MBA PROJECT VIVA VOCE

TITLE OF THE PROJECT : ANALYSIS OF COST CONTROL AND

COST REDUCTION
NAME : BALAJI L
REGISTER NUMBER : 18301107
CLASS : MBA II2nd GENERAL
 INTRODUCTION

Most of the enterprise wants to maximize the profit, which is possible

by decreasing the production cost. For this purpose, management uses
two efficient tools, i.e. cost control and cost reduction.
 Cost control is the practice of identifying and reducing business
expenses to increase profits, and it starts with the budgeting process.
Cost reduction is a technique used to control the unit cost without
compromising the quality of the product
 COMPANY PROFILE

 Newtech Auto components is a rapidly growing organization, with a state-of-the-

art in Chennai, Tamil Nadu, and India. Newtech was established in the year of 2004
as a partnership firm and become private limited company in the year of 2012.
Newtech has rich experience in manufacturing wide range of machined
Components for Braking Parts, Knuckle and Differential unit in Automotive Parts.
They manufacture Auto components by the various processes. We have obtained
ISO 9001: 2008 Quality Management System certifications from AGQR and
conform very strictly to ISO – 8000 guidelines.
 INDUSTRY PROFILE

The history of the Indian automobile industry comprises of three qualitatively distinct
periods:
 The first phase, 1928 – 1955 dominated by import and assembly activity. During the
British regime
The next phase, 1955-1974 a few companies such as Mahindra and Mahindra, Ashok
Motors and Bajaj Auto entered the market for commercial vehicles and two wheelers.
The third period spans since the mid 70’s and thereafter is marked by structural
adjustments and liberalization
 LITERATURE REVIEW

Asalou and Nassar (2007) define cost reduction as the term used for
planned and positive approach to the improvement of efficiency. It can be
viewed in many ways such as increasing productivity and elimination of
waste.
Lucey (1996) refers to the cost reduction as a concept which has the aim
of reducing cost from a previously accepted norm or standard without
reducing the effectiveness or performance of the project or services.
 LITERATURE REVIEW

Philpot (2019) supported that statistical process control is an efficient way

in cost control and cost reduction techniques. He said that defining the
process from the point of view of the financial manager is the first step in
SPC.
Winig (2000) stated that there are two major fundamental financial
management tools which include budgets and variance or fixed cost.
Practically a large number of costs and reduction do not perform in this
manner.
 OBJECTIVE OF STUDY
 PRIMARY OBJECTIVE

To study on cost control and cost reduction

 SECONDARY OBJECTIVE

To study on how to reduce cost in an organization and learned types of way to reduce
cost

To learn about various concept and terminology related with auto components industry
To study the existing production strategy, sales technique, leadership skills and
management skills in NEWTECH AUTO COMPONENTS Pvt. Ltd.
 NEED FOR THE STUDY

The need for the study is to control the cost and even reduce it in the
existing necessary areas. To provide a qualitative product at lower costs
by reducing the cost of labour and increasing in technology.
Thus a detailed study regarding cost control & reduction is to be done
to consider the effectiveness of costs, identify the cost reducing areas
and to suggest for improvement in reducing costs in the organization.
RESEARCH METHODOLOGY

Research is composed of two words’ and ‘Search’ which means to

search again or to search for new facts or to modify older ones in any
branch of knowledge. Research is a scientific and systematic search for
pertinent information on specific topics.
Methodology is the systematic, theoretical analysis of the methods
applied to a field of study. It comprises the theoretical analysis of the
body of methods and principles associated with a branch of knowledge.
TYPES OF RESEARCH DESIGN:
DESCRIPTIVE
Descriptive research is defined as a research method that describes the
characteristics of the population.
ANALYTICAL
In Analytical Research, the Researcher has to use the already available facts
or information, and analyse them to make a critical evaluation of the subject.
PERIOD OF STUDY
2nd January 2020 to 31th March 2020 (3 months).

SAMPLE DATA:

Three years data (2017 - 2019)

This study is carried by using both Primary Data and Secondary
Data.
DATA ANALYTICAL TOOLS:
 PERCENTAGE ANALYSIS

ABC analysis

ANOVA

SPEARSMAN CORELATIONS

RANK ANALYSIS
DATA ANALYSIS

GENDAR
MALE FEMALE

38%

63%
GENDAR NO.OF.RESPONDENTS PERCENTAGE
MALE 20 62%
FEMALE 12 38%
TOTAL 32 100
ANNOVA

  Sum of Squares df Mean Square F Sig.

Between Groups .179 3 .060 .179 .910

Within Groups 9.321 28 .333    

Total 9.500 31      
INTERPRETATION:
From the above table it can be inferred that the P value equal to 0.910
which is greater than the .0.05. Hence, null hypothesis Ho is accepted.
Therefore, it can be stated as there are no significant associations
between gender and years of experience in the company by according
to you which is which was the most effective. There is no significant
between gender and years of experience
SPEARSMAN CORRELATION
  productivity profit

Spearman's rho Level of productivity Correlation Coefficient 1.000 .301

Sig. (2-tailed) . .094

N 32 32

Level of profitability Correlation Coefficient .301 1.000

Sig. (2-tailed) .094 .

N 32 32
INTERPRETATION:
The level of profitability has the cost control measures that the profitability of the
organization
Has increased. Since the correlation has the level of productivity and level of
profitability, the
Above-mentioned table the level of productivity has г=1000, ǹ=32, ρ has no
productivity and the Profit is 0.094 in the organization
Significant level is 10%
There is significant difference between productivity and profitability
SPEARSMAN CORRELATION
  level of budgeting reduce

Spearman's rho level of budgeting Correlation Coefficient 1.000 -.117

Sig. (2-tailed) . .522

N 32 32

Reduce Correlation Coefficient -.117 1.000

Sig. (2-tailed) .522 .

N 32 32
INTERPRETATION:
To reduce the cost in the organization there are some methods to be implemented that are
elimination of waste, improving operation, increasing productivity, cheaper material and
improved standard of quality.
 
 
INTERPRETATION:
Budgeting reduces the operation cost in the correlation and that ranks into five different
categories: budget planning, cost tracking, time management, total quality control and the
standard costing. Significant level is 5%
RANK ANALYSIS

  total rank
budget planing 103 1
cost tracking 98 3
time management 85 5
total quality control 100 2
standard costing 94 4
 total
120
100
80
60
40
20
0
t l
i ng i ng en t ro tin
g
an ck em on os
t pl t ra ag c c
ge o st an l it y a rd
bu
d c e m
q ua and
tim t al st
to
INTERPRETATION:

From the above-mentioned table and chart represents the given the
five-scale ranking and budgeting planning, cost tracking time
management, total quality control and standard costing. The total
number of budgets and rank has mentioned in the above table.
 FINDINGS

It uses the latest state of art technology in its plant production
process
They aim to serve the needs of their customers and build value

Budget planning was their main source to reduce cost

To reduce the cost in the organization they follow elimination of

waste, improving operation, increasing productivity, cheaper
material and improved standard of quality.
 SUGGESTIONS

Companies should use the costing techniques that are most suitable for
their environment. For instance, the level of technological advancement,
size of the company, stage of the product and culture.
 There should be naturalistic research for the development of cost and
management techniques
 Companies should only adopt those techniques that have practical basis
and those techniques that their competitors have successfully adopted.
 CONCLUSION

The relevance of this research is to analyse the importance of cost control

and cost reduction techniques. From the findings of this research cost control
has positive impact on organizational performance. There is good scope for
cost reduction in organizations because it will ultimately increases the profit.
This study has been used to demonstrate whether cost reduction and cost
control techniques will serve in the prevention of unnecessary expenses and
adequate utilization of available resources in an organization.