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Definition of benchmarking

Benchmarking Image 1

benchmarking

the process of investigating how others do something better so that the investigating company can imitate,
and possibly improve upon, their techniques



Related Terms:

process benchmarking

benchmarking that focuses on practices and how the best-in-class companies achieved their results


results benchmarking

benchmarking in which an end product or service is examined; the focus is on product/service specifications and performance results


business process reengineering (BPR)

the process of combining information technology to create new and more effective
business processes to lower costs, eliminate unnecessary
work, upgrade customer service, and increase
speed to market


Corporate processing float

The time that elapses between receipt of payment from a customer and the
depositing of the customer's check in the firm's bank account; the time required to process customer
payments.


cost-benefit analysis the analytical process of comparing the

relative costs and benefits that result from a specific course
of action (such as providing information or investing in a
project)



Diffusion process

A conception of the way a stock's price changes that assumes that the price takes on all
intermediate values. dirty price. Related: full price


FIFO method (of process costing)

the method of cost assignment that computes an average cost per equivalent
unit of production for the current period; keeps beginning
inventory units and costs separate from current period production
and costs


Benchmarking Image 1

In-house processing float

Refers to the time it takes the receiver of a check to process the payment and
deposit it in a bank for collection.


Ito process

Statistical assumptions about the behavior of security prices. For
details, see the book by Hull listed in the “Bibliography”.


joint process

a manufacturing process that simultaneously
produces more than one product line
joint product one of the primary outputs of a joint process;
each joint product individually has substantial revenuegenerating
ability


modified FIFO method (of process costing)

the method of cost assignment that uses FIFO to compute a cost per
equivalent unit but, in transferring units from a department,
the costs of the beginning inventory units and the
units started and completed are combined and averaged


multiprocess handling

the ability of a worker to monitor
and operate several (or all) machines in a manufacturing
cell or perform all steps of a specific task


Price discovery process

The process of determining the prices of the assets in the marketplace through the
interactions of buyers and sellers.


Process

A series of linked activities that result in a specific objective. For example, the
payroll process requires the calculation of hours worked, multiplication by hourly
rates, and the subtraction of taxes before the final objective is reached, which is the
printing of the paycheck.


process complexity

an assessment about the number of processes through which a product flows


Process costing

A method of costing for continuous manufacture in which costs for an accounting compared are compared with production for the same period to determine a cost per unit produced.


Benchmarking Image 2

Process costing

A costing methodology that arrives at an individual product cost through the calculation of average costs for large quantities of identical products.


process costing system

a method of accumulating and assigning costs to units of production in companies producing large quantities of homogeneous products;
it accumulates costs by cost component in each production department and assigns costs to units using equivalent units of production



Process flow production

A production configuration in which products are continually
manufactured with minimal pauses or queuing.


process map

a flowchart or diagram indicating every step
that goes into making a product or providing a service


process productivity

the total units produced during a period
using value-added processing time


process quality yield

the proportion of good units that resulted from the activities expended


processing time

the actual time consumed performing the
functions necessary to manufacture a product


product- (or process-) level cost

a cost that is caused by the development, production, or acquisition of specific products or services


Purchased In-Process Research and Development

Unfinished research and development that is acquired from another firm.


Reprocessed material

Material that has been reworked and returned to stock.


statistical process control (SPC)

the use of control techniques that are based on the theory that a process has natural variations in it over time, but uncommon variations
are typically the points at which the process produces "errors", which can be defective goods or poor service


Benchmarking Image 3

strict FIFO method (of process costing)

the method of cost assignment that uses FIFO to compute a cost per equivalent unit and, in transferring units from a department, keeps the
cost of the beginning units separate from the cost of the
units started and completed during the current period



Underlying Results

Earnings after removing the effects of nonrecurring or nonoperating items.


weighted average method (of process costing)

the method of cost assignment that computes an average cost per
equivalent unit of production for all units completed during
the current period; it combines beginning inventory units
and costs with current production and costs, respectively,
to compute the average


Work-in-process

Any items being converted into finished goods or released from
the warehouse in anticipation of beginning the conversion process.


Work-in-process inventory

Inventory that has been partially converted through the
production process, but for which additional work must be completed before it can
be recorded as finished goods inventory.


budget slack

an intentional underestimation of revenues
and/or overestimation of expenses in a budgeting process
for the purpose of including deviations that are likely to
occur so that results will occur within budget limits


Budgetary control

The process of ensuring that actual financial results are in line with targets – see variance
analysis.


Feedforward

The process of determining prospectively whether strategies are likely to achieve the target
results that are consistent with organizational goals.


Outsourcing

The process of shifting a function previously performed internally
to a supplier who is responsible to the company for its ongoing operations and
results.


postinvestment audit

the process of gathering information
on the actual results of a capital project and comparing
them to the expected results



 

 

 

 

 

 

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