Dependable Office Supply has initiated an aggressive cost-control strategy in-line with it’s plans for expansion.  This will prevent operating costs from escalating over projections throughout the company’s expansion efforts.  The table (Cost Containment) is a basic version of the timetable for the cost-control program.

The self-directed cost audit containment is comprised of several programs that are used for internal cost control purposes.  Several of the programs are mentioned above.  The Cost Reduction Reward Program is designed to enable employees to earn bonuses based on projected cost savings of the suggestions they provide.  Several employees have actually been given bonuses of substantial amounts of money as a result of their input and awareness of areas where inefficiencies exist, and the reductions in cost of operations have been substantial.

Stocker Lodish has also conducted a complete analysis of the management structure of the company to determine if any alternative organization of that structure could result in savings.  Because no substantial savings were found to be possible, no action was taken on this front.

The Logistics Cost Audit portion of the Cost Containment Strategy is the area in which the most substantial savings have been realized.  Upon the recommendation of Joe Hardware, Dependable Office Supply has initiated a new inventory management strategy that takes advantage of a software program that Joe customized for the company.  This is expected to result in significant cost savings in the logistics area by providing for greater efficiencies and enabling a greater ability to service customers appropriately.