Beruflich Dokumente
Kultur Dokumente
Meaning
Cost Reduction may be defined as the
real and permanent reduction on the cost
of goods manufactured/sold or the
services rendered without impairing their
quality and suitability for the intended
use.
Fields Covered by Cost
Reduction
Product Design
Organisation
Factory Layout and Equipment
Production Plan, Programme and Methods
Administration
Marketing
Personnel Management
Material Control
Financial Management
Advantages of Cost Reduction
Increases profit – dividends to shareholders.
Money for labour welfare schemes.
Goods will be available at a cheaper rate.
Meets competition
Revenue to government by taxation.
Export price may be lowered.
Advantages
Costreduction is obtained by increasing
productivity.