Eliminating Difference in Absorption and Variable Costing through Lean Production

 


Lean Production
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Lean Production
A lean production is an approach in production that aims to reduce waste and maximize value. In this regard, waste is regarded as anything that does not enhance value enhance value for clients. The techniques used in lean production are applicable in diverse settings. The aim is to ensure minimal costs are incurred during the production process (Belhadi et al., 2018). There are numerous benefits associated with lean production, including enhanced quality, improved customer satisfaction, timely delivery, enhanced efficiency, minimal defects, and minimal resource consumption. In an environment where lean production is applied, there is wastage reduced while productivity is increased. Therefore, the company will be able to realize more profits.
Organizations of all sizes have applied lean production to minimize waste and enhance profits. There are direct financial impacts associated with the implementation of lean production. Many industries are applying the method because of its perceived benefits. Many advantages are associated with lean thinking, including eliminating the difference in the reported net operating income (Bamber & Dale, 2000). Therefore, lean production is an essential strategy that can enable ...