In this paper, we discuss the support of Operations Management decisions with Management Accounting information. We describe two such decisions: setting the MPS and Order Acceptance. We discuss how these decisions can be supported by financial information. We present a model for calculating the financial impact ofa MPS. If different MPS scenarios are feasible, the impact of each can be calculated as a basis for comparison and decision-making. However, it is not straightforward to calculate the financial impact of a MPS. There are problems, e.g. the absence of sales prices and material values, because of the criteria used for selecting products and components for the MPS. These problems are discussed and a model to resolve these problems is demonstrated. The model is theoretically interesting because it makes clear some of the differences between Operations Management concepts for planning and decision-making, and such concepts in Management Account ing. We then discuss Order Acceptance in direct relation with Master Production Scheduling. In this way, the economic trade-offs of the Order Acceptance decision are very different from the traditional trade-offs in Order Acceptance decisions when discussed in isolation from other planning decisions. Finally, since setting the MPS and Order Acceptance are often supported by information systems, we present elements of a data structure for our financial requirements that can be used additionally to data structures present in current information systems.
|Journal||Production planning & control|
|Publication status||Published - 1999|