Lecture 7: Controlling - Equipment Cost: use of the

equipment
CONTROL PROCESS
- Overhead Cost: expenses needed to
ESTABLISH standards- desired outcome stay in business but not related to
the manufacture of products
MEASURE performance- actual outcome
 Electric bill, water bill,
COMPARE performance to standards- rent, office supplies
higher or lower?
COMPUTATIONS!!!
TAKE corrective action- depends on the
 Determining the Equipment Cost/
comparison
Test
TYPES OF CONTROL
{(E/L+M}
Feedforward
A
- Control for the future
Where:
- To prevent anticipated problems
E: cost of equipment
Concurrent
L: useful life of the equipment
- Control for the present
- Minimize problems as they occur M: annual maintenance cost
Feedback A: annual test performed
- Control for the past
- To correct problems that have
 Determining the Payback Period or
occurred
ROI
POLICY AND PROCEDURE MANUALS
Purchase price of the machine
 Labs’ most effective management
Annual income of the machine
tool
 Most neglected
 Excuses:
 Determining the breakeven point
o Too little time
o net income is 0
o Too much work
o includes fixed and variable
o Uncertainty about the content
costs
Purpose:  fixed cost: constant
regardless of volume of
- Promote teamwork and human
test (salary)
relations
 variable cost: supplies
- Promote the 3 C’s: clarity,
and reagents
consistency, continuity
- Establish standards of performance
- Tool for orientation/ training
- Help manager handle problems
PRODUCTION CONTROL
- To find out whether the
organization is gaining or not
Labor:
Direct Labor Cost: medical
technologists
Indirect Labor Cost: clerks, supervisor
Material:
Direct Material Cost: reagents. Strip,
standards
Indirect Material Cost: shared
equipment, supplies