Author Topic: Cost minimization  (Read 4413 times)

Offline shibli

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Cost minimization
« on: October 13, 2010, 06:22:38 PM »
Can we discuss on cost minimization and wealth maximization which is one of the objectives of Financial Management? For an organization to grow and sustain in the long run, how important is cost minimization? 
Those who worship the natural elements enter darkness (Air, Water, Fire, etc.). Those who worship sambhuti sink deeper in darkness. [Yajurveda 40:9]; Sambhuti means created things, for example table, chair, idol, etc.

Offline shibli

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Re: Cost minimization
« Reply #1 on: October 13, 2010, 08:20:01 PM »
One way to minimize the cost is to put the right people in the right place, to cut down unnecessary expenses, to utilize human resources properly, and NOT to reward and give financial and other benefits to those who don't deserve.....A good human resource manager knows whom to give what......

over to all to BBA students  who have studied Human Resources Management and Finance....  
Those who worship the natural elements enter darkness (Air, Water, Fire, etc.). Those who worship sambhuti sink deeper in darkness. [Yajurveda 40:9]; Sambhuti means created things, for example table, chair, idol, etc.

Offline goodboy

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Re: Cost minimization
« Reply #2 on: October 14, 2010, 01:21:45 AM »
Thanks mr. shibli sir for posting such a core concept of financial management.......................................
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Offline Md. Limon Hossain

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Re: Cost minimization
« Reply #3 on: October 14, 2010, 08:31:12 AM »

We should be make portfolio to long run of our business. We have to invest our money in different sectors. If we fall in loss in any sector then other can help us to recover that loss. For example, you have 1,000,000 taka and you invest 200,000 in capital market, 200,000 in pharmaceuticals and remaining in Garments sector.

If Garments fall in loss then capital market and pharmaceuticals can help you to recover your loss. If you don’t make this portfolio then you may have to close your business.
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Offline sajib

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Re: Cost minimization
« Reply #4 on: October 14, 2010, 09:12:15 AM »
The process or goal of incurring the least possible opportunity cost in the pursuit of a given activity. Cost minimization is comparable to other objectives, including utility maximization and profit maximization. This goal, however, is generally used when circumstances constrain a decision. For example, a government agency has been assigned the task of building a bridge. It must now do so at the lowest cost possible.
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Offline MD Nur Saifuzzaman Shamim

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Re: Cost minimization
« Reply #5 on: October 14, 2010, 01:36:25 PM »
It is also concept of Economic .
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Offline Didar_BBA

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Re: Cost minimization
« Reply #6 on: October 17, 2010, 08:50:14 PM »
Using all resources in the organization optimally can help to minimize the cost.
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Offline shibli

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Re: Cost minimization
« Reply #7 on: November 09, 2010, 01:40:38 PM »
"Most companies that have CRM feel like it's about cost minimization rather than revenue maximization that makes a company successful in business," said Jeff Felton,
« Last Edit: November 09, 2010, 03:55:12 PM by shibli »
Those who worship the natural elements enter darkness (Air, Water, Fire, etc.). Those who worship sambhuti sink deeper in darkness. [Yajurveda 40:9]; Sambhuti means created things, for example table, chair, idol, etc.

Offline nature

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Re: Cost minimization
« Reply #8 on: November 09, 2010, 02:43:02 PM »
I think it will be very helpful for financial managment. Thanks Mr. Shibli sir
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Offline sethy

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Re: Cost minimization
« Reply #9 on: November 10, 2010, 07:36:43 PM »
Very helpful for financial management
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Offline Faiyaz

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Re: Cost minimization
« Reply #10 on: November 10, 2010, 08:40:28 PM »
As Mr. Limon said, we should diverse the capital so that the risk can be easily adjusted with return. Other than that, good raw materials should be chosen to make a product because it does not get wasted and also efficient workers should be employed. This thing can also maximize profit as these elements prevent unnecessary or wastage of materials as well as helps to position the product in the minds of customers and thus they prefer it... A sound financial planning could also serve in this respect. E.g- an organization should retain some portion of the profit and not distribute it among shareholders so that it could be used as capital. If this planning had not been made then an org. might have to borrow and thus have to pay interest, which could prevail unnecessary, ill-management of profits and a failed foresighting strategy as well as shows the inadequdcy of investment deed and of course the manager.       
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Offline goodboy

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Re: Cost minimization
« Reply #11 on: November 10, 2010, 09:57:48 PM »
As Mr. Limon said, we should diverse the capital so that the risk can be easily adjusted with return. Other than that, good raw materials should be chosen to make a product because it does not get wasted and also efficient workers should be employed. This thing can also maximize profit as these elements prevent unnecessary or wastage of materials as well as helps to position the product in the minds of customers and thus they prefer it... A sound financial planning could also serve in this respect. E.g- an organization should retain some portion of the profit and not distribute it among shareholders so that it could be used as capital. If this planning had not been made then an org. might have to borrow and thus have to pay interest, which could prevail unnecessary, ill-management of profits and a failed foresighting strategy as well as shows the inadequdcy of investment deed and of course the manager.       

Well said my friend.........We all should learn the cost minimization process so effectively to apply it in business areas.................... thanks for your convenience............

Shajib
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Md. Abul Hossain Shajib.
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Department of BBA, Sec:B.
25th Batch.
Daffodil International University.
Email: shajib_1375@diu.edu.bd
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Offline Faiyaz

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Re: Cost minimization
« Reply #12 on: November 11, 2010, 01:34:50 AM »
Thnx sajib... I think we all should know why cost should be minimized. The prime reason is to make an organization profitable. There are different aspects to make an organization profitable. Like, adjusting the capital with the org.'s liquidity. As we know, the main reason to reduce cost is to generate profit. So an organization can reduce liquidity and thus generate profitability by increasing capital. Another thing is, an org. should have a distinct knowledge about fixed, floating, direct and indirect expenses. For example- as we know direct expenses include the raw material, direct patern of wages and convenience. Now, if these are mishandeled then although the financial statements would be ok, but the org. would not be able to take a fair decision. And this may cause different misinterpretetions.   
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Offline tanzina_diu

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Re: Cost minimization
« Reply #13 on: November 11, 2010, 09:29:54 AM »
Dear students, cost minimization also can be possible if we are aware enough about consuming utilities. Most of us are not conscious whenever we use electricity and water.

Tanzina Hossain
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Offline Faiyaz

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Re: Cost minimization
« Reply #14 on: November 11, 2010, 11:10:41 AM »
Thanks Tanzina Ma'am, for your comments. By gathering knowledge about fixed, direct, indirect and floating cost (e.g- electricity etc.) I meant to say having the knowledge to consume it, showing the appropriate expenses to appropriate accounts etc. thus making fruitful financial statements.   
M. Faiyaz Naveed
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Office of the Pro-Vice Chancellor
Daffodil International University