Repetitive manufacturing definition
/What is Repetitive Manufacturing?
Repetitive manufacturing is the ongoing production of the same product for an extended period of time. The product is typically assembled on a production line, where a series of tasks are completed in the same sequence by employees and/or robots. The quantity produced does not have a terminal value, after which production stops. Instead, a certain quantity is targeted for production in each successive period. This situation most commonly arises when a business has a steady stream of orders that do not vary over time. Some variation can be used in a repetitive manufacturing process, so that different members of a product family may roll off the same production line.
Materials Management for Repetitive Manufacturing
The materials management for repetitive manufacturing can involve components being staged adjacent to the production line on a regular basis, typically as existing component quantities are drawn down. Production routings tend to be relatively simply, so that raw materials are converted all the way into finished goods; there is no break, during which partially-completed goods are sent to an interim storage area. In addition, suppliers may be certified to send their deliveries straight to staging areas next to the production line; this eliminates the non-value-added waste associated with shifting goods to and from the warehouse area.
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Accounting for Repetitive Manufacturing
Process costing is used to account for goods produced using repetitive manufacturing. Under process costing, costs are accumulated during the production period and then divided by the number of units produced to arrive at the cost per unit. Backflushing may be used in order to minimize the number of accounting transactions associated with ongoing production activities.