Effectiveness of MFCA as a tool to improving sucrose quality in sugarcane production
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DOIhttp://dx.doi.org/10.21511/ee.08(3-1).2017.02
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Article InfoVolume 8 2017, Issue #3, pp. 102-110
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Sugarcane production in South Africa is one of the major foreign exchange earnings, and constitute an important contributor to GDP growth of South Africa. It is argued that sucrose content, one of the significant components of sugarcane has been at the declining trend in the recent years. This study offers Material Flow Cost Accounting (MFCA) as an important tool, since it supports managerial decision making process by making it possible to visualize and quantify material losses. The study hypothesis is that can MFCA as tool increase organizational profitability. The study adopts models from literature to access the efficiency of MFCA as an important alternatives to the conventional accounting process. In this study, production cost has been classified into four categories, namely: system cost, energy cost, material flow cost and residual cost. Accessing the efficiency of this accounting skill, data from South African Sugarcane Milling industry has been adopted to establish our claim in the study and finally, this study has been able to implement the process involved in the use of MFCA. We, therefore, recommend the proficient use of MFCA in organizations among the South African industries as it possess the quality of classifying product cost from waste cost and hence improving profitability and organizational efficiency.
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JEL Classification (Paper profile tab)031, Q00
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References11
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Tables2
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Figures7
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- Fig. 1. Indicates the declining trend in the large-scale production of sugarcane production and particularly sucrose yields
- Fig. 2. Classification of production process
- Fig.3. A simple material flow is modelled in
- Fig. 4. The role of MFCA in an organization
- Fig. 5. Existing MFCA Framework
- Fig. 6. Adjusted MFCA framework for improved process waste-reduction decisions
- Fig. 7. Process flow diagram of sugar industry
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- Table 1. Hypothetical expression of MFCA approach
- Table 2. Cost Report from South Milling Industry For the year 2015/2016 and 2016/2017 respectively
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