Cost transformation - P2

Question 1

What are the six parts to the cost transformation model?

Answer 1

Engendering a cost-conscious culture
Managing the risks inherent in driving cost-competiveness
Connecting the products with profitability
Generating maximum value through new products
Incorporating sustainability to optimise profits
Understanding cost drivers: Cost accounting systems and processes

Question 2

What is the purpose of the cost transformation model?

Answer 2

Aim to be a cost leader so that costs are lower than rivals
Every product or service should make a positive contribution
Profitability of new products should be assessed before production begins