Abstract ▼ AI-Helper

Companies today face the need to satisfy the needs of the era that require them to improve their structure and to re-align their management objectives in order to enhance their competitiveness to survive and to grow amidst the new company management environment. In particular, as the economy is hurt...

Companies today face the need to satisfy the needs of the era that require them to improve their structure and to re-align their management objectives in order to enhance their competitiveness to survive and to grow amidst the new company management environment. In particular, as the economy is hurt by the recent economy stagnation and by the aggravation of conglomerate (CHAEBOL) management, there are many discussions underway on the root causes of decreased company competitiveness in order to improve their management. This change in the competitive environment is making the companies realize the importance of production cost management. Along with the plant and production automaton, companies are faced with increased share of indirect cost due to the introduction of just in time production system, flexible production system, company-wide quality management system and other latest production management methods. By using the production line in a flexible manner, transformation into production of many products in smaller quantities took place from that of producing few products in mass. Due to these phenomena, all production and work processes are becoming increasingly complex. Accordingly existing method of calculating production cost by simply dividing up the costs into direct and indirect costs and by using the calculated production cost related information to calculate direct cost almost instinctively, and to distribute indirect cost is problematic when applying to the actual production field where more accurate production cost analysis is required. Instead, new production cost calculation model that factors in the element of perfomance when it comes to production system is required. Accordingly, companies need to adopt production cost management system that can solve various problems that were not solved by using existing management systems that were introduced to calculate production cost for the mass production method of the past in a more innovative and rational manner. Its importance is now highlighted as well.

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