cost minimisation

Question 1

what is cost minimisation?

Answer 1

financial strategy that aims to achieve the most cost-effective way of delivering goods+services to require a level of quality

Question 2

Popular sources of cost reduction?

Answer 2

-eliminating waste + avoiding duplication
-simplifying processes + procedures
-negotiating better prices with suppliers
-improving communication
-using most effective ways of training and recruitment
-Introducing flexible working practices that benefit both the employee and employer
-Aggressive control over non-essential overheads

Question 3

what are 2 disadvantages of being too aggressive with cost minimisation?

Answer 3

-business can be left with insufficient capacity to handle unexpected or short-term increases in demand
-reductions by one department may surprise and/or annoy other functions if they are not properly communicated and coordinated