Extra-organizational cost analysis
Article Abstract:
Extra-organizational cost analysis is an essential component of an organization's overall strategic cost management program. It allows firms to monitor their cost performance relative to that of their competitors. Extra-organizational cost analysis provides ideas that can be used by an organization to improve its efficiency and make its products more competitive. Product teardown, for instance, allows firms to disassemble and analyze products based on their materials, the way they function, the parts they use and how they are manufactured. Some firms also participate in roundtables to learn from each other by sharing information and ideas. This sharing makes firms more efficient and produce goods that are of higher quality and functionality. Other firms establish a supplier association as another form of roundtable.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1998
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Cost management beyond the boundaries of the firm
Article Abstract:
Interorganizational cost management programs permit companies to achieve lower-cost solutions through the cost reduction activities of multiple firms. These programs require suppliers to extend their cost management schemes beyond their organizations which will help firms and buyers determine alternative ways of decreasing the manufacturing costs of products. The enhanced efficiency of the supply chain resulting from cost management programs will lead to improvements in customer satisfaction. Moreover, companies can integrate total quality management and electronic data interchange technologies to achieve cost savings with their suppliers and buyers. Two cost management techniques that can also be utilized to determine required cost reduction are target and kaizen costing.
Publication Name: Management Accounting (USA)
Subject: Business, general
ISSN: 0025-1690
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
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