Advance Cost and Management Accounting

Muhammad Bilal Ashraf

(L5F15MCOM0007)

Assignment # 04

Submitted To: Prof. Shumaila Maqbool

Punjab College of Commerce (Shahdara campus)

Warriors - [2017]
2017-01-19
 Table of Contents
What is Balanced Scored?

Define Time, Quality and Theory of constraints?

What Is Inventory Management?

What Is Balanced Scored?

A balanced scorecard is a performance metric used in strategic management to

identify and improve various internal functions of a business and their resulting
external outcomes. It is used to measure and provide feedback to organizations.
Data collection is crucial to providing quantitative results, as the information
gathered is interpreted by managers and executives, and used to make better
decisions for the organization.

BREAKING DOWN 'Balanced Scorecard'

The balanced scorecard was first introduced by accounting academic Dr. Robert
Kaplan and business executive and theorist Dr. David Norton. It was first
published in 1992 in a Harvard Business Review article. Dr. Kaplan and Dr.
Norton took previous metric performance measures and adapted them to include
nonfinancial information.
Define Time, Quality and Theory of Constraints?

Time:
 The measured or measurable period during which an action, process, or
condition exists or continues.
 A no spatial continuum that is measured in terms of events which succeed
one another from past through present to future.

Quality:
In business, engineering and manufacturing, quality has a pragmatic interpretation
as the non-inferiority or superiority of something; it is also defined as fitness for
purpose. Quality is a perceptual, conditional, and somewhat subjective attribute
and may be understood differently by different people. Consumers may focus on
the specification quality of a product/service, or how it compares to competitors in
the marketplace. Producers might measure the conformance quality, or degree to
which the product/service was produced correctly.

There are five aspects of quality in a business context:

 Producing – providing something.

 Checking – confirming that something has been done correctly.
 Quality Control – controlling a process to ensure that the outcomes are
predictable.
 Quality Management – directing an organization so that it optimizes its
performance through analysis and improvement.
 Quality Assurance – obtaining confidence that a product or service will be
satisfactory. (Normally performed by a purchaser).

Theory of Constraints:

The theory of constraints (TOC) is a management paradigm that views any

manageable system as being limited in achieving more of its goals by a very small
number of constraints. There is always at least one constraint, and TOC uses a
focusing process to identify the constraint and restructure the rest of the
organization around it. TOC adopts the common idiom "a chain is no stronger than
its weakest link." This means that processes, organizations, etc., are vulnerable
because the weakest person or part can always damage or break them or at least
adversely affect the outcome.

Inventory Management:
Inventory management is the practice overseeing and controlling of the ordering,
storage and use of components that a company uses in the production of the items
it sells. Inventory management is also the practice of overseeing and controlling of
quantities of finished products for sale. A business's inventory is one of its major
assets and represents an investment that is tied up until the item sells.

BREAKING DOWN 'Inventory Management'

Businesses incur costs to store, track and insure inventory. Inventories that are
mismanaged can create significant financial problems for a business, whether the
mismanagement results in an inventory glut or an inventory shortage.

Successful inventory management involves creating a purchasing plan to ensure

that items are available when they are needed — but that neither too much nor too
little is purchased — and keeping track of existing inventory and its use. Two
common inventory-management strategies are the just-in-time (JIT) method, where
companies plan to receive items as they are needed rather than maintaining high
inventory levels, and materials requirement planning (MRP), which schedules
material deliveries based on sales forecasts.