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New techniques are often described as contributing to cost reduction, but when cost reduction is necessary it is not obvious that such new approaches are

New techniques are often described as contributing to cost reduction, but when cost reduction is necessary it is not obvious that such new approaches are used in preference to more established approaches. Three examples are:

New Technique Compared with Established Approach

a) Benchmarking Interfirm Comparison

b) Activity Based Budgeting Zero Base Budgeting

c) Target Costing Continuous Cost Improvement

You are required, for two of the three newer techniques mentioned above:

  • to explain its objectives
  • to explain its workings
  • to differentiate it from the related approach identified
  • to explain how it would contribute to a cost reduction programme.

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