Manufacturing management improvement through rapid production of budgets

This paper explains a method whereby manufacturing control of a firm can be facilitated by rapid preparation of coordinating budgets using simulation. Results of this process applied to a small organisation are reported. By being mathematically integrated, this budgeting system embraces the whole of a firm's activities and allows investigation of alternative policies to obtain an optimum forward plan. The program manual and an outline of the budget support software is explained and its use with a PC is demonstrated. Use of this mathematical simulation process to produce an overall budget not only provides detailed operating budgets but gives basic data such as cost standards and departmental hourly rates for use in ancillary marketing, costing and production planning programs and input to progressive performance reports. Sales, production, factory overhead and administration budgets for each department are produced in a single run for each proposal. Recommendations are given for its use as a coordinating and planning procedure, particularly for small to medium size companies.