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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.
Direct labour and materials are relatively easy to trace directly to products, but it is more difficult to directly allocate indirect costs to products. Where products use common resources differently, some sort of weighting is needed in the cost allocation process. The cost driver is a factor that creates or drives the cost of the activity ...
A value chain is a progression of activities that a business or firm performs in order to deliver goods and services of value to an end customer.The concept comes from the field of business management and was first described by Michael Porter in his 1985 best-seller, Competitive Advantage: Creating and Sustaining Superior Performance.
Because supply chains may account for over 75% of a company's carbon footprint, many organizations are exploring ways to reduce this and thus improve their profile. For example, in July 2009, Wal-Mart announced its intentions to create a global sustainability index that would rate products according to the environmental and social impacts of ...
Low-cost country sourcing (LCCS) is procurement strategy in which a company sources materials from countries with lower labour and production costs in order to cut operating expenses. [citation needed] LCCS falls under a broad category of procurement efforts called global sourcing. The process of low-cost sourcing consists of two parties.
Dealer incentive programs are used to improve performance for dealer, resellers, channel partners and other types of brokers using sales incentive programs. These programs help companies capture market share, launch new products, reduce cost of sales and provide momentum for new launches by incenting an external party to drive additional sales.
The company has cut down on excesses at every point of production and thus are able to provide the consumers with quality products at low prices. [4] Cost leadership is different from price leadership. A company could be the lowest cost producer yet not offer the lowest-priced products or services. If so, that company would have a higher than ...
A cost centre is a department within a business to which costs can be allocated. The term includes departments which do not produce directly but they incur costs to the business, [1] when the manager and employees of the cost centre are not accountable for the profitability and investment decisions of the business but they are responsible for some of its costs.