Accounting Information Systems: The Processes and Controls, 2nd Edition

COMPONENTS OF THE LOGISTICS FUNCTION (STUDY OBJECTIVE 2)

The major function within the conversion process is the logistics function. Logistics is the logical, systematic flow of resources throughout the organization. It involves the well-planned and coordinated efforts of many departments. Its goal is to make the most efficient use of the resources available in order to support the organization.

The logistics function has three primary components: planning, resource management, and operations. Exhibit 11-3 presents these components and their subcomponents.

PLANNING

The planning component of the logistics function directs the focus of operations. It is concerned with determining what products should be produced, how many products should be produced, what resources should be available, and what timing is needed. It is supported by the efforts of research and development, capital budgeting, engineering, and scheduling.

Exhibit 11-3 Components of the Logistics Function

Research and development focuses on product improvement. Its efforts involve investigating and developing new, innovative products and methods of producing those products. The research and development department may also conduct studies to determine which parts should be manufactured and which will be purchased, considering the most efficient manner of conducting operations. This department is also responsible for researching ...