Kaizen Costing

• A situation where a reduction in production will result in less overhead allocated to the respective product

While undergoing transformation, various factors have and are still accelerating metamorphic process of the company (Victoria Times Colonist, 2010). Need for improved efficiency is one of the factors that have accelerated change within the firm. Company’s efficiency determines how fast production process is. Efficient company not only improves quality of its products but also is important in quality of services delivery. Effectiveness of labor in a company also constitutes

This may be overcome through supervision and better training to the lower skills employees. By implement these alternatives, material price can be controlled and reduced in future purchases and direct labour costs can be reduced by employed cheaper labour and provide better training to improve their work skills in order to efficient souring of materials and reduced hours per order

| Maintaining high quality also keeps costs down to help improve cash flow and keep overhead cost to a minimum.

In accomplishing this, the JIT lean production process will minimize use of facility space, materials and supplies, stocks, labor, capital and time. This, in turn, will reduce costs by increasing production efficiency and overall output.

Toyota was thought to be the best quality car in the 1970s and 1980s but, due to Japanese competition, American car manufactures soon began to close the rankings gap. At the top of their game in 2010, Toyota had to stop manufacturing and order a large recall of automobiles. While leadership was probably considered great at the height of Toyota’s success, changes were obviously needed during the recall period and management needed to be as adaptable to those changing conditions. The only thing regarded as permanent in a market economy is change

As time progress every business can find ways to be more efficient and effective. This can be achieved by analyzing each step of the process and find ways to eliminate "waste". "Waste" can be define here as variables of but limited to time, raw materials, employees, steps in the process, and or

The manufacturing cost can be lower as the rearrangement of the production line to meet urgent order can be minimize or even eliminated.

More efficient product and logistics by having to put a good deal of time and effort into making the production and logistics more efficient by reducing the number of production platforms, increasing productivity, reducing inventory levels and increasing delivery

Alternative 2- Reduce Operating Cost- 1. They can reduce operating cost by embracing technology they should consider to automate their accounting, payroll, and marketing system.2. Outsource advertisement and marketing system to outside consultants to increase ROI 3.They should find available options to buy cleaning products. Evaluation price and buy from most affordable option 4.They should pay invoices to vendor early on time to avoid late fees.5. They should identify inefficiencies in their company to decrease cost. 7.They can save cost by canceling unused service for example international call service.8. They should consider the option to use green products as they are cost-effective and help to goodwill.

Eliyahu M Goldratt purpose of writing this book is to introduce individuals to how to manage and measure effectively. Goldratt illustrates how the accounting cost figures and productivity per machine can actually be problematic for it misleads individuals into thinking they’re achieving the goal. Rather all attention should be focused on strategy planning and managing the bottlenecks because they are the true driving metric of production. One major takeaway message from this novel is that there is always room for improvement. This philosophy of ongoing improvement originated in a Toyotas production system and is better know as the Kaizen theory. The Novel, stresses the Kaizen theory, which starts with an indication, then an in-depth analysis, followed by a diagnosis, eventually arrive ate a hypothesis and ending with

found out that despite this cost reduction in material cost, the costs of producing the low -end units for

Therefore the purchasing department will be able to reduce the cost to more efficient and effective process and it will be able to deliver better process.

Process costing is consisting of three ingredients which are direct materials, direct labor and manufacturing overhead. Direct material is the raw material which needs to produce a product, for example rubber for shoes, plastics for straws and etc. direct labor is a person who work and complete the product before it is completely produce. And manufacturing over head is about the indirect materials, indirect labor, and some indirect related to the factory.

Producing to cost: Businesses like WH Smith must also ensure that they are able to save unnecessary costs but making use of their resources in producing the final goods. This allows them to save money and control their expenditure and make better use of it. This also gives the business the opportunity to maximise profit.