIPFA.ICAP MODULE B, B.COM, BBA, MBA & PIPFA.
COST ACCOUNTING OF ICMAP STAGE 2,3 ICAP COST ACCOUNTING OF ICMAP STAGE 2,3 ICAP MODULE D, BBA, MBA & PIPFA.MODULE D, BBA, MBA & PIPFA.
CONTACT:CONTACT:0322-33857520322-3385752R-1173,ALNOOR SOCIETY, BLOCK 19,F.B.AREA, R-1173,ALNOOR SOCIETY, BLOCK 19,F.B.AREA,
KARACHI, PAKISTAN.KARACHI, PAKISTAN.
Accounts Receivable Accounts Receivable ManagementManagement
Determinants of Accounts ReceivableDeterminants of Accounts Receivable Percent of Credit Sales to Total SalesPercent of Credit Sales to Total Sales Level of SalesLevel of Sales Terms of SaleTerms of Sale Quality of CustomerQuality of Customer Collection EffortsCollection Efforts
Accounts Receivable Accounts Receivable ManagementManagement
Terms of SaleTerms of Sale quoted as quoted as a/b net ca/b net c , which means , which means
“deduct “deduct a%a% if paid within if paid within b daysb days, , otherwise pay within otherwise pay within c daysc days.”.”
example: example: 3/30 net 603/30 net 60, means “deduct , means “deduct 3% if paid within 30 days, otherwise 3% if paid within 30 days, otherwise pay the entire amount within 60 days.”pay the entire amount within 60 days.”
Accounts Receivable Accounts Receivable ManagementManagement
Terms of SaleTerms of Sale annualized opportunity cost of annualized opportunity cost of
foregoing a discount:foregoing a discount:
x
Accounts Receivable Accounts Receivable ManagementManagement
Terms of SaleTerms of Sale annualized opportunity cost of annualized opportunity cost of
foregoing a discount:foregoing a discount:
a 360a 360
1 - a c - b1 - a c - b
Accounts Receivable Accounts Receivable ManagementManagement
x a 360a 360
1 - a c - b1 - a c - b
opportunity cost of forgoing opportunity cost of forgoing 3/30 net 603/30 net 60::
x
x
Accounts Receivable Accounts Receivable ManagementManagement
a 360a 360
1 - a c - b1 - a c - b
opportunity cost of forgoing opportunity cost of forgoing 3/30 net 603/30 net 60::
.03 360.03 360
1 - .03 60 - 301 - .03 60 - 30
= = 37.11%37.11%
Inventory ManagementInventory Management
Too much inventory is expensive and Too much inventory is expensive and wasteful.wasteful.
Not enough inventory can result in lost Not enough inventory can result in lost sales.sales.
Inventory ManagementInventory Management
Raw Materials InventoryRaw Materials Inventory - basic materials - basic materials to be used in the firm’s production to be used in the firm’s production operations.operations.
Work-in-Process InventoryWork-in-Process Inventory - partially - partially finished goods requiring additional work finished goods requiring additional work before becoming finished goods.before becoming finished goods.
Finished goods InventoryFinished goods Inventory - completed - completed products that are not yet sold.products that are not yet sold.
Stock of CashStock of Cash - inventory of cash to allow - inventory of cash to allow payment of bills.payment of bills.
JOIN KHALID AZIZJOIN KHALID AZIZ
ECONOMICS OF ICMAP, ICAP, MA-ECONOMICS, ECONOMICS OF ICMAP, ICAP, MA-ECONOMICS, B.COM.B.COM.
FINANCIAL ACCOUNTING OF ICMAP STAGE 1,3,4 FINANCIAL ACCOUNTING OF ICMAP STAGE 1,3,4 ICAP MODULE B, B.COM, BBA, MBA & PIPFA.ICAP MODULE B, B.COM, BBA, MBA & PIPFA.
COST ACCOUNTING OF ICMAP STAGE 2,3 ICAP COST ACCOUNTING OF ICMAP STAGE 2,3 ICAP MODULE D, BBA, MBA & PIPFA.MODULE D, BBA, MBA & PIPFA.
CONTACT:CONTACT:0322-33857520322-3385752R-1173,ALNOOR SOCIETY, BLOCK 19,F.B.AREA, R-1173,ALNOOR SOCIETY, BLOCK 19,F.B.AREA,
KARACHI, PAKISTAN.KARACHI, PAKISTAN.
Inventory ManagementInventory Management
Optimal inventory order size: the Optimal inventory order size: the Economic Economic Order Quantity (EOQ) modelOrder Quantity (EOQ) model::
Q* =
Inventory ManagementInventory Management
Optimal inventory order size: the Economic Optimal inventory order size: the Economic Order Quantity (EOQ) model:Order Quantity (EOQ) model:
2SO2SO
CC
2SO2SO
CC
Inventory ManagementInventory Management
Q =Q = inventory order size in units inventory order size in units
C =C = cost of carrying 1 unit in inventory cost of carrying 1 unit in inventory
S =S = total demand in units over planning total demand in units over planning
periodperiod
O =O = ordering cost per order ordering cost per order
Q* =
Example: Inventory Example: Inventory ManagementManagement
Q =Q = inventory order size in units inventory order size in units
C =C = cost of carrying 1 unit in inventory cost of carrying 1 unit in inventory = 1.25= 1.25
S =S = total demand in units over planning total demand in units over planning
period = period = 10,000 units10,000 units
O =O = ordering cost per order = ordering cost per order = $250$250
2SO2SO
CCQ* =
Example: Inventory Example: Inventory ManagementManagement
2SO2SO
CC
Q* =
Example: Inventory Example: Inventory ManagementManagement
2SO2SO
CC
22xx250250xx10,00010,000
1.25 1.25
Q* =
Q* =
Example: Inventory Example: Inventory ManagementManagement
2SO2SO
CC
22xx250250xx10,00010,000
1.25 1.25
= = 2,000 units2,000 units
Q* =
Q* =
Order Point ProblemOrder Point Problem
AverageAverage EOQ EOQ
inventoryinventory 2 2= + safety stock= + safety stock
Total Quality ManagementTotal Quality Management: a : a company-wide systems approach to company-wide systems approach to quality. quality.
An effort to increase quality through An effort to increase quality through better supplier relations.better supplier relations.
Interdependence between supplier Interdependence between supplier and customer allows for development and customer allows for development of new, better products.of new, better products.
TQMTQM
ATTENTION COMMERCE ATTENTION COMMERCE STUDENTSSTUDENTS
ACCOUNTING(FINANCIAL & COST) OFACCOUNTING(FINANCIAL & COST) OFICMAP STAGE 1,2,3,4 ICMAP STAGE 1,2,3,4 CA..MODULE B,C,DCA..MODULE B,C,DPIPFA (FOUNDATION,INTERMEDIATE,FINAL)PIPFA (FOUNDATION,INTERMEDIATE,FINAL)ACCA-F1,F2,F3ACCA-F1,F2,F3BBA,MBABBA,MBAB.COM(FRESH),M.COMB.COM(FRESH),M.COMMA-ECONOMICS..O/A LEVELSMA-ECONOMICS..O/A LEVELSKHALID AZIZ…..0322-3385752..kARACHIKHALID AZIZ…..0322-3385752..kARACHIJOIN GROUPJOIN GROUP
http://finance.groups.yahoo.com/group/cost-accountantshttp://finance.groups.yahoo.com/group/cost-accountants