Application of material flow cost accounting for waste reduction in dried mango production

Abstract

Application of Material Flow Cost Accounting (MFCA) is a technique that can help to reduce loss in production of dried mango with less sugar added. The result of MFCA analysis showed that the highest portion cost of negative product was identified as material cost as 1.55% from the total product cost. The improvement solution was proposed for waste cost reduction by using cause and effect diagram to identify root cause of waste cost. Consequently, the main cause of waste cost was identified as inappropriate method of laying mango on the tray. Then work standard procedures were proposed for workers to reduce the number of mango defects. After implementation, the cost of negative product was decreased to 1.00% from the total product cost. To conclude, the improved work standard procedure had led to the reduction of material cost approximately 4,395 Baht per production cycle or 421,920 Baht per year.