The document outlines the systematic process of cost control aimed at maximizing profitability through effective budgeting, cost analysis, value engineering, inventory management, and process improvement. It further emphasizes the importance of strategic purchasing, detailing the purchasing process, methods, and considerations for both perishable and non-perishable goods. Additionally, it highlights the significance of product satisfaction and testing in fostering customer loyalty and ensuring product quality.

1. Cost Control
Edel Mikel Ali P. Maute

2. Cost Control
• Cost control is the systematic process of
managing expenses to maximize profitability.
• It involves identifying areas of potential waste,
implementing strategies to minimize unnecessary
spending,
• and monitoring financial performance to ensure
adherence to budget constraints.

3. Key Principles of Cost Control:
•Budgeting: Develop a comprehensive
budget that outlines anticipated income and
expenses.
•This provides a roadmap for financial
management and helps track progress
towards achieving financial goals

4. Key Principles of Cost Control:
•Cost Analysis: Regularly analyze expenses to
identify areas where savings are possible.
•This includes examining spending patterns,
comparing prices from different suppliers,
and evaluating the efficiency of operations.

5. Key Principles of Cost Control:
•Value Engineering: Focus on achieving
desired outcomes with the most cost-
effective methods.
•This involves exploring alternative
materials, processes, or designs to reduce
overall costs without compromising quality.

6. Key Principles of Cost Control:
•Inventory Management: Optimize inventory
levels to minimize storage costs and prevent
spoilage or obsolescence.
•This involves implementing strategies like
just-in-time inventory management or
implementing efficient stock rotation
systems.

7. Key Principles of Cost Control:
•Process Improvement: Continuously seek
ways to improve operational efficiency and
reduce waste.
•This might involve streamlining workflows,
automating tasks, or implementing lean
manufacturing principles.

8. Purchasing:
•Purchasing is the process of acquiring goods
and services for a business.
•It plays a crucial role in cost control, as the
decisions made during the purchasing
process directly impact the overall cost of
goods sold.

9. The Purchasing Process:
•Needs Assessment: Identify the specific
goods or services required by the business.
•This involves considering factors like
quantity, quality, delivery timeframes, and
budget constraints.

10. The Purchasing Process:
•Supplier Selection: Research and evaluate
potential suppliers based on factors like
price, quality, reliability, and sustainability
practices.

11. The Purchasing Process:
•Negotiation: Engage in negotiations with
suppliers to secure the best possible prices
and terms. This may involve leveraging
volume discounts, negotiating payment
terms, or establishing long-term contracts.

12. The Purchasing Process:
•Order Placement: Issue purchase orders to
selected suppliers, specifying the required
goods or services, quantities, delivery
dates, and payment terms.

13. The Purchasing Process:
•Receipt and Inspection: Receive and
inspect incoming goods to ensure they meet
the specified quality standards and
quantities.

14. The Purchasing Process:
•Payment Processing: Process payments to
suppliers according to the agreed-upon
terms.

15. The Purchaser: A Strategic Role
•The purchaser is the individual responsible
for managing the purchasing process.
•This role requires a combination of
technical skills, analytical abilities, and
strong negotiation skills.

16. Responsibilities of a Purchaser:
•Identifying and sourcing goods and
services: Researching and evaluating
potential suppliers, negotiating contracts,
and establishing relationships with vendors.

17. Responsibilities of a Purchaser:
•Developing and implementing purchasing
policies and procedures: Ensuring
consistency and efficiency in the purchasing
process, while adhering to company
standards and legal requirements.

18. Responsibilities of a Purchaser:
•Managing inventory levels: Balancing the
need for adequate supply with the desire to
minimize storage costs and prevent waste.

19. Responsibilities of a Purchaser:
•Managing inventory levels: Balancing the
need for adequate supply with the desire to
minimize storage costs and prevent waste.

20. Responsibilities of a Purchaser:
•Analyzing purchasing data: Tracking
spending patterns, identifying cost-saving
opportunities, and evaluating supplier
performance.

21. Responsibilities of a Purchaser:
•Ensuring compliance with ethical and legal
regulations: Adhering to industry standards,
environmental regulations, and fair trade
practices.

22. The Market List: Navigating the
Procurement Landscape
•A market list is a comprehensive directory of
potential suppliers for specific goods or
services.
•It serves as a valuable resource for
purchasers, providing a starting point for
identifying potential vendors and comparing
prices and terms.

23. Benefits of Using a Market List:
•Efficiency: Streamlines the supplier
selection process by providing a centralized
database of potential vendors.

24. Benefits of Using a Market List:
•Cost Savings: Enables purchasers to
compare prices from multiple suppliers,
facilitating negotiations and securing the
best possible deals.

25. Benefits of Using a Market List:
•Quality Control: Provides information about
supplier reputation, quality standards, and
customer reviews, helping to ensure the
procurement of high-quality products.

26. Benefits of Using a Market List:
•Compliance: May include information about
supplier certifications, sustainability
practices, and ethical sourcing policies,
ensuring compliance with relevant
regulations.

27. Purchasing Methods: Tailoring Strategies to
Specific Needs
•Different purchasing methods are employed
depending on the nature of the goods, the
size of the order, and the specific needs of
the business.

28. Common Purchasing Methods:
•Informal or Open Market
Buying: Frequently used for smaller
purchases, involving direct negotiations with
suppliers and obtaining price quotations.

29. Common Purchasing Methods:
•Formal Competitive Bid Buying: Used for
larger purchases, involving a formal bidding
process where multiple suppliers submit
bids based on specified requirements.

30. Common Purchasing Methods:
•Blanket Orders: Long-term contracts with
suppliers for recurring purchases, providing
pre-negotiated prices and terms for a
specific period.

31. Common Purchasing Methods:
•Just-in-Time Purchasing: Minimizing
inventory levels by procuring goods only
when needed, reducing storage costs and
minimizing waste.

32. Common Purchasing Methods:
•Centralized Purchasing: Consolidating
purchasing activities under a single
department or individual, enabling greater
bargaining power and economies of scale

33. Common Purchasing Methods:
•Decentralized Purchasing: Distributing
purchasing authority across different
departments or locations, allowing for
greater flexibility and responsiveness to
local needs

34. Purchasing Perishables: Managing Time-
Sensitive Goods
•Perishable goods are products with a
limited shelf life, requiring careful planning
and management to minimize spoilage and
waste.

35. Key Considerations for Purchasing
Perishables:
• Quality Inspection: Thoroughly inspect
perishables upon receipt to ensure freshness and
quality.
• Storage Conditions: Maintain proper storage
temperatures and humidity levels to extend shelf
life.
• Inventory Rotation: Implement a system of first-
in, first-out (FIFO) inventory rotation to ensure
that older products are used first.

36. Key Considerations for Purchasing
Perishables:
•Demand Forecasting: Accurately predict
demand for perishable goods to minimize
overstocking and waste.
•Relationship with Suppliers: Establish strong
relationships with reliable suppliers who can
consistently provide fresh, high-quality
products.

37. Purchasing Non-Perishables: Optimizing
Long-Term Value
•Non-perishable goods have a longer shelf
life, allowing for greater flexibility in
purchasing and inventory management.

38. Key Considerations for Purchasing Non-
Perishables:
• Bulk Purchasing: Leverage volume discounts by
purchasing larger quantities of non-perishable
goods.
• Storage Optimization: Utilize efficient storage
methods to maximize space and minimize
damage.
• Quality Control: Ensure that non-perishable goods
meet quality standards and are free from defects

39. Key Considerations for Purchasing Non-
Perishables:
•Inventory Management: Implement a
system for tracking inventory levels and
replenishing stock as needed.
•Cost Analysis: Regularly evaluate the cost of
non-perishable goods to identify potential
savings.

40. Product Satisfaction: The Cornerstone of
Customer Loyalty
•Product satisfaction refers to the level of
contentment customers experience with a
product or service.
•It is a crucial factor in driving customer
loyalty, repeat purchases, and positive
word-of-mouth marketing.

41. Factors Influencing Product Satisfaction:
• Quality: The product meets or exceeds customer
expectations in terms of functionality, durability,
and performance.
• Value: The product offers a fair exchange of
value for the price paid.
• Customer Service: Customers receive prompt,
helpful, and courteous assistance when needed.

42. Factors Influencing Product Satisfaction:
• Brand Reputation: The company has a strong
reputation for delivering quality products and
providing excellent customer service.
• User Experience: The product is easy to use,
understand, and navigate.

43. Product Testing: Ensuring Quality and
Meeting Expectations
•Product testing is a systematic process of
evaluating a product's performance,
functionality, and usability.
•It helps identify potential defects, improve
product quality, and ensure that the product
meets customer expectations.

44. Types of Product Testing:
• Functional Testing: Verifies that the product
performs its intended functions correctly.
• Usability Testing: Evaluates the ease of use,
intuitiveness, and overall user experience.
• Performance Testing: Measures the product's
speed, responsiveness, and stability under
various conditions.

45. Types of Product Testing:
• Security Testing: Assesses the product's
vulnerability to security threats and breaches.
• Compatibility Testing: Ensures that the product
works seamlessly with other systems and devices.

46. Benefits of Product Testing:
• Improved Product Quality: Identifies and
resolves defects before release, enhancing
overall product quality and reliability.
• Enhanced Customer Satisfaction: Ensures that
the product meets customer expectations,
leading to greater satisfaction and loyalty.

47. Benefits of Product Testing:
• Reduced Development Costs: Early detection of
defects can prevent costly rework and delays in
product launch.
• Competitive Advantage: Delivering high-quality
products can give a company a competitive edge
in the marketplace.

48. Conclusion: A Holistic Approach to Business
Success
• By implementing effective cost control measures,
optimizing purchasing practices, and prioritizing
product satisfaction, businesses can achieve
sustainable growth, profitability, and customer
loyalty.

49. Merci..