Better Business Decisions Using Cost Modeling

person icon Business Expert Press

Better Business Decisions Using Cost Modeling

For Procurement, Operations, and Supply Chain Professionals


This eBook includes

Formats : PDF (Read Only)

Pages : 159

ISBN : 9781606492666

Language : English

About the Book

Book description

Information is power in supply chain operations, negotiations, continuous improvement programs, and process improvement, and indeed in all aspects of managing an operation.  Accurate and timely information can result in better decisions that translate into improvement of bottom line results.  The development and effective use of cost modeling as a method to understand the cost of products, services, and processes can help drive improvements in the quality and timeliness of decision making.  In the supply chain community an understanding of the actual cost structures of products and services, whether with new or non-partner suppliers, can facilitate fact-based discussions which are more likely to result in agreements that are competitively priced and with fair margins.  Further, accurate cost models which are cooperatively developed between supply chain partners can form the basis for joint efforts to reduce non-value-added costs and provide additional focus towards operational improvement.   While many organizations feel confident they have an understanding of the cost structure for products and services produced internally, cost modeling often uncovers areas where significant cost improvement can be obtained.  Cost of quality is a particular type of internal cost model that analyzes the true costs associated with the production of less than perfect products and services.  The development of a cost of quality model can provide insight into how products or services of higher quality can be produced at lower cost.  This book provides the business student or professional a concise guide to the creation and effective use of both internal and external cost models.  Development of internal cost models is discussed with illustrations showing how they can be deployed to assist in new product development, pricing decisions, make-or-buy decisions and the identification of opportunities for internal process improvement projects.  The creation and use of external cost models are discussed providing insight into how their use can drive collaborative improvement efforts among supply chain partners, better prepare for price negotiations, and keep negotiations focused on facts rather than emotions--all while allowing for future discussions with preferred suppliers to focus on more strategic and operational improvement initiatives, and less on pricing.  A number of detailed cost model examples are provided to educate on both how cost models are constructed, and to demonstrate how they have been effectively deployed

Better Business Decisions Using Cost Modeling

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Business Expert Press

Since 2008, Business Expert Press has been providing business students and professionals with precise, business information written by experts in their fields. Available in both print and eBook formats, our books can be obtained by consumers through a variety of sources including direct purchase on our website and major online bookstores. Business librarians can purchase our entire Digital Library, published and updated annually, in total, or in various configurations such as topical e-collections or custom bundles, through perpetual access or subscription.


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