Two basic concepts for mix and yield (quantity) variances:
Basic 1:
Mix variances exist where components used in process cannot
be refined back to original components once used in the process. Processes,
which absorb mix of uncountable materials, are likely to produce mix variances.
Where materials are countable in term of pieces and units there will not be mix
and yield variances however, it may incur standard loss/damage of materials.
Basic 2:
Marginal change in mix ratio of two or more materials is unlikely
to produce different product. Ie. the mix will not affect the nature and
purpose of product though the quality may vary.
E.g. Food and beverages: No two food recipe are identical.
Master Chefs has their own techniques, some secret ingredients and recipe for
producing any food item. This way they set the standard mix but the change in
real circumstance (e.g. environment, surveillance, operational issues = the
know-how of operator) creates some variation from standard. This ultimately
causes mix and yield variances.
E.g. Construction: Color mix and concrete mix
Other e.g. chemical mix and amalgamation of metals
Planning and Operational variances: A synopsis form
"Measuring planning variances"
Students should be able to deduce that an improvement in
technology is outside the control of ****** * **** and is, by nature, a
planning 'error'. Equally, the better negotiation of a price should be
recognised as an operational issue. Simple interpretation is not considered
beyond the scope of Paper F5 students, ******* ********** ******.
The key issue is that operational variances are the only
variances within the control of the managers, so performance must be assessed
with only these figures in mind. ***** ******* ********.
A performance manager cannot appraise variances in isolation
from each other.
Materials mix and yield variances
Measuring planning variances
Material mix and yield variances
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