STRATEGIC COST MANAGEMENT

Paper Code: 
24ATG424
Credits: 
06
Contact Hours: 
90.00
Max. Marks: 
100.00
Objective: 

This course will enable the students to acquire the skills and knowledge necessary to strategically manage costs within organizations to enhance financial performance and competitiveness.

 

Course Outcomes: 

Course

Learning outcome

(at course level)

Learning and teaching strategies

Assessment Strategies

Course

Code

Course

title

24ATG424

Strategic Cost Management

(Theory)

CO109:  Analyze the concepts of Strategic Cost Management, including its components, limitations of Traditional Cost Management, and the differences between Traditional and Strategic Cost Management

CO110: Evaluate the basics, processes, methods, and techniques of Cost Control and Cost Reduction programs.

CO111: Assess Total Quality Management (TQM) principles, including the Six C’s of TQM, its implementation, and criticisms

CO112:  Apply the concepts of Transfer Pricing, including utility, methods, and decisions in different circumstances.;

CO113:  Synthesize the concepts of Kaizen Costing, including its meaning, comparison with target costing, benchmarking, types, and steps, along with Pricing Strategies and Decisions.;

CO114: Contribute effectively in course-specific interaction

Approach in Teaching: Interactive Lectures, Discussion, Tutorials, Problem Solving Sessions & Presentations

 

Learning activities for the students: Self-learning assignments, Case Study Analysis, Class Presentations (Individual & Group)

 

Continuous Assessment Test, Semester End Examinations, Quiz, Solving Numerical Problems, Assignments,

Individual & Group Projects

 

18.00
Unit I: 
Introduction to SCM and Cost Control, Cost Reduction
  • Introduction to Strategic Cost Management Concept of Strategic Cost Management; Components of SCM, Limitations of Traditional Cost Management ,Traditional vs. Strategic Cost Management
  • Cost Control and Cost Reduction–basics, process, methods and techniques of cost reduction programme.
 

 

18.00
Unit II: 
TQM, JIT and Life Cycle Costing

● Total Quality Management(TQM): Six C’s of TQM, Implementation of TQM, Criticism of TQM, ● Just In Time (JIT): Essential Pre-requisites of JIT system, Impact, Performance measurement, Back-flushing in JIT system. ● Life cycle costing: Product life cycle, life cycle characteristics, strategies, benefits, uses.

18.00
Unit III: 
Transfer Pricing, BPR and Pareto Analysis

● Transfer Pricing: Utility, methods: market based, Cost based and Negotiation based Transfer pricing, Transfer Pricing Decisions in different Circumstances.
● Process Innovation and Business Process Re-engineering: Process innovation, Principles of BPR, Main stages, difference between BPR and PI.
● Pareto Analysis: Usefulness and application

18.00
Unit IV: 
Target Costing and Value Chain Analysis

● Transfer Pricing: Utility, methods: market based, Cost based and Negotiation based Transfer pricing, Transfer Pricing Decisions in different Circumstances.
● Process Innovation and Business Process Re-engineering: Process innovation, Principles of BPR, Main stages, difference between BPR and PI.
● Pareto Analysis: Usefulness and application

18.00
Unit V: 
Kaizen Costing and Pricing Decisions

● Kaizen Costing: Meaning, Target costing v/s kaizen costing, Benchmarking, Types , pre- requisites and steps of benchmarking,
● Pricing Strategies/ Decisions : Theory & Principles of Product Pricing, Pricing – New Product, Finished Products & Pricing of Services, Sensitivity Analysis in Pricing Decisions ,Pricing Decision under Special Circumstances , Pricing Strategies

Essential Readings: 

1. Strategic Cost Management : Lal, Jawahar (Himalaya Publishing House.)
2. Cost Management: Strategies For Business Decisions : Hilton,Ronaldw.,Maher, Michael W. & Selto, Frank A. (Mcgraw Hill Irwin.)
3. Strategic Cost Management :Shank, John K. &Govindarajan, Vijay.(The Free Press)

References: 

Suggested Readings:

  1. Cost Management A Strategic Emphasis: Blocher , Stout,  Cokins(By Mcgraw-Hill)
  2. Strategic Cost Management And Performance Evaluation: Saxena V.K., (Sultan Chand & Sons)
  3. Cost Management:A Strategic Perspective: Vaidya, (Macmillan Publishers India Limited)

 

e-Reources:

  1. https://icmai.in/upload/Students/Syllabus-2012/Study_Material_New/Final-Paper15.pdf
  2. https://book.akij.net/eBooks/2018/March/5aac97792398e/Cost%20Management%20A%20Strategic%20Emphasis,%205th%20Edition-2-997.pdf
  3. https://www.srinivasaacademy.com/downloads/266/201_Paper-5Part-A.pdf
  4. https://www.pdfdrive.com/strategic-cost-management-d53968072.html

 

Note- The candidate shall be permitted to use battery operated pocket calculator that should not have more than 12 digits, 6 functions and 2 memories and should be noiseless and cordless

 

Academic Year: 
2024-2025
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