Question

As a management accountant, what recommendations are you going to give to the senior management team to manage and reduce cost?

Answer 1

Recommendation for manage or reduce cost.

1) Production or Outsourcing decision : Prepare a forecast analysis of production cost and compare it with outsourcing the process . Select the one which is less expensive, but without compromising the quality.

2) Relationship with customers : A good relation with the supplier can bring you good amount of discount and there by reduction in cost.

3) Inventory handling : Implement Just in Time production process so that inventory handling cost get reduced.

4) Improve the quality of products : By improving the quality of the products the further repairs or replacement expenses from the customers can be minimized.

5) Eliminate unprofitable clients : For some clients the company may incur cost like delivery charges, inventory handling etc, but the profits from these kind of customers will not cover these cost. So the company should eliminate them.

6) Reducing the idle time of workers.