Benchmarking Involves the Identification of the Best Practices Used by World-Class

question 50

Essay

Benchmarking involves the identification of the best practices used by world-class competitors.Discuss the following widely recognized best practices: activity-based management and just-in-time inventory.

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Definitions:

Direct Labour

Labor costs directly associated with the manufacturing of a product or provision of a service, often considered a variable cost.

Work in Process

Inventory that includes goods in the midst of the production process, between raw materials and finished goods stages.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor costs.

Predetermined Rate

An estimated rate used to apply manufacturing overhead costs to products, calculated before the actual overhead costs are known.