Managerial Finance

Emerald Article: Measuring the Performance of Production Systems Using Management Ratios Hisham Fadel

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To cite this document: Hisham Fadel, 1976"Measuring the Performance of Production Systems Using Management Ratios", Managerial Finance, Vol. 2 Iss: 1 pp. 31 - 49 Permanent link to this document: http://dx.doi.org/10.1108/eb013371 Downloaded on: 18-07-2012 To copy this document: permissions@emeraldinsight.com This document has been downloaded 472 times since 2008. *

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Hussien H. Shehata, 1976"Systems Dynamics and Cash Flow Planning-A Model for Accountants", Managerial Finance, Vol. 2 Iss: 3 pp. 163 - 179 http://dx.doi.org/10.1108/eb013381 Robin Waldron, 1976"Financing the Movement of Goods between Countries", Managerial Finance, Vol. 2 Iss: 1 pp. 19 - 21 http://dx.doi.org/10.1108/eb013369 1976"The Work of the Export Credits Guarantee Department", Managerial Finance, Vol. 2 Iss: 1 pp. 50 - 58 http://dx.doi.org/10.1108/eb013372

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Measuring the Performance of Production Systems Using Management Ratios

by Hisham Fadel Management Centre, University of Bradford Production systems can be: (1) functional layout-based manufacture (sometimes referred to as batch production), (2) assembly lines and manufacturing lines, (3) plant dominated systems, (4) small groups in manufacturing (group technology), (5) small groups in assembly (group assembly), or various combinations of the above.
Accountants measure the performance of these systems, broadly speaking, in only one way. This paper suggests that the performance of different kinds of production systems requires the use of different measuring rods. It further suggests that production departments should share in designing their operational systems if they wish to be judged fairly. The age-old conflict between works managers and accountants is discussed here by a management accountant. An additional objective of this paper is to report a study of multi-product engineering manufacturing firms in order to develop an improved and more detailed framework within which to conduct performance measurement. The measurement of performance is a primary objective for all management teams when they consider the way in which control should be effected. The multi-product engineering firm in Britain manufactures a wide and diverse range of products in a market which is difficult to predict and has a continual degree of change in product mix. In such systems the basis of the organisation of production centres is functionalism (millers, drillers, borers, grinders, etc.) and the system of production is best described as a "functional layout-based system" (Figure 1). The second production system listed, alone is mainly applicable to engineering products (automobiles, television sets, refrigerators, etc.) of a multi-product type in which the product range is not nearly as wide and diverse as the functional layoutbased system, and this is called an assembly-line or flow-line system. The flow-line system is usually illustrated as an assembly system (flow-line assemblyFigure 2) but there are also manufacturing lines (Figure 3). Whereas the functional layout-based system is usually based in manufacturing, it is also possible to observe it in assembly.

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1. Similar metal-cutting machines are collected together. 2. Skills are brought together and trade training is given within sections. 3. The top operator becomes foreman. His qualities of leadership are not in question, since he carries the authority of superior skill. 4. Cost accounting begins with the need to define cost centres. It was quite natural for the sections above to form the basis of cost centre definition. Source: G. A. B. Edwards[1].

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One foreman and one team of workers complete each productive stage and the machines arc used in the same sequence. These two systems of production, functional layout-based andflow-line(assembly and manufacturing) are those in most common use and are generally considered to be labour intensive. A third system of production, again based on flow, is the plant-dominated system identified by Edwards[2] and Champion[3] who observed that although there are many varying degrees of plant domination, there appears to be the common feature of "degree of plant domination" ranging from a fully automated plant to one which may employ several teams of people (Figure 4). Such systems are not relatively labour intensive when compared to functionalism orflow-lines,but are often referred to as capital intensive by economists. The observations of Edwards' research team[4], in the late sixties and early seventies, led to the notion that a system should be orderly and systematic but they observed also that, although some production systemsfor example, those based on the flowline conceptwere deliberately designed systems and as such were orderly and systematic, there were others which were much less so. The many different kinds of products made under functionalism (functional layout-based) seemed to be undisciplined, unsystematic and disorderly (a non-system in fact). There were rules and laws governing some systems which often were clearly evident, but there were either no laws or they were continually being contravened in "systems" of the functional type. Figure 5 shows some aspects of unsystematic behaviourroutine or spaghetti patterns through which raw materials are processed intofinishedcomponents. Production systems numbered 4 and 5 at the beginning of this paper are applicable to small groups in manufacturing and assembly. During the sixties and seventies work in the field of group technology and cell systems led to the adoption of these new systems, based on small groups, which replaced the functional (non-systems) at Ferranti Ltd., Edinburgh; Platt International, Bolton; Whittaker-Hall and English Electric, Bradford. Furthermore, there were findings by others at Serck Audco and Hopkinsons, Huddersfield, where there appeared to be general acceptance by those firms of the absence of order and discipline in their earlier functional layout-based systems. Work of comparison by A. T. Fatheldin[5], J. C. Furlonger[6] (roofing felt), J. Champion[3] (beer, biscuits, etc.) and J. P. Schmitt[7] (glass bottle making), indicated that "system" and "production system" needed to be defined in such a way as to enable comparison between one kind of production system and another. Problems of a similar nature have been observed at British Steel and De Beer in Holland. The work of Edwards' team indicated that the functional layout-based system had "just happened" as a result of the way industrial society itself had developed[8]. The research has not only been directed at finding out how to design a production system of the small group and cell system kind, but also at developing a fundamental theory, basis, or framework which permitted comparison between one system and another. In this latter regard the work of R. N. Anthony was found by Edwards and Schmitt[7]

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to be most useful, since it provided a means for the work of production system design to be fitted into accountants' work in the field of finance and control. The diagram appertaining to this (Figure 6) is taken from Anthony but has been developed by Edwards and Schmitt to embrace marketing and production. The importance of the small group or cell system of production arises from the fact that it suggests a more detailed and more objective approach to production and the analysis of the whole problem of management in multi-product engineering firms.

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The flow of the information about materials, component parts, machine tools, sales forecasts in component-parts terms, and labour selection related to machines and component families should be arranged and co-ordinated in order to achieve high efficiency. The importance of the analysis in each of these categories and their collective association is the crux of production system design. The starting point for the writer's work is the shop-floor and the system of production. However, to keep within the framework of systems theory the writer is equally interested in the way these measures interact with other yardsticks concerned with measuring control and also those concerned with measuring strategy or policy. This research has been conducted in two major parts. Firstly, an investigation has been made into the production systems used by multi-product engineering firms. An historical examination of each system was vital in order to determine the elements and interrelationships of the elements on the one hand and the strategy of the firm on the other. Secondly, a study has been made of the objectives of the multi-product engineering firm and an attempt made to measure the effects of external and internal elements of the production system in achieving these objectives. The criteria for measuring the performance of production systems may be categorised into two phases: (a) the traditional methods, which concern engineers and technologists who have largely dominated production up to now. These are, for example, machine utilisation, setting-up costs and times, scrap rates and the costs of machine replacement. (b) the second phase, which is more concerned with integration and attempting to view the firm as a whole. This approach can be called the integrated approach because of the interrelationship between technical, economic and social aspects of production systems.

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The new approach to the measurement of the performance of production systems is as follows: (1) Ratio Analysis. This helps to investigate many of the activities of the firm, and a comparison may be conducted from year to year across similar or different firms where the characteristics of the production systems are themselves similar, and also against well established ratios which have been developed over many years[9]. Such comparisons may deal with many details relating to materials costs, labour costs and overhead costs for the whole production activity. A framework of ratios developed by the writer reflects many of the elements which affect production systems. The study of these ratios should be accompanied with a general perspective of the past performance of the firm and its future prospects. (2) Standard Costing and Budgetary Control. These accounting procedures present management with some idea of the progress being made to achieve certain targets as specified by a budget. It is often regarded as one of the most useful of the accountant's controls when used in a sophisticated manner with a full realisation of their implications for human behaviour[10, 11]. The assessment of efficiency involves not only the setting of realistic budgets and standards but also the review of actual performance compared to budget, and most importantly, taking action when variances arise. In such a way it may be possible to identify strengths and weaknesses in the policy and operations of an organisation on a continuing basis. (3) Internal "Profits" or Profit-Centred Performance Indices. Several authors, including Solomons[12] and McNally[13] have studied measures of divisional performance. The writer has also examined the advantages and disadvantages of profit-centred performance. One of the limitations of such an approach is that it might be impractical in the multi-product engineeringfirms[14]because of the way they have traditionally defined their cost centres. It is important to observe, therefore, that it becomes increasingly difficult for accountants to measure production systems if the production systems used are unsystematic. A statistician at the Department of Trade supports my view here. He states, "when the three-monthly returns come in from some of our largest firms they sometimes make mistakes. When they do, it is always the work-in-progress where the mistake is made and the order of magnitude of such mistakes may be around a million pounds." There is no doubt that this can only occur so easily in functional layout-based systems and that the work and material flows in Figure 5 (the non-system) are the factors creating the problem. It is not surprising, the reader might think, that some returns on invested capital are so low.

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Method Any framework designed to measure the performance of different kinds of production systems has to be based upon an adequate description of each different system and has to embrace at least its important characteristics, system by system. A basic problem for research workers wishing to contribute to the development of such a framework is the absence of production system definition and the consequent absence of statements indicating the primary and secondary characteristics of each kind of system. The writer has attempted to measure system performance, not engage in system design. It is expected that, through distinguishing between different production systems, the observation of common ratios associated with each different production system could be a useful determinant for other researchers seeking to improve production system design. The criterion of rate of return on investment is well-known. However, vital factors when attempting to measure return on investment are the definitions of both the return and the investment. The concept of the production system implies that there are inputs, transformation and outputs. The rate of flow from inputs to outputs is clearly the rate of flow of material only through the system. The result of the manufacturing process of every production system is to add cost or value to the material flowing through the system. This added cost results from the operations (work tasks) carried out on the material as itflows.At the point of completion, the products are sold or stored for future sale. The revenue of sales is needed to acquire new resources as inputs for the production system. In order to realise its objective every production system has to invest fixed capital in machines, equipment, jigs, fixtures and tools to provide the resources for transformation. A well-trained and loyal personnel is another asset within the system. However, changes in the production system's human assets should be taken into account as well as the wages and bonuses[15]. The working capital of the production system is concentrated in the constituent parts of products being manufactured. Overheads are incurred to complete the production process. The manufacturing process adds costs. It is hoped it will also add value. Whether it does or not depends on consumers. Figure 7 shows the elements and characteristics of a production system within the framework of systems theory. One of the common ratios that has been often re-examined in the past and is still commonly in use is, as already mentioned) return on investment. This ratio reflects not only the effectiveness of the production system but also the effect of many other factors on the firm (Figure 8). These other factors, which also share in achieving a return on investment for all resources and efforts of the firm, include marketing and financial systems. This paper aims at developing the return on investment ratio so that the ratio deals, as far as possible, with the production system only. It is hoped also to demonstrate the way in which this ratio may be modified to reflect human resources. When developing the modified ratio thefluctuationsof market price will be limited by using one of the usual pricing policies such as standard cost-plus. The

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INPUTS: Raw materials Bought-out items RESOURCES: Machines and equipment (fixed capital) Workforce (depreciation of human assets and expenses) Constituent parts of products (working capital) Other overheads (cost of power, maintenance, heating, etc.) BASIC REQUIREMENTS: Market demand (change in quantities and variety) and information OUTPUTS: Finished products or complete components or set of components

application of this ratio with respect to individual production systems will enable inter-system comparisons to be made. The results of these comparisons may provide a useful and reliable yardstick of production system efficiency. Since this ratio will ignore the effect of fluctuation in market price, any improvement in the manufacturing profit will indicate either that manufacturing cost has been reduced or that fixed, working, and human capital has been worked harder. For the purposes of this research it was of paramount importance that practical data be accumulated by an extensive field research within firms having different production systems. The companies visited had to reflect the basic production systems found in the multi-product engineering industry, i.e. (a) examples of functional layout-based systems, (b) examples of plant dominated systems, (c) examples of group manufacturing such as Ferranti Ltd., Platt International, Whittaker-Hall Ltd. and Trantor Ltd., (d) examples of group assembly such as Friedland Ltd., Philips of Holland, Volvo of Sweden, and again Trantor Ltd. Reference was also made to published information concerning the automobile and home domestic industries as examples of assembly line systems. The writer acquired the data from several firms, generally from the production and cost accounting information systems existing in thosefirms.Some estimated data are necessary for the calculation of the ratios as it is clear that, for the purpose of this research, the traditional accounting information systems will not be sufficient.

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Using Management Ratiosas a yardstickfor measuring and comparing the performance of various production systems A production system is a group of resources allocated in such a way as to produce a complete component or set of components (Figure 7) or afinishedproduct to meet a specific demand. The amount of resources allocated will change to suit changes in demand. The resources are: (1) machines, (2) human resources (workforce), and (3) constituent parts of products (materials, components, assemblies) and the expenses of management (control and policy) which can broadly be called the overheads of the production system. Figure 9 shows the elements and characteristics of the production system in the firm. Figure 9. The Elements and Characteristics of the Production System in the Firm

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The success of the production system to manufacture the required product or component in the correct order depends on the efficient control of the various resources. It is clear that some of the factors affecting the end results of the production system are controlled by top management (Figure 9the policy and the strategy of the firm). In the preliminary stages of this study, the resources involved in the production system will be determined partly by the speed of flow, and partly by the costs incurred in utilising the resources of the production system. "Flow", for the purpose of this study, is the flow of funds relating to the actual physical operation of the production system which, in turn, can be considered to be the flow of raw materials and components from inputs, through transformation, to outputs. Although existing well-used management ratios are quite adequate for the measurement of material flow and the measurement of efficiency of the use of resources in a firm in general terms, the writer believes that further refinements are necessary in order to clarify the effects of policy and all other external factors influencing the measurement of the performance of the production system. By using a series of refined ratios, developed during this research, it is possible to obtain more accurate comparisons of one production system compared to another. Management ratios, refined or otherwise, can however only provide a certain amount of detail and for further information regarding, for example, the causes of favourable or unfavourable variances, budgetary control techniques have also to be utilised. An article to appear in a future issue of this journal will consider the use of budgetary control in the measurement of the performance of production systems. Primary and Secondary Ratios Primary and secondary ratios that ignore policy effects have been developed by the author so that the efficiency of the production system alone can be measured. Hence, the framework shown in Figure 8 is an improved version of the regular return-oninvestment ratio themes[16]. This framework has been developed so as to be applicable to any kind of production system and has three primary ratiosoperating profit as a percentage of output, investment turnover, and return on investment. (1) The ratio: reflects the efficiency of the production system in

creating profit during a period of time. (2) The ratio: indicates turnover of the production resources in a period

of time relative to output produced. It is clear that the combination of these two ratios produces the third ratio: The calculations of these ratios over a time series allows the monitoring of the efficiency of the production system. The higher the ratios the more efficient is the production system. In order to avoid the problems and biases usually associated with

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the conventional return-on-investment ratio and its constituents, usually called a pyramid of ratios, improvements have been made as described below. (1) In the "refined" ratios, the profit factor refers to operating profit instead of net earnings. Output replaces the customary sales figure found in conventional ratio analysis. The traditional measure of profit is the result of subtracting actual cost of sales from sales revenue to yield net earnings. However, the sales revenue does not reflect the efficiency of the production system and is influenced by market factors. Since revenues are not normally influenced by manufacturing processes, control in manufacturing is essentially cost control. By using the standard cost-plus method in pricing the output of the production system, any improvement in operating profit indicates that the cost in proportion to investment or output is being reduced. Standard cost-plus is a pricing method which takes into account the variable costmaterials, bought-out components, direct labour costs and other direct overheads which are easily allocated in the production system. Management policy dictates some percentage as a proportion of this standard cost to cover other indirect overheads and a mark-up for profit. Therefore, the standard cost-plus method provides the value of the production system's output. For the purpose of this paper, operating profit means the profit expected from operating the production system. As mentioned before, it is the proportion that has been added to the variable manufacturing standard cost of the production system for the predicted period of production. But the actual activity levels carried out during the manufacturing process will cause some change to value of this proportion. Thereby, the operating profit is derived from the difference between the standard cost-plus, as projected by management policy, and the actual cost of production. The operating profit can also be expressed by the following formulae: operating profit = standard cost-plus actual cost where standard cost-plus = (direct material + direct labour + direct overhead) + indirect overhead + mark-up for profit indirect overhead = Y % x (direct material + direct labour + direct overhead) mark-up for profit = Z% x (direct material + direct labour + direct overhead). If the production system is responsible only for the used quantities resources, the actual cost of these resources should be stated entirely in terms of standard unit prices multiplied by the actual quantities. Operating profit will therefore be used as a means of measuring performance. Although much work has been done with mathematical programming to develop a transfer pricing system for commodities which are produced

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internally within a production system, this approach may not prove to be the best single criterion for measuring operating profit[17]. The use of transfer prices is normally reserved for transactions between centres with the same degree of autonomy, such as different divisions in a divisionalised firm. It is well known that operation of an optimal transfer price system to govern such transactions is subject to certain limitations. (a) It may only be possible to operate it by taking away some of the autonomy of divisions. Therefore an optimal transfer pricing system may result in less decentralisation. (b) Such a system is, of course, only worth considering if the expected benefits from using it outweigh the cost of operating it. (2) The use of the standard cost-plus method ignores all fixed costs. It does, however, account for all direct costs as well as some of the indirect variable overheads. The reason for ignoring the fixed costs and the remainder of the indirect variable overheads is that these costs are usually only allocated arbitrarily. Furthermore, there is no specific relationship between these costs and the efficiency of the production system operating within a firm. (3) In spite of the vital importance of human resources to a business, their value is continually ignored by the accountant. The value of these resources as a dominant asset of the production system is rarely given consideration in the records. In research currently being undertaken, human resources are considered as an asset. Their value is based on estimated cost of replacement. This includes the costs of recruiting, training and the familiarising of workers with the production system. The cost of depreciation in terms of expected life within the production system is also calculated. The costs of maintaining and developing the workforce are not seen only as a current expense. Although Likert[18] and his associates believe that the behavioural conditions surrounding the production systemmotivation, loyalty and group cohesiondetermine the productive capacity and should be taken into account when evaluating human resources, there is empirical evidenced[9] that suggests that this does not provide a reliable basis upon which accountants can base their measurements. The author has indeed found this to be the case. (4) Inflation problems have been dealt with in this framework by changing the depreciated book value of fixed assets within the production system to estimated replacement value. All fixed assets are valued at their current estimated economic value. This is normally the replacement value minus the accumulated depreciation. The accumulated depreciation is calculated as a proportion of the replacement value based on the life of the assets. Any obsolete or idle assets are valued at their worth to the organisation, a valuation which may not appeal equally to accountants and production managers. However, this approach is an acceptable way of avoiding the non-existence of

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the replacement value. The cost of revenue expenditures, such as material and bought-out components, labour cost and electricity, are already influenced by the existing rate of inflation. The principal advantage of the above primary ratios is the comprehensive treatment of all the interacting factors within production systems. Secondary ratios deal with each element of production systems and are listed below along with the elements themselves. Each group of ratios reflects elements of the production system, and can be combined with the primary ratios to give a more comprehensive picture of the whole system. (1) Inputs Every production system deals with materialflowfrom one end of a system, as input, to the other end of the system, as output, during which time all operations will be performed. The inputs to various systems may include one or more of the following: raw material, bought-out components, or semi-finished components, which could be the output from another production system. To measure the efficiency of the production system it is important to guarantee a regular flow of materials into the system. The following ratio measures the reliability of suppliers. These can be either external or internal suppliers, i.e. raw material stores or other production systems. The value of orders overdue from suppliers The value of the average daily purchases or the average of the daily output of other internal production systems. This ratio helps to determine the responsibility for any delays which occur in the production system due to an absence of materials. The quality of the inputs to the production system is measured by the ratio: The value of the orders returned by the production system The value of all the orders issued by the production system To emphasise the importance of materials in the great majority of industries, the following ratio indicates the material cost as a proportion of the output of the production system: The direct material cost The output An improving yield of the productivity of materials increases the efficiency of the production system by ensuring that more output is achieved from the same quantity of materials. This relationship can be measured by the ratio: The value or the quantity of the output of the production system The material cost or the quantities of material For more precisefiguresit is necessary to relate the quantity of output to the particular materials used in the production system.

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(2) Machines, equipment, tools and other production facilities All production facilities should be used effectively. There are two ratios worth examining here. The first is:

This ratio declares the value of production facilities per 100 of output per period of time. It is possible to apply this same ratio to eachfixedasset on an individual basis. The second ratio deals with capacity utilisation. However, since capacity has many varied definitions, there are similar variations in the expression of this ratio. These variations also differ according to each different production system. For the more commonly used production system this ratio can be expressed as below. (a) (b) Functional layout system capacity utilisation = Flow-line system capacity utilisation (c)i. =

Plant dominated system (labour intensive) capacity utilisation =

(c)ii. Plant dominated system (machine or capital intensive) capacity utilisation = (d) Group manufacturing system capacity utilisation = family of components for which the cell was designed, per period of time (e) Group assembly system capacity utilisation =

(3) Workforce or internal human resources The ratios which could be used to monitor the performance of employees within the production system are as follows:

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Employee performance (per employee)

Employee performance = (per cost) These two ratios indicate the yield per employee or the yield per cost of labour in the production system. The higher these ratios the more efficient is the use of the internal human resources. For a comparative study of various production systems the following ratios are suggested:

This ratio avoids the effect of material cost and expresses all other factors of value added in terms of money. The impact of the surrounding production system, including for instance inflation and economic crises, is similarly avoided because they have been taken into account in both the numerator and denominator of the ratio. It is important to measure the influences of industrial relations and organisational behaviour on the workforce. In this case, the turnover of employees should be a helpful indicator and can be expressed thus:

The real significance of this ratio is found in terms of the money saved or expended for each per cent reduction or increase in the rate of turnover[20]. For a wide sensitive measure of the state of industrial relations surrounding the production system the following ratio may be useful:

(4) Constituent parts of the products Work-in-progress consists of most constituent parts of the products. The importance of considering all these constituents stems from the amount of funds invested in work-in-progress and the time needed to achieve throughput. This latter factor of throughput time requires careful control since the output of one production system can form the input to others. Thus, any deviation in the throughput time in one system can have adverse effects on other dependent systems. The work-in-progress viewed as the production system's working capital, raises the cash cost for the production system in terms of the rate of interest charged on this working capital. Clearly in order to minimise this interest charge and to cut cash flow requirements, the throughput time should be kept as short as possible.

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There arc two ratios which express the relationship between work-in-progress and output. The first is:

This ratio expresses the value of work-in-progress as a proportion of the output for a period of time. The lower this ratio the more efficient is the production system. The second ratio is:

This ratio indicates the throughput time for the production system under consideration. One of the elements of a comparative study of various production systems would be the cost of the cash invested in work-in-progress for the period of throughput time. (5) Market Demand Any production system should respond to changes in market demand. Such changes could be in terms of quantity of existing products or in terms of the product range and variety. Therefore, it is worthwhile to measure the effects of changes in market demand on the production system and to investigate the reaction of the production system to these changes. An approximate ratio which shows the reaction of the production system is as follows:

Changes in this ratio will express the ability of the production system to respond to changes in market demand if all other external resourcessuch as electricity, fuel and raw material suppliesand all other external influences, such as labour disputes, remain constant. Furthermore, since the production system can also change in response to internal factors such as changes in materials, workforce, machine technology and component flow, these factors must also be compensated for. Increased efficiency of the production system to meet changes in market demand will be indicated by a decrease in the ratio. The converse applies to increased inefficiency. (6) Outputs The value of finished goods or finished components reflects the culmination of the efforts of various production resources within the system. The success of the production system in terms of performance during a period of time can be expressed by the following ratio:

where the maximum will be taken as the historical maximum in the previous periods.

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This ratio could be helpful in indicating the capacity utilisation of all resources in the production system. To measure the quality of output, the following ratio may help: The value of finished product or component rejected by inspection per period of

A tendency for this ratio to rise is a warning of decrease in efficiency, the reasons for which should be investigated in more detail. As a final comment, the writer believes that the number of primary and secondary ratios should be kept to a minimum in order to eliminate confusion when using the ratios to measure the efficiency of the production system or when conducting a comparative performance study of various production systems.
Acknowledgment The author expresses his thanks for helpful comments from L. R. Amey, Professor of Accounting, McGill University; K. G. Lockyer, Professor of Operations Management, University of Bradford; and G. A. B. Edwards, Senior Lecturer in Production Management, University of Bradford. References 1. Edwards, G. A. B., "Group Technology: A Bridge Between Accountant and Engineer", Management Accounting, February 1971. 2. Edwards, G. A. B., Variety Compendium, Uni\ersity of Bradford Management Centre, 1975. 3. Champion, J., Planning and Control of the Production System in the Process Industries, M.Sc. Thesis, Department of Management Sciences, UMIST, 1973. 4. Edwards, G. A. B., "Group TechnologyA Technical Answer to a Social Problem", Personnel Management, March 1974. 5. Fatheldin, A. T., Family FormationA New Technique as a Basis for Variety Control and Group Technology, M.Sc. Thesis, Department of Management Sciences, UMIST, 1966. 6. Furlonger, J. C., The Implications of Product Policy upon the Total Management Functions of an Organisation Manufacturing a Variety of Products in a Process Industry, M.Sc. Thesis, Department of Management Sciences, UMIST, 1969. 7. Edwards, G. A. B., and Schmitt, J. P., "ManufacturingNot So Much Technology, More a Way of Life", Personnel Review, Spring 1973. 8. Edwards, G. A. B., "Production Management in Transition", Management Education and Development, February 1971. 9. The Centre for Interfirm Comparison, Interfirm Comparison in Depth, 1974. 10. Hofstede, G. H., The Game of Budget Control, Tavistock, London: 1968. 11. Caplan, E. H., Management Accounting and Behavioural Science, Addison-Wesley, Massachusetts, 1971. 12. Solomons, D., Divisional Performance: Measurement and Control, Irwin, Homewood, Illinois: 1965. 13. McNally, G. M., "Profit Centres and Transfer PricesAre They Necessary?", Accounting and Business Research, Winter, 1973. 14. Samuels, J. M., "Opportunity Costing: An Application of Mathematical Programming", in D. Solomons (ed.) Studies in Cost Analysis, Sweet and Maxwell, London: 1968. 15. Brummet, R. L., Pyle, W. C., and Flamholtz, E. G., "Human Resource Accounting in Industry", Personnel Administration, July/August 1969. 16. Kline, C. A., Jr., and Hessler, H. L., "The DuPont Chart System for Appraising Operating Performance", in W. E. Thomas (ed.) Readings in Cost Accounting, Budgeting and Control, Southwestern Publishing Co., 1960.

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17. Abdel-Kalik, A. R., and Lusk, E. J., "Transfer PricingA Synthesis", The Accounting Review, January 1974. 18. Likert, R., and Pyle, W. C., "Human Resource AccountingA Human Organisational Measurement Approach", Financial Analysts Journal, January/February 1971. 19. Dermer, J., and Siegel, J. P., "The Role of Behavioural Measures in Accounting for Human Resources", The Accounting Review, January 1974. 20. Norstedt, J-P., and Auguren, S., The Saab-ScaniaReport, The Swedish Employers' Confederation, Technical Department, Stockholm, 1973.