A Managerial Cost Index and Analysis Method for its Reduction

Abstract

In many companies, focus of personnel cost reduction has shifted from direct sections to indirect sections. Most part of indirect cost is occupied by personnel cost of management operation, and its reduction cannot be achieved without reforming the background management process. some indexes substituting managerial eost are proposed by supposing five main factors necessitating increased manhour, number of sections, management process units, standard manhour, variety causing manhour, and error causing manhour. Modified DFD is proposed in order to describe and analize management, process. Al. the same time, it is shown that some rules are effective to reform the process and improve the index without impairing management quality. Finally, validity of our method is examined by applying them to an actual logistics managenent process.