A Fabulous Affair has initiated an aggressive cost-control strategy to prevent expansion and operating costs from escalating throughout the company which could potentially erode profit margins.  This will prevent operating costs from exceeding 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 used for internal cost-control purposes.  Several of the programs are mentioned above.  The Cost Reduction Reward Program will be designed to enable employees to earn bonuses based on projected cost savings from the suggestions they provide. Employees will be encouraged to become aware of areas where inefficiencies exist in the business operations of A Fabulous Affair.  Jack Banquet will evaluate their input and reward suggestions where the reductions in cost of operations, as a result, have been substantial.

Jack Banquet will also conduct a complete analysis of the management structure, operating logistics and communications channels of the company periodically to determine if any alternative organization of these structures could result in any savings.   

Additionally, by continuing to establish good relationships with suppliers A Fabulous Affair will be forewarned of fluctuations in the cost of supplies that they depend on thus limiting the downside potential of variable costs by incorporating this into their forecasts.  Likewise, careful research and planning well in advance of the events they intend on producing takes this variability into account.  Further, A Fabulous Affair attempts to maintain a surplus in its own stocks of frequently used supplies thereby saving money by eliminating certain variable costs altogether.  By setting targets in line with market forecasts, A Fabulous Affair is confident that the above cost-control strategies will allow it to effectively build the business by expanding and increase the potential for profits.  Should projections be off the mark A Fabulous Affair will revise targets to better reflect the direction of the business and to re-evaluate its cost-control techniques.