strategies leverage out of the duel will most probably will be the subject of the sales price that is cheaper. This is a response that matches the needs of customers who want cheaper goods.
But that will come from that cheap items. The main elements of a manufacturer's production costs.That would make it the lowest quality and value in use are still subject to acceptance of the customer.
1. the meaning of production costs.
Cost (cost) means that expenses incurred in performing the activity.
Cost of production (production cost) means that expenses incurred in conducting activities to produce good products. Quality according to customers ' requirements.
2. the elements of cost of production.
Production costs consist of
2.1 the cost of materials (material cost)
As the costs associated with materials, equipment, tools used in the production of both direct and indirect. As follows:
2.1.1 direct materials (direct material cost) is a raw material used to manufacture directly. Most often as part of a product, such as tire rubber as a raw material, direct, there are pens, plastic and ink as a direct material, etc. The number of active ingredients/raw materials, this will direct manufacture units with variable directly.
2.1.2 indirect materials (indirect cost material), such as materials, tools, and equipment used in manufacturing, most of the time will not change with the volume of production directly, such as sandpaper, hand towel, glue, nail, etc.
Sometimes the indirect materials may be provided in the categories of direct material, it is.Depending on the policies of each organization's accounting, such as knives, lathe for the CNC machine,