ABSTRACT

Go to Google and enter the search terms “cost behavior regression analysis,” and you will be either shocked or awed by the 373,000 results, most of them on Web sites that end in “.edu.” An enormous amount of intellectual ability is still being wasted on sophisticated models of manufacturing costs and how to predict and control them. Instead of harnessing more computer power to look at costs in more complex manners, how about this instead: spend more money on things the customers will pay for and less money on things they won’t pay for. It really should be no more complicated than that. Most companies, however, have their cost management so tangled up they have no idea what adds value and what doesn’t.