Lehigh Steel

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Lehigh Steel

Lehigh Steel was founded in 1913 and it manufactures specialty steels for high strength, high use applications. In 1975 it was acquired by Palmer due to its ownership of Continuous Rolling Mill, a specialized equipment that convert steel intermediate shape to wire for Palmer’s bearing. The industry as a whole is highly competitive, even a small change in price could alter customers’ consumption decision greatly, keeping costs down is therefore, one of the most important targets Its financial performance was always remarkable because of the high quality of products and loyalty of customers. However, severe downturn performances could be identified since 1991 as the business condition was in recession and the
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2) Generates useful information on how money is being spent 3) Encourages management to evaluate the efficiency and cost-effectiveness of program activities. 4) Encourages the consideration of alternative methods of production. 5) Generates more information to measure and reward performance, and prioritizes activities for cost reductions.

Disadvantages (Problems) 1) Implementation of ABC is a time consuming task, more staff and resources are needed compare to traditional costing. 2) Opposition from management. ABC makes waste visible in the production processes and it reveals the profitability of products, the results might violate the traditional results and managers may not intend to change. 3) It is still a method of allocation of costs, therefore, the problems arise in absorption costing system will appear in ABC as well.

Theory Of Constraints (TOC)

‘The theory of constraints (TOC) is a holistic management philosophy developed by Dr. Eliyahu M. Goldratt that is based on the principle that complex systems exhibit inherent simplicity. Even a very complex system made up of hundreds of people and scores of machines can have any given time only a very, very small number of variables—perhaps only one (known as a constraint)—that actually limits the ability

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