Inventory costs make up a substantial part of any manufacturing or distributing company’s total expenses. To ensure the good financial health of your business, it is necessary to know how to make sense of these expenses and how to balance them.
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Job costing means tracking the costs related to individual orders. This allows accounting to measure the profitability of each project separately and to use it as a basis for customer quotes and financial planning.
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Capacity planning is an essential tool used in well-functioning manufacturing companies. It determines the necessary capacity required to meet demand and as such, it is a prerequisite for efficient production scheduling, supply chain planning, inventory management, and any other aspect of the business.
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Total Manufacturing Cost is an essential metric for understanding the productivity and profitability of a business. Among other things, it can be used to adjust the selling price of your products and to identify and cut unnecessary expenses.
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Finding the right selling price for your products is a delicate process with many moving parts. Here are some tips to help you better understand that process.
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Calculating the Cost of Goods Manufactured is a good way to get an overview of production costs and how they relate to the bottom line of your business. It allows management to identify cash drains, to adjust prices, and to track the development of the business. You can also listen to this article:
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The inventory turnover ratio is a good indicator of the performance of your company. Find a balance between sales and stock by using these formulas and tips.
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The Cost of Quality is the sum of the costs related to providing a quality product and the costs related to not providing a quality product. While an effective measure to identify cash drains, it can also be used to balance the price and quality relationship of your products.
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Although a periodic inventory system might seem clear-cut and foolproof at first glance, its disadvantages may outweigh the benefits. Perpetual inventory systems, however, are already becoming mainstream.
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Safety stock is the buffer that helps manufacturers keep serving their customers when disruptions occur. Here is how it works.
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Backorders are orders for goods that a company cannot fill at present because demand has outpaced supply.
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For a food manufacturing business, many requirements must be met, which can vary depending on the type of food you make, the facilities that you use, and the market you operate in.
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