Kaizen costing is a cost reduction system. Yasuhiro Monden defines kaizen costing as "the maintenance of present cost levels for products currently being manufactured via systematic efforts to achieve the desired cost level." The word kaizen is a Japanese word meaning continuous improvement
2. FIRST HAVE TO UNDERSTAND
TARGET COSTING
• TARGET COSTING USED TO DECIDE THE COST
PRICE OR COST DETERMINE OF ANY PRODUCTS
• SUPPOSE - SELL PRICE (DEPEND ON MARKET)
PROFIT MARGIN – WE CAN ASSUME THAT
ALTEMETLY WE GET COST PRICE
---- VALUE ENGINEERING – IS THE TECHNIQUE
TO RUDUCE THE COST OF PRODUCT WITH THE
HELP VALUE ENGINEERING AND KAIZEN
COSTING
4. Kaizen costing
• Kaizen costing is a method of reducing managing costs.
It's also referred to as continuous
improvement costing. The method is aimed at cost
reduction below standard level, but without negative
effects on quality, staff, safety, etc.
• The idea is similar to target costing, where managers
try to achieve the result with lower resources.
However, target costing is used on design stage, while
kaizen costing - during the manufacturing stage. What's
more important, kaizen costing requires high
involvement of employees, while target costing - only
some designers.
