Project Report on Cost Reduction and Control

company’s finished goods inventory has shot up to a 60 days supply – twice the normal level. In addition,

While we are performing our analysis on different aspects of the company, we look at the three main types of cost. When we remain devoted to improving our costs, and the faults related, we show our same devotion to our consumers. This is portrayed by the quality of products we put on the shelves. Prevention costs, appraisal costs and Failure costs are areas

Local procurement of materials provides an ease in production at the plant in Hangzhou. Costs are one area that attention is paid so that they can be kept within reason ensuring an affordable product. Throughout the process careful negotiations must be done to ensure there are adequate materials as well as manpower to fulfill the orders that have been placed by customers. The plant has the ability to produce a large amount of stock fans as well as special order merchandise. With specialty orders the process for procurement shift slightly because of the unique nature of the order and the variety of materials that may be used as well. With the procurement of the polymer done locally this also expedites the production process simply because logistics will not be an issue. The necessary machinery for manufacturing is onsite for quick manufacturing times that can quickly move into the production lines for assembly. Assembly leads way into storage for sales. Orders can be filled at the plant as well as shipped directly to the buyer both within China and internationally. Depending on the final destination of the merchandise there are multiple companies that are used to ensure the fastest shipping time to the buyer.

We had to send to the suppliers the files of the quantities and the details for the work we want from them to do it through website “wetransfer.com” because the size of file is so big and we can’t send it through h email.

Any off-spec raw materials - Returning off-spec raw materials to the vendors would save costs on disposal. TBCI suggests that Riordan work with their vendors on quality to ensure raw materials are of the quality needed for their products. If the vendor does not respond, other vendors should be procured.

Adriana Company is highly automated and uses computers to control manufacturing operations. The company uses a job-order costing system and applies manufacturing overhead cost to products on the basis of computer-hours. The following estimates were used in preparing the predetermined overhead rate at the beginning of the year:

Back to speed in production and an efficient operational system and sudden increase change in demand, production requires enough space to store bulk raw materials and a

Appropriate purchases have been made. This will ensure availability of the materials to ensure smooth operation of programme progress.

1. Material Master contains descriptions of all materials that an enterprise procures, produces, keeps in stock and sell; it is the basic building block of all supply chain management activity and also the central repository of material information for the company.

Overall Theme We will explore fundamental assumptions of cost functions and discuss the relationships between cost behaviour, cost estimation and cost prediction. The concept of cost driver analysis and its application to cost estimation and cost management will also be discussed. We will also describe how to estimate cost behaviour using managerial judgment, engineering methods and other quantitative techniques.

4. Identify significant issues pertaining to materials management within the process (i.e. inventory management, supplier selection, etc.)

However, as a new member with a new product, electronic product in North American market, the reputation is also an important attribute. Especially, quick delivery time is a key attribute for this company, due to the demand of quick delivery in all markets. Moreover, the manufacturing process of the new product, electronic product, on which our company will definitely focus, has a lot demands. Such as, technology, innovation and quick delivery time even the ability to make the product be the first one appearing in the market (other company, which is developing the same product, may become our competitive opponents). Especially, technology is predicted to play the most important role in the manufacturing process. On the other hand, the traditional cost system has a lot of limitations. Traditional costing system focuses on the cost reduction and the efficiency, particular the products with relatively few standardized components; Clifton, however, produces a wide range of airplane components. In addition, nonfinancial aspects of

Under the existing cost system for the turning machine area, there are two direct costs and three cost pools for overhead costs. The two direct costs are simply Direct Labor and Direct Material, which are traced to the cost object, which is Machine Parts. The total overhead is split into three cost pools, which are the following: overhead applied on direct labor, overhead applied on material dollars, and overhead applied on ACTS machine hours. Furthermore, each cost pool is broken down into direct and period sub categories. The mentioned cost pools for the following cost drivers: Direct Labor dollars, Material dollars, and machine hours.

with a number of strategic issues facing a capital-intensive, mature industry. Their product costing system was

Under the new cost system, two broad sources of costs were identified: manufacturing and SM&A. All costs within these categories were reclassified as either volume driven or order driven. Hence, four cost pools were set up.