ACIS 2115 Chapter Notes - Chapter 2: Direct Labor Cost, Optimism Bias, Lean Manufacturing
23 Mar 2018
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Document Summary
Lean thinking (lean production)- a management approach that organizes resources such as people and machines around the flow of business processes and that that only produces units in response to customer orders: sometimes called just in time productions. Lean thinking only allows production in response to customer orders, the number of units produced tends to equal the number of units sold. Important role for organizational leaders is to unite the behaviors of their fellow employees around two common themes: pursuing strategic goals and making optimal decisions. Leaders need to understand intrinsic motivation, extrinsic incentives and cognitive bias and how they influence human behavior. Indirect materials- included as part of manufacturing overhead: direct labor, consists of labor costs that can be easily traced to individual units of product. Labor costs that cant be physically traced to particular products are termed indirect labor: manufacturing overhead.
