Production - PowerPoint PPT Presentation

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Production

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Z klady podnikov ekonomiky - Vysok u en technick ... ... Production – PowerPoint PPT presentation

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Title: Production


1
Production
2
Definition of Term Production
  • Generally it is possible to characterize
    production as a process of a new product
  • arising.
  • Production is company's activity usually
    connected
  • With the mining of raw materials
  • With the realization of products
  • With supplies of works
  • With delivering services
  • Production in a building company is the activity
    connected wit following supplies
  • Building up of new building objects
  • Repairs, modernizations and reconstructions of
    existing building objects
  • Production is main activity of a company and it
    consists in the combination of
  • productive factors in order to achieve the
    company's output.

3
The main idea of the productive process
4
Inputs That Enter Production Basic Productive
Factors
  • Basic productive factors
  • Material
  • Machines, machinery, equipment
  • Labor power

5
Material
  • Basic characteristic of material in the frame of
    building
  • production
  • Material is in the building production volumetric
    the most important basic productive factor
  • On average it creates 60 from the total costs
    for the production, except line constructions
    (higher costs for machines and machinery)

6
Classification of Material
  • Material can be classified according to following
  • aspects
  • Cost management
  • Time of entering the production
  • Price and costs calculation
  • Amount of consumption assessment

7
Classification of Material
  • Classification of Material according to the cost
    management
  • Basic
  • It becomes directly the essential part of the
    finished product
  • Auxiliary
  • it enters the production
  • Directly, but it does not become the essential
    part
  • Indirectly as a material consumed for e.g.
    managing works and activities
  • Fueling
  • It ensures production, but it does not become a
    part of finished products
  • Wrappings
  • They serve for the protection of products e.g.
    during transport, storage, manipulation

8
Classification of Material
  • Classification of Material according to the time
    of entering production
  • Material enters directly the production
  • Material enters store and it is filed as
    inventory
  • Inventory
  • Material and raw materials ensuring the fluent
    production in the company
  • The highest volume of inventory is created mainly
    by basic materials
  • Materials are bought sooner before their
    consumption in the production and they are stored
  • Acquisition of inventory evokes in the company
    the need of certain amount of financial resources
  • Expenditures connected with purchase (without
    VAT)
  • expenditures for material purchase
  • Expenditures connected with the transport of
    materials
  • Expenditures connected with storage
  • Expenditures connected with paid 19 VAT from
    purchase price

9
Inventory Management
  • Main objective of inventory management
  • To keep amount of inventory on the level that
    allows to ensure fluent production with minimal
    costs
  • For material acquisition
  • For material storage
  • To soften impacts of casual variations in
    processes of inventory supply or processes of the
    production
  • Characteristics of optimization requirements by
    the inventory
  • management
  • Minimization of total costs for acquisition and
    maintenance of inventory with respect of
  • Full covering of expected needs
  • Assurance of production also in the case of some
    variances during supplies or during using of
    inventory (creation of reserves)
  • Finding of suitable regime of orders that is
    characterized by
  • Duration of cycle of supply
  • Amount of supply

10
Classification of Material
  • Classification of material from the aspect of
    costs and price calculation
  • Direct material
  • It enters directly the production
  • Its amount it is possible to calculate in the
    form of norm of consumption expressed in m.u. of
    material per m.u. of the product (e.g. number of
    bricks per 1 m3 of masonry)
  • it concerns mainly about the basic material
  • Indirect material
  • its amount it is not possible to relate to
    certain outputs in m.u. of material consumption
    per m.u. of production
  • it is possible to allocate it to the certain part
    of production or to the production per certain
    time period
  • amount of this material and costs connected with
    its consumption it is possible to calculate
    indirectly with the help of calculated rates from
    defined basis
  • the rate expresses relationship between material
    (in CZK, m.u.) and basis (CZK, m.u.)

11
Classification of Material
  • Classification of material from the aspect of the
    amount of
  • consumption assessment
  • Determinable materials
  • defined norm of consumption in m.u. of material
    per m.u. of production for that the material was
    intended
  • norm of consumptions defined only for volumetric
    considerable materials (monitored amount of their
    consumption)
  • norm of consumption serves for monitoring of
    amount of consumption
  • with the observance of the norm of consumption it
    is possible to avoid lost of material caused by
    its wasting and adulteration
  • Indeterminable materials
  • norm of consumption is not defined for low volume
    of consumption or for the technical difficulty or
    impossibility
  • amount of consumption is predicted from the
    consumption of past periods

12
Costs for Material
  • CM M x P
  • CZK m.u. x CZK/m.u.
  • Amount of consumption assesment (M)
  • determinable material
  • M NC x Q
  • m.u. m.u./m.u. x m.u.
  • indeterminable material
  • M Ms x i
  • m.u. m.u. x index
  • where
  • Ms real consumption from past period
  • i change index

13
Control of Consumption and Costs for Material
  • Planned data
  • ?
  • Real data
  • They are compared
  • per the amount of production
  • per time period
  • per an organizational unit of a company
  • per a company totally
  • Detected variations from the plan are immediately
    repaired by
  • realization of suitable operations

14
Control of Consumption and Costs for Material -
index
  • Index of material intensity
  • costs for material in CZK/amount of production in
    CZK

  • index expresses rate of costs for material
    consumption per amount of production
  • the higher value of index, the more material
    intensive the production is, and oppositely, the
    lower index, the lower material intensity

15
Machines and Machinery
  • Machines and machinery in the frame of the
    company
  • productive
  • directly partake on the production
  • are volumetric considerable from the aspect of
    costs for production
  • it is necessary to monitor their utilization and
    their operating costs in the production
  • nonproductive
  • used for the assurance of the company's operation

16
Lifetime of Machines and Machinery
  • machines and machinery are not consumed in one
    productive cycle, but during certain time the
    lifetime
  • Kinds of lifetime
  • technical lifetime
  • time, during that working machines offer
    technically perfect use
  • economical lifetime
  • time, during that it is efficient to use the
    machines (from the aspect of operating costs,
    possibility to use more efficient machine etc.)
  • it is usually shorter then technical lifetime

17
Value of Machines and Machinery
  • Using of machines and machinery in the productive
    process
  • implicates the decreasing of their utility value
    and market value
  • Utility value
  • value brought by using of machines and machinery
    for the purpose they were purchased
  • at the beginning it decreases slowly, later it
    decreases faster
  • Market value
  • value, for that it is possible to sell the
    machine or machinery
  • this value decreases fast immediately

18
Depreciation (Amortization)
  • expresses decrease of value or working machines
    and machinery
  • depreciation of the machine per a year it is
    possible calculate according to the following
    relation

19
Capacity of Working Machines
  • performance ability of working machines and
    machinery in qualitative and quantitative sense
  • Capacity can be
  • technical
  • amount of production in required quality
    expressed in m.u. per time unit
  • economic
  • amount of production that is from the economic
    aspect optimal
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