Spoilage, Rework, and Scrap

• A situation where a reduction in production will result in less overhead allocated to the respective product

As the day-shift supervisor at the ISG Steelton steel plant, you summon the six college students who are working for you this summer, doing whatever you need done (sweeping up, sandblasting the inside of boilers that are down for maintenance, running errands, and so forth). You walk them across the plant to a field where the company stores scrap metal. The area, about the size of a football field, is stacked with organized piles of metal. You explain that everything they see has just been sold. Metal prices, which have been depressed, have finally risen enough that the company can earn a small profit by selling its scrap.

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Continuing with a food retailer, Greggs or a restaurant will want to get fresher ingredients than other retailers so that they can make sure they produce all of their products to be as fresh as can be. This can be done for example by Gregg’s own in-store bakeries having their ingredients delivered in the morning and then they bake them the same morning to make sure they are as fresh as possible. When they order the ingredients from the producers they will have to check that the supplier is storing the produce correctly before purchasing, otherwise they may purchase products that could be unsuitable for them to use and if they did use them, could create problems for them in the future. A good example of this could be

(b) Cost of Finished Goods Sitting Idle in the Warehouse: They are able to ship out   finished products effectively.

The cost of spoilage in the case is charged to Overhead Control, because the demands of the job itself did not lead to the spoilage.

To meet the growing demand for copper in Australia, mining is necessary but there is still a huge supply of recycled copper, as it plays a vital part in the conservation of the supply of chalcopyrite ore, which reduces energy consumption, decreases waste disposal, and conserves the environment. It is estimated that such recycling supplies 50% of copper used in the Australian copper industry. In 2010, it was reported that 770,000 metric tons of copper were recycled, at an estimated value of nearly six billion Australian dollars. First, the copper has to be reduced to a reusable form through baling. This form differs depending on the use of the copper. When the copper has gone through a process reducing it to a reusable form for industry, the final process is to transport the recycled copper to a smelter where it goes through melting, and is eventually smoothed into flat sheets for new industry

| Maintaining high quality also keeps costs down to help improve cash flow and keep overhead cost to a minimum.

[By doing so, customers ultimately get better value, therefore each member of the supply chain gains competitive advantage.] Pars Food Ltd currently outsources their raw materials, therefore they have looked at sourcing their own potatoes with their own transport. Due to high amounts of quality rejection of frozen chips, they would like to reduce this, thus, having their own transport means they are now in control of how their raw materials get to their factories and therefore can monitor quality more closely, ultimately improving it. In terms of investing in storage and improving customer satisfaction and zero complaint levels; Jane William’s Idea of using the Just in Time method may achieve this, by having their own transport they have control over how reliable the supply is and communication should not be a problem. Therefore products can be made as they are needed and their won’t be as much need for storage e.g. “Stake Cut Chips” which have been left in storage for 2 months and not shifted.

Before the 1870’s canning industry, food was not shipped across the United Sates; it was consumed locally. Back then the local farmer’s had a market; with the grit in their teeth, soiled hands and pants, and their backs to the sun, the farmer knew that if they grew a certain amount of food they could take it to market and sell it for a profit. Though farmers could be content, they also knew that from every harvest a portion of crop would spoil before it reached

Implementing the above automation and inventory management processes will reduce costs, but some additional benefits that can come from this would be in the form of keeping a smaller inventory on hand.

By appointing a more appropriate purchasing manager, training our customer service department and implementing an appropriate inventory management system, I feel Parts Emporium Inc. can reduce their excess inventory and begin to have increasing profit margins once again.

The manufacturing cost can be lower as the rearrangement of the production line to meet urgent order can be minimize or even eliminated.

Food gets contaminated after a certain period of time because bacteria start growing in it. Food contains certain preservatives like salts and other chemicals. However, they do not last long and so if food is not

systems which help to make the product both more durable as well as helping to reduce manufacturing costs