Production reports are used in process costing environments to track and accumulate information on total units, equivalent units, and costs by departments rather than by individual products. How could the production reports in process costing also be used for controlling or improving operations?

Embed course material concepts, principles, and theories (requires supporting citations) along with at least one scholarly, peer-reviewed reference in supporting your answer. Keep in mind that these scholarly references can be found in the Saudi Electronic Library by conducting an advanced search specific to scholarly references.

 

The Application of Production Reports in Controlling or Improving Operations

            Production reports have a significant application in operation management. By aggregating production information by departments rather than individual products, these reports are critical in enhancing functional efficiency across the entire supply chain. For instance, real-time production reports support operational decision-making. Through automation and a live reporting dashboard, current information is available to decision-makers at the right time. Such information includes what is being produced, what has not been produced, and the efficiency of the production process. With such information, it becomes possible to institute measures to improve performance.

            Secondly, based on the real-time reports, it is possible to undertake production control. This activity involves managing quality and cost, scheduling, and day-to-day operational decisions (Wolniak, 2020). The value of real-time feedback that production reports provide is that they allow for anomalies and defects to be detected early and corrective measures to be instituted. In that way, the production reports reduce the costs associated with delays in intervening to remedy such shortcomings.

            Most importantly, through the production reports, it becomes possible to link the situation at the manufacturing floor with activities in the entire supply chain. For instance, the production reports will inform the purchasing and warehousing decisions to ensure sufficient raw materials while also optimizing storage costs (Wolniak, 2020). The report improves the efficiency of the entire supply chain by ensuring that all decisions are based on the existing capacity, the demand, and any shortfalls or surplus. It is also possible to forecasting demand and tracks its variance in real-time, thereby facilitating the optimal allocation of resources.