Answer to Question #167822 in Management for Rosalinda

Question

Name a firm or organization you know of that you are reasonably sure uses strategic cost management and explain why is that so?

Answer 1

One great example of a firm that reasonably uses strategic cost management is General Motors. It was incorporated in Delaware in 2009. The company designs, manufacture, and sells various vehicles. Among the vehicles sold includes trucks, cars, vehicles, and it is the second-largest automobile manufacturer in the world.

Since General Motors Company is a manufacturing company, it surely uses strategic cost management in accurately computing the cost of the products and specify if the variable and fixed costs. According to the research of Antoinette L. Lynch, it was in 1993 when General Motors adopt the ABC costing method in their company. They established ABC costing, and this was aimed at helping the company in determining the true cost for a service, product, or job. The decisions promoted by ABC promote consistent with lean production, and this includes a reduction in inventories, increase of the common components, quality increasing among others.