What are the effects of cost reduction ?
Answer -
Cost of Reduction - Cost of reduction is method to increase productivity and reduce the cost by various methods like improving technology , applying new methods .
Effects of Cost Reduction -
1. Increasing productivity - Cost reduction can help increase productivity as it encourages workers to worker more efficiently as workers work more efficiently this help further reduction in cost and increase in productivity.
2. Reduction in waste - As cost reduces the wastage of resource go down too . As more efficient method are used to utilise the resources these resources can be raw material, labor force and even time . This further increase productivity .
3. Increase revenue - As firm reduce the cost it help further increase the revenue and profit as less cost lead to better use of resource which lead to increase in revenue .
Step by step
Solved in 2 steps
