The Four Steps Of The Plan Do Check Act Cycle

1288 WordsJan 25, 20166 Pages
1- 7: Briefly explain each of the four steps of the plan-do-check-act cycle. The PDCA cycle was developed by quality expert Edward Deming. There are 4 basic continuous steps to this cycle. 1) Plan: This step defines the organizations purpose and selects the focus and scope of its strategy. Some of the most important management accounting information within this step includes cost, revenue and profit projections. 2) Do: This involves the implementation of the chosen course of action. In this step both financial and non-financial information helps employees make decisions. 3) Check: This includes measuring and monitoring performance and taking short-term actions based on measured performance. Management accounting information in this step includes costs of products and product lines, costs of serving customers, customer profitability, and business unit financial and nonfinancial performance to name a few. 4) Act: This involves managers taking actions to lower costs, change resource allocations, and improve quality. As these new actions get implemented, the management team will eventually return to the planning step to assess whether its previous plan is still valid and worth continuing, or whether it has become time to adapt the plan or perhaps introduce a new strategic plan. This launches another trip around its PDCA cycle. 1-16. Role of financial information for continuous improvement. Consider an organization that has empowered its employees, asking them to improve
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