TQC Principles and Just-in-Time Philosophy

This assignment delves into the fundamental principles of Total Quality Control (TQC), highlighting its emphasis on customer satisfaction, process improvement, and people empowerment. It further examines the Just-in-Time (JIT) production system, showcasing how it minimizes costs and waste while ensuring timely delivery of products that meet customer expectations. The assignment emphasizes continuous improvement (kaizen) as a key driver for both TQC and JIT success.

Running head: MANAGEMENT ACCOUNTING 1
Management Accounting
Name:
Institution:
Date:

MANAGEMENT ACCOUNTING 2
Question 1
Email to the management of CEO Jumper jackfruit company
From :Albert Lee<[e-mail]>
Sent: wed 20/12/2017 2.38 AM
To: Paul mark<[e-mail]>
CC: jasmine Lim accounting executive <[e-mail]>
Subject : Budget 2018
Profit Budget
January February March April
Sales 300 500 200 200
Price 300 300 300 300
Revenue 90000 150000 60000 60000
Direct material($20/hr) 6000 10000 4000 4000
Direct labor(25hr/hr) 30000 50000 20000 20000
Variable overheads 1500 2500 1000 1000
Selling expenses 600 1000 400 400
Variable expenses 38100 63500 25400 25400

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Contribution 51900 86500 34600 34600
Fixed cost 20000 20000 20000 20000
Net profit 31900 66500 14600 14600
The profit budget had an error initially on the revenue part, The error occurred when the
selling price used was indicated as $220 per case instead of $300. Second, February sales
were under stated by 300 units. The accountant had recorded the projected sales in January at
200 units instead of 500 units. This are the two items that caused all those errors in the profit
budget(Lansdowne, 2003)..
Direct Material Purchase
ref Jan Feb March april
Sales 300 500 200
Beginning Inventory a 150 250 100
Desired Ending Inventory b 250 100 100
Production (units) A+b=c 400 350 200
DM( Needed for production) c 400 350 200
Beginning Inventory (DM) 50% 200 175 100
Desired ending inventory 175 100 100

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DM(Purchase) Units 375 275 200
Cost of DM 20 20 20
Total 7500 5500 4000
Direct labor budget
Jan Feb March
Production Units 400 350 200
Hours required to complete one unit 4 4 4
Direct labor needed 1600 1400 800
DL hours 25 25 25
Total 40000 35000 20000
Cash Budget
Jan FEB March
Receipts from sales 90000 150000 60000
Payment to suppliers 7500 5500 4000
Overhead cost 22000 21750 21000
Lumberjack salaries 45000 42000 24000
Total Cost 69500 62250 45000

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Operating cash flows 20500 87750 15000
Overhead budget
Jan Feb mar
Production units 400 350 200
VC per unit 5 5 5
Total VC 2000 1750 1000
F.C 20,000 20,000 20000
Total OH 22000 21750 21000
In cash budget management, the discrepancies come in the month of January where the
previously done cash flow was a negative case. The difference is in the receipts from sales
where Jumping Jackfruit was understating the sales received by a huge margin leading to
negative cash flows. The previously stated sales receipt for the month of January $66,000 and
the current sales receipt after adjustment is $ 90000(Lansdowne, 2003).. In the month of
February the receipts from sales was put at $ 132,000 but after adjustment of the cash prices,
the receipts came to about $ 150,000. In the month of March the receipts from sales were $
52,800 and the budgeted sales after adjustment was $60,000. This will lead to a positive cash

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flow budgeted for jumper jackfruit. Total costs will decrease increasing the net cash flows in
each month(Lansdowne, 2003).
In determining the operating cash flows of a business, the total cost and the sales revenues are
the determining factors. For the accountant, the main reason for the disparity in operating
cash flow is the misrepresentation of figures especially in the revenue.
In order to interpret the statement of flows, you must start with the final part of the balance
that you can identify as the increase or decrease of cash, the starting and ending balance of all
cash that includes cash balances, have maturity for collection in a period greater than 90
days(Lansdowne, 2003).
It is important that you independently analyze the results of increases or decreases in the
amount of funds and conclude the behavior of each of the categories and their impact on the
final result.
The operational activity shows the management of the company in the generation of cash
from the operation cycle (purchasing, supply, production, delivery, sale and collection), ie if
the results are positive or surplus, the company can be considered to be managed optimally
and is getting its resources from the same operation, not based on debts and leverage. To
perform the representation of the flow obtained by the operations, two methods can be used
to calculate cash flow as we saw in the previous article, the direct or indirect
method(Lansdowne, 2003).
With respect to investment activities, these relate to the acquisition or disposal of fixed assets.
Because most companies usually acquire more assets than those who sell the effect of these
activities on the cash flow is usually negative.

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In the case of financing activities, the effect of these transactions with creditors, suppliers and
shareholders is included(Jeremko, 2004).. The bank interest earned on the loans and the
investments that the investors make in the company are reflected as a positive flow of funds,
while the amortization of said loans and the payment of the dividends are considered a
negative cash flow, that is to say a money outflow(Lansdowne, 2003). It is essential that you
analyze the investment needs of the company depending on your business turnover, for
example in companies that are engaged in the manufacturing industry you may have a higher
capital requirement than a consulting company might need.
Cash Flow
By having the information of all the categories it is time to look for a relation between the
financing activities and the investment activities since this will give you a guideline of
whether the active acquisitions that you are realizing are being supported by the company or
are owned by your creditors. An important fact to consider in the case of financing is to
consider that when an asset is acquired through a loan, the useful life of the loan is not less
than the financing term. This will assure you that you will not be allocating amounts of cash
to payments that during that period are not leaving you any benefit for the operation of the
company(Jeremko, 2004)..
As you can see, the analysis of the various financial statements such as the income statement,
the balance sheet and the cash flow provide valuable information for investors and for

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making decisions about the management of the company. It is important to be able to
distinguish what type of data you can present each of them and in this way to form a
complete report with different perspectives about the operation and use of resources(Jeremko,
2004)..
Regards
Accountant
Question 2
As long as the customers get the convenience of purchasing both the case and the dice, then
they would be willing to pay premium for the product. Hence the two companies should
come together join effort to make a product that any consumer would demand and like. This
is important because of cost cutting(Hubbard, 2014).
As competition increasingly focuses on differentiation and execution, CEOs will have to steer
their companies toward rapid experimentation and innovation, better insight into customer
insights, effective pricing and promotions, and great customer service. The big challenges
will be to diagnose what the qualities are missing in a company and to develop them
quickly(Jeremko, 2004).
The actions of differentiation are being seen by the two companies making dice. We know
that there may be several aspects that hamper business improvement. In the commercial many
times it feels that the organizations do not find the return to him to progress in being different
or special. They are encyst in a way to perceive more of the same without being able to see
different alternatives. That our organization has a different product, service or brand is a

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capacity that does not die, and can be recreated by developing new ways of perceiving to find
solutions in each case(García-Alcaraz, Oropesa-Vento &Maldonado-Macías, n.d.) .
Execution
The two companies should prioritize Specific advertising of "special offers" and the use of
simple and prominent posters allow retail establishments to credit the value they offer and are
likely to become increasingly visible elements of the competitive landscape(HILL, 2016). It
is important to undertake the promotional initiatives and verify that they are sustainable. In
their attempt to compete against value-oriented Japanese companies, for example, American
automakers discovered the dangers of announcing large discounts that were valuable but also
undermined future margins, as they induced customers to postpone the purchase until that the
cars were lowered. Ultimately, the ability to offer competitive prices, even selectively,
depends on keeping costs at bay. In view of the virtuous circle that reinforces the solid
financial figures of many value-based companies, it is impossible to stand or stand by them
through isolated price-cutting initiatives(HILL, 2016). Continuous improvement is necessary,
suggesting the importance of one company in the dice making business adopting and
simplified lean manufacturing methods, which reduces costs and improves quality
consistently and simultaneously.
Much of the market has asked for some alternative to make a difference, given that in recent
years there was a rapid growth and generally had structure to support it, which has been
resorted to or intensified these professional benefits, since there are already many challenges
for different market issues, and when the market is good, the concerns are different, and there
is our challenge, but not only in the professional, but also in the personal to bring a tool as the
Public Relations to give a true added value(Mika, 2006).

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Quality and service are phenomena driven by many factors, which have been emerging for
some time and is manifested according to the times, creating winners and losers.
We all have something personal and corporate that makes us special and different. The new
business era demands to be innovative, so that to help our company we must achieve success
by developing tools and solutions designed to make the most of it. Nowadays, organizations
are growing and the fundamental factors that explain the phenomenon are related to the
increase in productivity, forging a successful business culture, centered simultaneously on the
generation of economic and social value(Jeremko, 2004).
But then; How to differentiate and anticipate these movements?
In a context of intense competition, demand for short-term results, in an effort to grow, etc.,
companies fight for competitive advantage, fought real battles to win market shares and
struggle to differentiate themselves. At present, so loaded with players the flow is reduced
and everyone is competing(Burman&Slemrod, 2013).
Knowing the public, the market and the competition, a first step would be to propose
abandoning the battles and going out in search of new market spaces that are still unclaimed.
A systematic and particular approach to making competition an irrelevant factor. So the two
companies should understand an old concept of the Prussian armies during the First World
War; "The strategy does not consist of a long plan of action, it is the idea steadily throughout
changing circumstances(Mika, 2006).
Strategy, a concrete fact

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We should note that if we have a problem with our strategy there is so much competition,
there is more tactical, more action and less time. Evaluating stocks and models in times of
greater business bonanza and adapting the current ones can be a good benchmark.
The consumer is at the center of the strategy, it is the engine of the small and continuous
adaptations that are being implemented to the business plan. There is not much secret, it is the
creativity and the local knowledge of the market that can give us the competitive advantage.
The strategy is to have a vision to know where we stand and what our destiny will
be(Jeremko, 2004). In these times you must be ready to seduce, creativity, quality and level
of products enrich the market. Improvisation ceases to be the priority in every company and
passes the scepter to professionalism and training, problems must be identified immediately
and honestly, facilitating a strategy and taking appropriate countermeasures. Part of our
responsibility is to look at where we want to be positioned and differentiated, and
consequently what steps to take in the area of Public Relations (PR) and how to be in the
market(Medinilla, n.d.). The most conspicuous advantage of innovations is an increase of
sales in the main areas. At the commercial level, being creative and innovative can be part of
the difference; In fact, intelligent innovations can punish competition. But can the application
of differences help companies to sell more, gain market share and generate added value? In
general differentiation is more an art than a science, we can establish what works and what
does not work for us as well for competition. Companies are growing, at the same time there
is an effect that makes each area work in its own sector; but if you do not execute and speak
the strategy to each other, however elaborate it may be, it will not succeed if it is not
implemented in the whole.(Jeremko, 2004)
.Always maintain control of the organization, optimizing its ability to identify, prevent and
respond to possible and constant threats that threaten against your products. The companies
can no longer operate with disintegrated information. It requires data and information

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integrity, with the ability to add functionality to users and to handle all the information that
represents the business, its processes and the market in which it competes. It must represent
everything that gives life and movement to the business of the company, each and every one
of the parties must be related according to the needs of each business and be part of
it(Medinilla, n.d.)
Explore and consolidate planning activities is a priority. Marketing, promotions, press, public
relations and other tools are extremely useful and necessary in all plans of companies that
want to survive(Halevi, 2010). The best public relations in a service company is the service
that the people who perform in our company has a good vocation of service. Not only do it
because it is your obligation but feel that by giving service the way the other is requiring it
also produces satisfaction. Differentiation, a constant journey At the present time it is no
longer possible to impose or position a brand or product on the public, but these must be
adopted by the people; knowing that the real challenge is to confirm the relevance(Stewart,
2012).. We must reflect, pause, look carefully at the context in which we must survive.
Try to perceive changes in customer requirements, review marketing channels, advertise, and
public relations do not become obsolete; not clinging to products and concepts just because
they fit into established business models(Sower & Sower, n.d.).
The organization must optimize the performance of its resources almost permanently,
accelerate the releases of services, taking into account that innovation is the ability to
differentiate to excel in the rest, knowing which are the processes that must be supported,
evaluating how to consolidate and optimize what already exists(Stewart, 2012).
The scheme of work is of cooperation and collaboration which allows to maintain an image, a
name and a brand. Providing good technique, great innovation and the best service is
undoubtedly what allows the company to generate contribution in front of others. People

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compare results not products, so we must know that if we are unable to achieve that promise
we will be in a big mistake(Kaizen Workshops for Lean Healthcare, 2016). On several
occasions the client has an expectation, so we must know how to select all processes and
execution of them over time. We must consider the conditions of financial solidity, the
availability of a customer satisfaction plan with a defined process, management measures of
the same and from the resources necessary to apply them to the development of each
product(Stewart, 2012).
Question 3
Just-In-Time Strategy JIT
Jumping jackfruit uses this philosophy to improve on quality and maximize production of the
items being produced. It allows to improve the quality and to provide a maximum of
motivation for the solution of problems. It is synonymous with simplicity, efficiency and a
minimum of waste. The JIT requires minimum security stocks in materials and products in
process, so when the time comes to produce the product, the parts in the production process,
should be the best which must be obtained(Stewart, 2012).. This rule ensures high forecast
yields on the production line. The second rule refers to the size of the production batch. The
smallest batch size should always be produced for any product, regardless of the production
volume of the product. These two rules constitute the pillars of the JIT principles of
operation. A violation of any of them would cause serious problems in the implementation of
the system(Aaker& Mills, 2005).
Full Analysis of productive Costs
The absolute elimination of unproductive costs, we must take into account the following

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steps:
Improving performance will make sense only when tied to cost reduction.
Look at the performance of each operator and each line. Such performance should be
improved at each step and at the same time for the entire plant as a unit.
Actual performance improvement is achieved when the level of unproductive costs equals
zero and a 100% work rate is achieved. Only those activities that change products physically
add value that is, counting, moving or even inspecting are tasks that do not add value, but
cost; therefore they are wasteful. Another principle to be added to the Just-in-time philosophy
is the so-called continuous improvement(Stewart, 2012).
The Functioning of the Factories
In a factory, poor organization and poorly managed operations are manifested by high stock
levels and long production times. In some factories the phenomenon is self-feeding: an order
that is waiting for parts is very urgent and to satisfy it is completed with parts made for other
customers, whose orders will be in turn missing parts. This is an example of Jumper jack fruit
industries(Kaizen Workshops for Lean Healthcare, 2016).
Companies must know how to respond to market expectations, for which they must
manufacture the products that customers want, in the terms and with the level of quality they
require, for a minimum price. Traditional industry does not have enough capacity for this.
Their factories are lacking in agility and speed of action. The Western does not have the
healthy habit of fighting the causes of problems, but before every difficulty always finds a

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means that makes the effect bearable(Stewart, 2012).. It systematically contributes to
increasing costs.
The breakdowns of the machines. To create safety stocks to prevent against the effect of
eventual damages.
Quality problems. To achieve the level of efficiency and competitiveness required today, it is
important to stop treating the effects of the problems and to address their causes. It is
therefore necessary to identify such causes. The key causes are those that are not the
consequence of others and that, therefore, they should formulate logically among the real
causes of inefficiency; being such:
The preliminary step for the application of the just-in-time production system is to
completely identify unproductive costs such as: By eliminating these unproductive costs we
can fully improve operational performance with a wide margin. The just-in-time production
system clearly reveals an excess of manpower. A single supplier, if the supplier has
sufficient capacity.
Only those activities that change products physically add value. That is, counting, moving or
even inspecting are tasks that do not add value, but cost; therefore they are wasteful.
Operating advantages brought about by a strong reduction of stock and terms
Kaizen’s Fundamentals
The important foundations in realizing Kaizen's philosophy is Commitment and Discipline at
every level of the organization.
The discipline and constancy are what makes kaizen different from other methodologies and
so makes it a philosophy. The group of people who perform Kaizen after fixing a problem

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continue to improve and do not stop or wait for another problem.
In terms of commitment it should be noted that every level of organization has involvement
in kaizen. It is very common to say that kaizen is for the plant and operators that is not so
kaizen starts from top to bottom(Kaizen Workshops for Lean Healthcare, 2016). This begins
with the president improving at his level, the managers, managers and supervisors get
involved in the teams to improve day by day. Here we are talking about that there may be
teams in finance, in Customer Service, Sales, Supply Chain etc ...
What is the purpose of Kaizen in the company?
Kaizen serves to detect and solve problems in all areas of our organization and has as a
priority to review and optimize all the processes that are performed. A company with the
Kaizen philosophy has as a first competitive advantage the always being in change to
improve and its motivated staff doing kaizen activities.
Kaizen requires investment?
Kaizen teams must review and improve day by day in the capacity of their resources. The
important thing is that if the team gets to have a solution and must make an investment this
should be accepted by the business. It should be noted that not all solutions must be with
investment.
What are the most used tools in Kaizen?
How to implement Kaizen and what structure should there be in your organization? Kaizen is
a philosophy for the company so its implementation has certain steps and we can suggest
these by experiences acquired by the company.
The structure of kaizen in the organization is the fundamental basis so that it has no obstacles

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in time and therefore we make reference to our experience. Many times we ask ourselves the
question why Japanese companies are competitive `, surely many of the answers to this
question have support in the Kaizen and is that Kaizen is not a simple concept, is a whole
way of life that involves both managers and workers in the pursuit of progressive
improvement of business(Kaizen Workshops for Lean Healthcare, 2016).
The Key to Japanese Competitive Advantage is explained in a simple way what the essence
of this philosophy is: Kaizen means improvement, even more means progressive
improvement that involves everyone and that means that our way of life, already whether at
work or in social and family life, is so valuable that it deserves to be constantly improved.
The essence of all Japanese administrative practices, such as: productivity improvement,
quality control activities, quality circles, zero defects, suggestion system, etc., can be defined
using a single term, Kaizen.The concept of Kaizen can be visualized as an umbrella covering
all these Japanese administrative techniques that have achieved so much popularity
worldwide(Stewart, 2012).. The Kaizen explains why in Japan, companies cannot remain the
same for a long time. This perception is the difference in how we understand change in Japan
and the West.
Unlike Western practices, the Kaizen is people-oriented and directed at people's efforts.
Likewise the Kaizen emphasizes the importance of the processes since these must be
improved before the final results are produced.
The Kaizen is based on the Culture of Quality
Total (TQC), whose philosophy is Quality as the basis for customer satisfaction.
The Organizational Mission in KAIZEN is:
The mission is to continuously improve our products and services to meet the needs of our

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customers, enabling us to thrive as a company and provide a reasonable return on investment
to our shareholders. Vision is the result of our dreams in action and precedes success. A
vision without action does not give results, it makes no sense(Jeremko, 2004).. The vision
allows us to define our destiny based on clear objectives, jumper jackfruit do not have it,
there is no future" .
Guiding principles of TQC
TQC will bring about some changes in the old style of doing business. There are four guiding
principles that could be called "TQC Commandments".
Customer satisfaction
First of all must be customer satisfaction. Our products and services must exceed the needs
and expectations of our customers in all areas of quality, costs, delivery and time. The
objective is to give greater value to the product that our customers are willing to pay(Stewart,
2012)..
Process Improvement
All work is the result of a process. TQC focuses on this process until you understand, manage
and execute it. When the process is understood, it can be continually improved. The
traditional mercantile philosophy considers innovation as a source of improvement of the
process.
People
For TQC, the people have more importance, the partners are the main source of the better
development of the processes.We value the dedication, knowledge and creativity of men and

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women. Everyone has the ability to contribute in the processes of the company (Stewart,
2012).
Conclusions
The goal is to provide customer satisfaction while minimizing the total cost. This is the
essence of the process "just in time". Thus, through a continuous improvement program
(kaizen) Just-in-time provides "perfect quality products, in the exact quantities needed, at the
precise moment they are needed, at the lowest total cost of delivery" of the Just-in-time is no
longer a competitive advantage, but an imperative need to participate in the market game. As
a complement to what has already been expressed in this text we suggest two videos through
which you can learn more about the philosophy of production just in time and its advantages,
as well as the main elements that make it up(Kaizen Workshops for Lean Healthcare, 2016).
References
Aaker, D., & Mills, M. (2005).Strategic market management. Australia: Wiley.
Burman, L., &Slemrod, J. (2013).Taxes in America. New York: Oxford University Press.
Checkley, K. (2002). Strategic Cash Flow Management.Chichester: Capstone Pub.García-
Alcaraz, J., Oropesa-Vento, M., &Maldonado-Macías, A. Kaizen planning, implementing and
controlling.
Halevi, G. (2010). Industrial competitiveness. Dordrecht: Springer.