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Cost Reduction
Cost reduction is the process used by organisations aiming to reduce their costs and increase their profits, or to accommodate reduced income. Depending on a company’s services or products, the strategies can vary. Every decision in the product development process affects cost: design is typically considered to account for 70–80% of the final cost of a project such as an engineering project or the construction of a building. In the public sector, cost reduction programs can be used where income is reduced or to reduce debt levels. Importance Companies typically launch a new product without focusing too much on cost. Cost becomes more important when competition increases and PRICE becomes a differentiator in the market. The importance of cost reduction in relation to other strategic business goals is often debated. Examples of cost reduction strategies and programmes Commercial businesses Consultants Deloitte reported in 2006 that over three-quarters of the FTSE 100 listed ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cost
Cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost. In this case, money is the input that is gone in order to acquire the thing. This acquisition cost may be the sum of the cost of production as incurred by the original producer, and further costs of transaction as incurred by the acquirer over and above the price paid to the producer. Usually, the price also includes a mark-up for profit over the cost of production. More generalized in the field of economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ..., cost is a metric that is totaling up as a result of a process ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Function Cost Analysis
Function cost analysis (FСА) (sometimes called function value analysis (FVA)) is a method of technical and economic research of the systems for purpose to optimize a parity between system's (as product or service) consumer functions or properties (also known as value) and expenses to achieve those functions or properties. History This methodology for continuous perfection of production, industrial technologies, organizational structures was developed by Juryj Sobolev (Соболев, Юрий Михайлович) (Russia) in 1948 at the "Perm telephone factory" (Almost at the same time as L. D. Miles ). * 1948 Juryj Sobolev (Соболев, Юрий Михайлович) (Russia) - the first success in application of a method analysis at the "Perm telephone factory" ( Perm, Russia). * 1949 - the first application for the invention as result of use of the new method. Today in economically developed countries practically each enterprise or the company use methodology of the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Land Tenure
In Common law#History, common law systems, land tenure, from the French verb "" means "to hold", is the legal regime in which land "owned" by an individual is possessed by someone else who is said to "hold" the land, based on an agreement between both individuals. It determines who can use land, for how long and under what conditions. Tenure may be based both on official laws and policies, and on informal local customs (insofar higher law does allow that). In other words, land tenure implies a system according to which land is held by an individual or the actual farmer, tiller of the land but this person does not have legal ownership. It determines the holder's rights and responsibilities in connection with their holding. The sovereign monarch, known in England as the Crown, held land in its own right. All land holders are either its tenants or sub-tenants. ''Tenure'' signifies a legal relationship between tenant and lord, arranging the duties and rights of tenant and lord in r ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Design To Cost
Design-to-Cost (DTC), as part of cost management techniques, describes a systematic approach to controlling the costs of product development and manufacturing. The basic idea is that costs are designed "into the product", even from the earliest concept decisions on and are difficult to remove later. These costs are seen as an equally important parameter besides feature scope and schedule, the three taken together yielding the well-known project triangle. By taking the right design decisions as early as during the initiation and concept phase of the product life-cycle, unnecessary costs at later stages can be avoided. But DTC also tries to capture the necessary measures for cost control during the complete development cycle. In DTC, cost considerations also become part of extended requirements specifications.http://www.cs.odu.edu/~mln/ltrs-pdfs/iaa-ceso-11-90.pdf In contrast to the closely related target costing, DTC does not mean a product will exactly reach a defined cost, ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Benchmarking
Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies. Dimensions typically measured are Project management triangle, quality, time and cost. Benchmarking is used to measure performance using a specific Performance indicator, indicator (cost per unit of measure, productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure) resulting in a metric of performance that is then compared to others. Also referred to as "best practice benchmarking" or "process benchmarking", this process is used in management in which organizations evaluate various aspects of their processes in relation to best-practice companies' processes, usually within a peer group defined for the purposes of comparison. This then allows organizations to develop plans on how to make improvements or adapt specific best practices, usually with the aim of increasing some aspect of performance. B ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Manufacturing
Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of the secondary sector of the economy. The term may refer to a range of human activity, from handicraft to high-tech, but it is most commonly applied to industrial design, in which raw materials from the primary sector are transformed into finished goods on a large scale. Such goods may be sold to other manufacturers for the production of other more complex products (such as aircraft, household appliances, furniture, sports equipment or automobiles), or distributed via the tertiary industry to end users and consumers (usually through wholesalers, who in turn sell to retailers, who then sell them to individual customers). Manufacturing engineering is the field of engineering that designs and optimizes the manufacturing process, or the steps through which raw materials are transformed i ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Overheads
In business, an overhead or overhead expense is an ongoing expense of operating a business. Overheads are the expenditure which cannot be conveniently traced to or identified with any particular revenue unit, unlike operating expenses such as raw material and labor. Overheads cannot be immediately associated with the products or services being offered, and so do not directly generate profits. However, they are still vital to business operations as they provide critical support for the business to carry out profit making activities. One example would be the rent for a factory, which allows workers to manufacture products which can then be sold for a profit. Such expenses are incurred for output generally and not for particular work order; e.g., wages paid to watch and ward staff, heating and lighting expenses of factory, etc. Overheads are an important cost element, alongside direct materials and direct labor. Overheads are often related to accounting concepts such as fixed costs an ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Activity-based Costing
Activity-based costing (ABC) is a costing method that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each. Therefore, this model assigns more indirect costs ( overhead) into direct costs compared to conventional costing. The UK's Chartered Institute of Management Accountants (CIMA), defines ABC as an approach to the costing and monitoring of activities which involves tracing resource consumption and costing final outputs. Resources are assigned to activities, and activities to cost objects based on consumption estimates. The latter utilize cost drivers to attach activity costs to outputs. The Institute of Cost Accountants of India says, ABC systems calculate the costs of individual activities and assign costs to cost objects such as products and services on the basis of the activities undertaken to produce each product or services. It accurately identifies sources of profit and ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cost Driver
A cost driver is a structural factor which determines the cost of an activity or a change in its cost. The Chartered Institute of Management Accountants defines a cost driver as: although a different meaning is assigned to the term by the business writer Michael Porter, who states: Approaches Porter's approach defines a "cost driver" not just as a simple ''variable in a function'', but as something that ''changes the function'' itself. For example, the driver "economy of scale" leads to different costs per unit for different scales of operation (a small cargo vessel is more expensive per unit than a large bulk carrier), and the driver "capacity utilisation" leads to greater costs per unit if the capacity is under-utilised and lower costs per unit is the utilisation is high. In general, the cost driver for short term indirect variable costs may be the volume of output/activity; but for long term indirect variable costs, the cost drivers will not be related to volume of output/acti ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Reverse Costing
Reverse costing describes the process of disassembling (reverse engineering) a device to identify manufacturing technology and calculate its manufacturing cost Manufacturing cost is the sum of costs of all resources consumed in the process of making a product. The manufacturing cost is classified into three categories: direct materials cost, direct labor cost and manufacturing overhead. It is a factor ...s through a cost analysis of its parts and the effort required to assemble them. References Costs {{econ-stub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Design For Assembly
Design for assembly (DFA) is a process by which products are designed with ease of assembly in mind. If a product contains fewer parts it will take less time to assemble, thereby reducing assembly costs. In addition, if the parts are provided with features which make it easier to grasp, move, orient and insert them, this will also reduce assembly time and assembly costs. The reduction of the number of parts in an assembly has the added benefit of generally reducing the total cost of parts in the assembly. This is usually where the major cost benefits of the application of design for assembly occur. Approaches Design for assembly can take different forms. In the 1960s and 1970s various rules and recommendations were proposed in order to help designers consider assembly problems during the design process. Many of these rules and recommendations were presented together with practical examples showing how assembly difficulty could be improved. However, it was not until the 1970s that n ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
