Assume you are the management accountant for the Foleo Group. You have been called into a...

 

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Assume you are the management accountant for the Foleo Group. You have been called into a meeting with the Board of Directors to discuss the problems Foleo Retailing NZ is experiencing in meeting customer demand for the SliFone. You have been asked to undertake an analysis of the business processes involved in producing and despatching Foleo's phones to the NZ market, with the view to streamlining procedures. As a result of your initial investigations, you have itemised the below list of processes involved in supplying the NZ operation, along with the maximum capacity each process can deliver per month. Maximum Output of (b) Bottleneck Business Process Process per month Orders for phones processed by Sydney sales from NZ sales office 280 orders Purchasing raw materials and components for sales order 140 orders Inspecting raw materials and components for sales order 98 orders Production time 185 orders Quality assurance activities 200 orders Packaging phones 150 orders Moving orders to warehouse for despatch 95 orders Shipping orders to NZ sales depot 215 orders Distribution of orders to kiosks 250 orders (a) Explain the Theory of Constraints to the Board of Directors. According to this theory, what is the maximum number of SliFone orders that Foleo can deliver to the NZ kiosks per month? Why? (b) If the average demand for SliFones in the NZ market is 200 orders per month, then identify all the bottlenecks in this process that are impacting Foleo's ability to meet this demand. Indicate your answers in the last column of the table provided. (c) Based on the above analysis, make a recommendation to the Board on how business processes may be improved to meet Foleo Retailing NZ's required demand of 200 orders per month. Assume you are the management accountant for the Foleo Group. You have been called into a meeting with the Board of Directors to discuss the problems Foleo Retailing NZ is experiencing in meeting customer demand for the SliFone. You have been asked to undertake an analysis of the business processes involved in producing and despatching Foleo's phones to the NZ market, with the view to streamlining procedures. As a result of your initial investigations, you have itemised the below list of processes involved in supplying the NZ operation, along with the maximum capacity each process can deliver per month. Maximum Output of (b) Bottleneck Business Process Process per month Orders for phones processed by Sydney sales from NZ sales office 280 orders Purchasing raw materials and components for sales order 140 orders Inspecting raw materials and components for sales order 98 orders Production time 185 orders Quality assurance activities 200 orders Packaging phones 150 orders Moving orders to warehouse for despatch 95 orders Shipping orders to NZ sales depot 215 orders Distribution of orders to kiosks 250 orders (a) Explain the Theory of Constraints to the Board of Directors. According to this theory, what is the maximum number of SliFone orders that Foleo can deliver to the NZ kiosks per month? Why? (b) If the average demand for SliFones in the NZ market is 200 orders per month, then identify all the bottlenecks in this process that are impacting Foleo's ability to meet this demand. Indicate your answers in the last column of the table provided. (c) Based on the above analysis, make a recommendation to the Board on how business processes may be improved to meet Foleo Retailing NZ's required demand of 200 orders per month.

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a Theory of constraints In a process there could be one or more than one limiting factor which does ... View the full answer