The purpose of this note is to articulate the approach proposed to be taken in order to
realize the hidden profit potential for an organization by making the right choices about
the customers it serves, the products / and services it delivers and the making the right
decisions on price / delivery plans.
\ue000Study of the Profit & Loss A/c and the associated schedules
\ue000List of Products / Services
\ue000Manufacturing process / service delivery process
\ue000Study of key facilities in the organization, rated capacity, actual capacity, average
\ue000Allocate direct material and direct labor to the products directly
\ue000Identify drivers for the key overhead costs / cost components
\ue000Allocate overheads to the machines / facilities based on their usage of overhead
\ue000wastage / rejection
\ue000lower than rated capacity realization
\ue000frequent set-up changes
\ue000lower capacity utilization
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