Cost Reduction Research Paper

*Citizens over 80 years to have exemption limit of Rs 5 lakh.* To reduce surcharge on domestic companies to 5 percent from 7.5 percent.Cost reduction is a management activity which is aimed at minimizing the cost of production of their goods or rendering their service to customers while the quality standard does not fall or reduce.

Companies are finding it difficult to retain people and are laying off people which is unprecedented in recent history of industrial recession .A non-technical summary of this paper is available in the November 1997 NBER Digest.You can sign up to receive the NBER Digest by email.These developments have prompted people to look for cost reduction ideas and methods.Those who have opted for focused cost reduction strategies have survived those who could not managed have perished .The relevant data collected were analyzed, using simple percentage and tested using chi-square.The result of the analysis revealed that there is a significant relationship between cost control and reduction; cost control and reduction have a positive impact on the quality of goods produced and services rendered by maintaining the quality of goods and services rendered; with the adoption of cost control and reduction, all forms of extra budgetary spending has been reduced and unnecessary expenses eliminated; adoption of cost control and reduction cant pose a threat to employees and there is a direct relationship between cost control, reduction and profit.The study concluded that adoption of cost control and reduction maintains the quality of goods and services and there is a direct relationship between cost control, reduction and profit finally the study recommends that Proper adoption of cost control and reduction should be ensured so that it will not lead to company failure in the future; there should be proper evaluation of cost control and reduction techniques and constant monitoring and check on the techniques adopted to ensure they suit the purpose in which it was adopted; that there should be effective communication, proper awareness and orientation of cost control and reduction should be put in place so that employees can be fully informed beforehand about the cost control and reduction process before embarking on cost control and reduction programs; also ensure that in the process of adopting cost control and reduction and proper documentation of cost control and reduction programs to ensure that the programs are effective.Cost is one of the three pillars supporting project success or failure, the other two being schedule and performance.Companies have to develop its own cost reduction program for savings without cutting jobs.Cost reduction measures hence need to be exploded in right earnest, not restricted to half-hearted cost savings measure of economizing just on administrative costs of conveyance, staff welfare, stationery and telephone, but should be backed up with harsh cost saving measures in all major areas.