Page 24 - Sensors and Control Systems in Manufacturing

Contents
11.1.9 Controlling Operation . . . . . . . . . . . 527 xxiii

11.1.10 Cost and Profit Analysis . . . . . . . . . 528
11.2 Information Assimilation and Decision
Making . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 529
11.2.1 Breakeven Analysis . . . . . . . . . . . . . 529
11.2.2 Breakeven Chart and Formula . . . . 529
11.2.3 Utilization of Breakeven
Analysis . . . . . . . . . . . . . . . . . . . . . . . 531
11.2.4 Incremental Analysis . . . . . . . . . . . . 532
11.2.5 The Large New Production
Order . . . . . . . . . . . . . . . . . . . . . . . . . 532
11.2.6 Make versus Buy . . . . . . . . . . . . . . . 533
11.2.7 The Importance of the Basic
Data . . . . . . . . . . . . . . . . . . . . . . . . . . 534
11.3 Communication . . . . . . . . . . . . . . . . . . . . . . . . 535
11.3.1 The Need for Timeliness . . . . . . . . . 536
11.3.2 The Reporting Strategy . . . . . . . . . . 537
11.3.3 Responsibility Centers . . . . . . . . . . . 538
11.3.4 Controllable and Uncontrollable
Costs . . . . . . . . . . . . . . . . . . . . . . . . . . 538
11.3.5 Construction of the Report . . . . . . . 540

11.3.6 Analyzing Cost and Profit Data . . . 540
11.3.7 Communication of Business
Financial Status . . . . . . . . . . . . . . . . . 541
11.4 Mathematical Methods for Planning and
Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 542
11.4.1 Dealing with Uncertainty . . . . . . . . 542
11.4.2 Objective Probability . . . . . . . . . . . . 542
11.4.3 Subjective Probability . . . . . . . . . . . 543
11.4.4 Capital Budget . . . . . . . . . . . . . . . . . 544
11.4.5 Cost of the Fixed Asset . . . . . . . . . . 544
11.4.6 The Expected Net Cash Flow . . . . . 544
11.4.7 Opportunity Cost . . . . . . . . . . . . . . . 544
11.4.8 The Present Value . . . . . . . . . . . . . . . 544
11.4.9 Inventory Analysis . . . . . . . . . . . . . . 547
11.4.10 Linear Programming . . . . . . . . . . . . 548

11.4.11 The Profit Function . . . . . . . . . . . . . . 549
11.4.12 The Constraints . . . . . . . . . . . . . . . . . 549
11.4.13 Project Management . . . . . . . . . . . . . 551
11.4.14 Simulation . . . . . . . . . . . . . . . . . . . . . . . 555
11.5 Where Do Sensors and Control Systems
Take Us? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 556
Further Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 565