Friday, August 6, 2010

How the cost control can be applied to different inventory models in construction industries?

Its better to prepare a budget for expenses for each cost center/project.


For example if we know the no. of cement bags required for the project viz., 3000 bags we can fix the budget by 3000 x 280 (if the current rate is 250 fix an escalation since on completion of the project the price may raise.) So also for all materials. On the other way find out the expenses incurred for the previous year (YOY) for a project %26amp; based on its cost this may be also arrived at by adding 7.5% to 10% on each items.Periodical report (MIS) on expenses has to be monitored and consumption also to be checked whether its in line with our budget. If any thing goes wrong extraordinarily check to be made. This riase may be occurred due to certain conditions beyond our control.

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