Cost reduction continuous improvement carries with it the objective of cost reduction.Efforts to reduce costs of existing products and processes is referred to as kaizen costing.Competitive conditions dictate that companies must deliver products the customers want, on time, and at the lowest possible cost.This means that an organization must continually strive for cost improvement.Kaizen costing is characterized by constant, incremental improvements to existing processes and products.Activity analysis is a key element of kaizen costing.Activity analysis can reduce cost in four ways:
1. Activity elimination.
2. Activity selection.
3. Activity reduction.
4. Activity sharing.