Lamar Manufacturing produces radio alarm clocks. The company offers three clock models with various features. Each clock
Question:
Lamar Manufacturing produces radio alarm clocks. The company offers three clock models with various features. Each clock is assembled in a single plant that is laid out in a functional format. Each worker has been highly trained to perform a particular function in the manufacturing process.
In Department 1, circuit boards are combined with electrical components and attached to a "base." When a batch is completed, the base units are forwarded to Department 3, where they are shelved in work-in-process bins until needed.
In Department 2, speakers are attached to the radio cabinet, and buttons and knobs are attached. Each batch of cabinets is then forwarded to Department 3, where the units are also stored until needed in production.
Department 3 is the finishing department. In this area, the radio cabinets are attached to the base unit and the clock is packaged. The work-in-process area of Department 3 is always full. If a completed batch from an earlier department is found to be defective, Department 3 workers will automatically stop work on that particular model and work on another while the error is corrected.
Completed units are stored in the company's finished goods warehouse. On average, clocks are stored in the warehouse for 45 days before shipment.
\section*{Required}
A. Is the company operating a push or a pull system of inventory management? Explain vour answer.
B. What changes would be necessary to adapt the plant layout to a product-oriented facility? What benefits would the company realize from such changes?
C. Assume that the company implements total quality management by arranging the plant into a product-oriented facility and is successful in reducing work-in-process and finished goods inventories. What further actions should the company take to achieve total quality?
Step by Step Answer:
Managerial Accounting Information For Decisions
ISBN: 9780324222432
4th Edition
Authors: Thomas L. Albright , Robert W. Ingram, John S. Hill