Questions you absolutely must consider include: Buy Considerations when outsourcing to reduce cost The decision to outsource a part or assembly is often based on lack of internal resources, refocus of core competencies, or cost reduction. The focus of this article is on outsourcing with the objective of lower cost. If you are attempting to outsource a part or assembly that is produced in-house based on lower cost, you must perform a thorough analysis.
The reason why the father wished to close down the branch was that it appeared to be making a loss. However, it is quite the reverse; if the branch was closed then, the positive contribution from the branch would be lost and overall profits would fall. This is because the indirect costs of production do not vary with output and, therefore, closure of a section of the firm would not lead to immediate savings.
This may mean that closing the branch would be a mistake on financial grounds. This mistake is made due to a misunderstanding of nature of cost behavior.
If the branch is closed then the only costs that would be saved are the costs directly related to the running of the branch: The costs are indirect in nature, in this example the marketing and central administration costs, would still have to be paid as they are unaffected by output.
For this decision to be made, we should use contribution as a guide for deciding whether or not to close a branch.
This can also be applied to the production of certain product lines, or the cost effectiveness of departments. On financial grounds, contribution is therefore, a better guide in making decisions.Prologic Systems (P) Limited.
Daring to Dream and then pursuing them – an innovation company @ alphabetnyc.com – Project management integration – Project scope management – Project time management – Project cost management – Project quality management – Project human resource management – Project communications management.
o How do the five major variables of project management-scope, time, cost, quality, and risk-relate to this scenario? o What considerations must be applied when selecting projects that deliver the best business value?
Budgeting may help management to explore the possibility of stretching funds from other projects. In cases of non-availability of funds, the project may have to be shelved or the scale of the project . Business Studies - BSc (Hons) Total Quality Management.
Status: O. Year: 4. This module is optional. (equivalent to Year 1 of the full-time programme) or level five (equivalent to Year 2). Exemption is granted on the basis of recent, relevant study. In essence, the job of the strategist is to understand and cope with competition. Often, however, managers define competition too narrowly, as if it occurred only among today’s direct competitors.
Strategic Leadership and Decision Making. VISION AND THE MANAGEMENT OF CHANGE. There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success than to take the lead in the introduction of a new order of things.