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Unit 3: Production and Inventory Cycle - Coggle Diagram
Unit 3: Production and Inventory Cycle
1.Production planning and design (Input)
is the design of items to be manufactured, production planning and control
Documents
Customer Production Order, Inventory Production Order, Raw material issues slip, Customer Job card (“CJC”)/ Inventory Job card (“IJC”), Inventory movement sheet, Inventory master files ,Daily production report, ect.
Commence with due authorisation by the production planning department; CPO or IPO
customer job card (CJC), or
inventory job card (IJC)
• raw materials used;
• direct hours worked by production staff; and
• machine hours.
A daily production report of all jobs in process
3.Inventory management (output)
direct material costs of raw materials and consumables to work in progress;
direct payroll costs based on hours worked, allocated to the relevant job or production run
the transfer of accumulating costs between production stages or departments in work in progress; and
the transfer of the final cost of the finished goods manufactured to finished goods inventory
Overhead allocations or production run, based on labour hours or machine hours worked
Physical and monitoring controls
Perpetual inventory
Issue of goods at selling price
Gross profit analysis
Physical control
Monitoring of inventory levels
2.
Production processing
Preparation of pre-numbered raw materials issues slip (RMI) by production planning department
Issued material accounted for on the IJC
o Transfer of manufactured goods to finished goods
o Issue of raw materials to production process
o Movement of goods through production process and
All raw materials issued to production should be listed on the daily production report
Time spent on production, or in machine time, is captured onto the IJC
Production manager is assigned the responsibility of inspecting that each stage of the production process is properly completed
After the production process is complete, a quality control inspection is conducted to detect any defects before the clothing is transferred to the finished goods department.
Factory or production manager authorises, by signature, the transfer of the manufactured
goods to inventory
Controls & Test Controls
• Supervision and review
• Segregation of duties
• Rotation of duties
• Personnel take leave regularly
• Management control
• Sufficient stationery control
• Scrutinise all records and documents for extraordinary items
• Test castings and calculations on all selected items, documents and ledger accounts
Issue of raw materials to production:
Completeness, Validity
Inventory only leaves the storeroom based on properly authorised documentation
Recording:
Completeness, Accuracy
All inventory is accurately recorded at the correct quantity and prices
Safeguarding:
Completeness, Existence
Inventory should be safeguarded against theft and damage