An Aircraft Manufacturing Company Developed a Computer Simulation Representing the Very

question 25

Essay

An aircraft manufacturing company developed a computer simulation representing the very complex processes and subgroups that create an airplane. Teams of production employees would participate in a game where trainers gave them the challenge of reducing costs or minimizing space using the simulation. As the trainers predicted, the team's actions would almost always result in unexpected consequences. Explain how this simulation relates to the open systems perspective of organizational behaviour.

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Definitions:

Absorption Costing

A technique in accounting where all costs incurred from manufacturing, like direct materials, direct labor, and both kinds of manufacturing overhead (variable and fixed), are factored into the product's pricing.

Unit Product Cost

The total cost incurred to produce, bundle, and ready one unit for sale, including both direct and allocated overhead costs.

Absorption Costing

An accounting method that includes all direct costs and allocated indirect costs (both fixed and variable) in the cost of a product.

Variable Costing

An accounting method that includes only variable costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of goods sold and excludes fixed manufacturing overhead.