Cost management model under conditions of global economic crisis

Vinko Belak and Ana Bulic

International Journal of Economics and Business Research, 2011, vol. 3, issue 2, 131-146

Abstract: Due to the global economic crisis, cost management and cost cutting have once again become central concerns for many companies. The main objective of this paper is to propose a cost reduction model that would ensure maximum benefit and minimum damage to the company. The cost reduction model in a crisis is based on three criteria: cost impact on revenue (costs without significant impact on revenue are cut first), cost reduction difficulty (costs that are easier to reduce are cut first) and percentage share in total costs (costs with higher relative share are cut first due to their considerable influence). Cost ranks by reduction order are calculated using a multi-criteria decision-making mathematical model. Future event scenarios are forecasted using probability under conditions of uncertainty.

Keywords: cost management; economic crises; cost reduction; probability accounts; multicriteria decision making; MCDM; global crises; cost cutting; cost impacts; revenue; percentage shares; total costs; relative shares; cost ranks; reduction order; future events; forecasting; forecasts; uncertainty; economics; business research. (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:3:y:2011:i:2:p:131-146

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