1. R. Cooper, When Lean Enterprises Collide: Competing Through Confrontation (Boston: Harvard Business School Press, 1995), p. 7.
2. R. Cooper and R. Slagmulder, Target Costing and Value Engineering (Portland, Oregon: Productivity Press, 1997).
3. Target costs should include any costs that are driven by the number of units sold. For example, if the company accepts responsibility for disposing of a product at the end of its useful life, these costs are included in the target cost. See:
R. Cooper and B. Chew, “Control Tomorrow’s Costs through Today’s Designs,” Harvard Business Review,volume 74, January–February 1996, pp. 88–97.
4. R. Cooper and T. Yoshikawa, “Isuzu Motors, Ltd.: Cost Creation Program” (Boston: Harvard Business School, case study 9-195-054);
R. Cooper, “Komatsu, Ltd. (A): Target Costing System” (Boston: Harvard Business School, case study 9-194-037);
R. Cooper, “Nissan Motor Company, Ltd.” (Boston: Harvard Business School, case study 9-194-040);
R. Cooper, “Olympus Optical Company, Ltd. (A): Cost Management for Short Life-Cycle Products” (Boston: Harvard Business School, case study 9-195-072);
R. Cooper, “Toyota Motor Corporation” (Boston: Harvard Business School, case study 9-197-031);
R. Cooper, “Sony Corporation: The Walkman Line”(Boston: Harvard Business School, case study 9-195-076); and
R. Cooper, “Topcon Corporation: Production Control System” (Boston: Harvard Business School, case study 9-195-082).
5. When firms sell the same product at different prices, for example, in different countries or through different channels, an average selling price is used.
Quality Practices at Nissan Motor Company
...Quality Practices at Nissan Motor Company Management 532 Table of Contents TITLE PAGE………………………………………………………………………..1 TABLE OF CONTENTS…………………………………………………………..2 ABSTRACT………………………………………………………………………….3 CHAPTER I – INTRODUCTION…………………………………………………4 CHAPTER II – PLAN DEVELOPMENT………………………………………..5 CHAPTER III – ANALYSIS……………………………………………………….7 CHAPTER IV – OUTLINING FINDINGS………………………………………..8 CHAPTER V – SUMMARY AND RECOMMENDATIONS…………………..9 REFERENCES…………………………………………………………………….11 Abstract Nissan Motor Company, Limited, is a global corporation with three automotive businesses (Nissan, Datsun and Infiniti) and a marine business (Nissan Marine). Nissan Motor Company and its sub-companies practice quality management using a Field Quality Center concept with 7 seven centers located around the world to serve customers. This group project discusses Nissan Motors Corporation’s history, recent quality downturn and their attempt to “expedite improvements that exceed customer expectations” to regain their lost reputation for quality. We will examine what and how quality practices have been developed and implemented by the Nissan Motor Company in response to these recent trends. In addition, we will determine if adopted quality practices have been successful in fostering......
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Honda Motor Company Ltd.
...competitive at any global location * Equally proficient in cost & quality at all the plants * Maintaining relationship with suppliers How other companies see their suppliers: * Partnerships to control whole supply chain * Evaluate whether they must continue to assemble products themselves or whether they can outsource production entirely * Slashed the number of suppliers they did business with, awarded only to the survivors a long term contract. * Encouraged top-tier vendors to manage the lower tiers. * Go for the immediate benefits of low wage costs outweighed the long-term benefits of investing in relationships. * The development of Internet-based technologies allowed companies to get suppliers to compete on cost more efficiently, eventually causing suppliers to brutally compete in cost. 6. What is Honda’s policy on new product development and supplier involvement? How does it differ from other automotive companies? Pacific Automotive Cooperative (PAC) in 1986, the Japanese and American governments initiated its Market Oriented Strategies agreement (MOSS). The new policy required companies to report all of their import and localization volumes since 1986. Re-assigned Pacific Automotive Cooperative (PAC) in 1995 Joint venture composed of Japanese automakers, (including Honda, Toyota, Nissan, and Matshida), consisting of 32 shareholders. This cooperative was established to meet political objectives for production in North......
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...the flat beer from the fermentation tank through a filter into bottles and carbonates the final product. The filter is used to prevent wild yeast from entering the bottles and helps the beer to ‘clear’ properly. Wild yeast can result in bacterial growth and cause the beer to have a cloudy appearance. To carbonate the beer, CO2 is injected into the bottle simultaneously with the beer. The bottles are then capped, labeled, and put into cool storage for several days. After three to five days of bottle aging, the brew is ready to be sold and delivered to the southern outlets that feature MidSouth Microbrewery brands. *This case was adapted by Marjorie Platt from a case by James Weisel and is prepared solely to aid classroom discussion. Company Prospects MidSouth Microbrewery produces three different brews: Rebel Ale, Shiloh Stout, and Corinthian Bock. Rebel Ale is a medium-colored amber ale with a slightly sweet taste. MSM’s Shiloh Stout is similar to the rich, bitter stouts from well-known Irish breweries. For both of these brews, the production process is fairly straightforward. By contrast, Corinthian Bock requires more attention in order to obtain the thick, rich, full-flavored aromatic taste characteristic of bock beers. Rebel Ale is sold primarily to bars in college towns that order fairly large shipments. The stout and bock beers are more specialty-type products that are shipped to upscale restaurants and hotels that order smaller quantities. MSM expected to brew and...
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Research on Nissan Motors Philippines, Inc.
...Research on Nissan Motors Philippines, Inc. Gallego, Reyjen Ibasco, Robert Marcelo, Mary Christine Tolentino, Keziah Ty, Rey Jumar BSBA 4C Nissan Motors Philippines, Inc. Nissan Motors Philippines, Inc. (NMPI) is an affiliate of Nissan Motor Limited of Japan. It was established in April 1982. Shortly after its incorporation, it acquired the Volkswagen facility. As of the moment, it assembles passenger vehicles and serves its customers with around 200 employees. Moreover, there are seventeen authorized dealers of Nissan in the whole country. Nissan Philippines Research The ABS used in Mercedes-Benz, BMW, and Volvo cars is made in the Philippines. Ford, Toyota, Mitsubishi, and Nissan are the most prominent automakers that make cars in the country. A 2003 Canadian market research report predicted that further more investments in this sector were expected to grow in the next following years. Toyota has been the most used vehicle in the country. (http://www.termpaperwarehouse.com/essay-on/External-Analysis-Of-The-Philippines/38204) Automotive industry in the Philippines New Motor Vehicle Development Programs (MVDPs) However, the economic and political crisis in 1983 had a devastating impact on the expanding industry. Because of the declining market for Philippine exports and the resulting capital flight, the industry was left with only two international participants (PAMCOR-Mitsubishi Nissan) and in 1984. Furthermore, only 40 local parts manufacturers...
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Nissan Motors Lean Leap
...| Nissan Motor Company | Revival Plan Review | | ) | | In 1987 Japan’s economic expansion was driven by the inflation of stock prices and real estate values. As consumer confidence increased, so did the population’s appetite for luxury goods. In response to this national trend in consumer spending, Nissan Motor Company (Nissan) launched an aggressive expansion plan to meet the demands of the marketplace. The organization invested heavily in new manufacturing facilities and upgraded their distribution network. Nissan’s debt grew from $11.8B to $32.7B. Japan’s bubble economy collapsed in the early 1990s and Nissan’s profits deteriorated in parallel (Wiki – 2011). In response to a dire operating situation, Nissan formed a partnership with Renault in 1999. While the injection of capital was much needed by the Japanese car manufacturer, the most important asset exchanged in the strategic alliance turned out to be Carlos Ghosn, the Renault Executive Vice President appointed to turn around Nissan. The following analysis focuses on Carlos Ghosn’s leadership and the Nissan Revival Plan (NRP). The NRP saved Nissan and its roots seem to have originated from the Lean Action Plan framework. Get Started (First Six Months) Find a change agent (Score - 5 of 5) The Lean Thinking textbook places a considerable amount of emphasis on starting the Lean Leap. While it may seem basic in nature, kicking off the process is not easy, and it requires an organization to have an......
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Implementing Target Costing
...Accountant 12 March 2002 Implementation of Target Costing and the concerns Target costing is an approach developed by the Japanese companies. It is: “Target costing is the process to determine the maximum allowable cost for a particular new product and then developing the prototype that can be profitably manufactured and distributed for that maximum target cost figure.” Target cost for a particular product can be calculated by starting with the anticipated selling price/target price of the product and less the profit margin required or desired profit as follows: Anticipated selling price – desired profit = Target cost Target costing in fact, is a tool that can be used for managing the costs. Normally, the planners will make use of target costing during product and process design in order to reduce the future manufacturing costs of the product. Concerns about Target Costing: Studies on target costing carried out in Japan have shown that there are several problems that occur in the process of implementing the target costing system. This is true especially in the situation where the company only focuses on the issue of meeting the target cost and ignores the other elements of overall company goals. The problems are: In general, there will be a lot of parties involved in the process of target costing. Due to the reason that everyone is having their own ideas, therefore, conflicts will occur between those who are took part in target costing process. Sometimes the......
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...TABLE OF CONTENTS ACKNOWLEDGEMENT 2 INTRODUCTION 3 CONTENT 4 1.0 DEFINITION OF TARGET COSTING 4 2.0 THE PURPOSE OF TARGET COSTING 4 3.0 CHARACTERISTIC OF TARGET COSTING 4 4.0 PRIMARY PROCESS OF TARGET COSTING 5 5.0 LIFE CYCLE COSTING 6 6.0 COST REDUCTION EFFORT 6 7.0 ADVANTAGES OF TARGET COSTING 7 CONCLUSION 9 APPLICATION TO INDUSTRY 9 REFERENCES 10 ACKNOWLEDGEMENT In performing our assignment, we had to take the help and guideline of some respected person, who deserve our greatest gratitude. In the completion of this assignment give us much pleasure. We would to gratitude Dr. Rosiatimah Mohd Isafor giving a good guideline for the assignment throughout numerous consultations. We would also like to expend our deepest gratitude to all those who have directly or indirectly guided us in writing this assignment. Many people, especially our classmates and team members itself, have made valuable comment suggestions on this proposal which gave us an inspiration to improve our assignment. We thank all the people for their help directly and indirectly to complete our assignment. INTRODUCTION Organization might have a number of objectives such as customer satisfaction with the good quality of product that company produced, achieving a high level of market penetration, providing a good work environment to their employees and being able to achieve high revenue. Therefore, there is a number of strategic management accounting techniques that can be...
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Ford Motor Company
...Ford Motor Company In today’s society it is a very common theme for men, especially hardworking men, to want a truck. That being said, what better company is there for a truck or a durable vehicle to not only improve image but use as an aid in everyday working conditions than Ford? We think that Ford Motor Company is a very good company to investigate and research because of the solid foundation it stands on and the rich history and tradition of such an illustrious company. Ford has been at the forefront of the automobile industry for the majority of its existence. They have been a trailblazer as far as mass production, and advancements in just about every way imaginable. For these reasons and more we will be doing our dijuno project on the Ford Motor Company. We will be exploring the consumer-brand relationships, breakdown the ads (testimonials), how their product raises self-esteem, and the product as an extended self. The company mainly targets the working male who has the need for a big truck to do heavy lifting and towing. The company has the richest history of any car company in the U.S. and for that reason we will give a very in depth and concise overview of such. Ford also appeals to those who have the upmost pride and support of the U.S. Other things we will be evaluating and analyzing in our PowerPoint presentation will include the target market for different demographics, how it caters to the needs of the consumers, the strategies and tactics used to appeal to...
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Honda Motor Company Ltd. International Purchasing Division
...Honda Motor Company Ltd. International Purchasing Division History of Japanese Exports – Automotive Mr. Obi provided the interviewers with a book that was recently published by the Japanese Automobile Manufacturers Association (JAMA) called “Two Decades. . . “, (attached) which was for publicity purposes. This book was largely published to divert trade issue complaints, but really only states the facts on Japan’s investments in the United States in the automobile industry. The book notes that the commitment to localize production is not limited to assembly factories, but that Japanese auto companies have moved R&D and design facilities to the U.S., and also purchase a significant amount ($22 B) worth of auto parts from U.S. suppliers. Over the last twenty years, Japanese companies have invested $14 B, and now employ 43,000 US workers directly, plus 300,000 in the dealer networks. Of all the companies, Honda has one of the largest investments ($3B), surpassed only by Toyota’s facility in Kentucky ($3.9 B). However, Toyota has produced the most vehicles (634,374) than any other Japanese manufacturer. Honda’s Export Strategy The fact that Honda is leading the Japanese effort in the U.S. is not surprising. Honda is today the most globalized automobile manufacturer, (although still not the highest sales). In November 1997, the Honda Washington D.C. office released the report “Honda and U.S. – Japan Automotive Trade” (attached), which summarizes how Honda has become......
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...The Moonglow Electronics Company (a fictitious name for an actual North American company) is a rapidly growing manufacturer of sophisticated electronic equipment for industrial application. Moonglow has analyzed the price, cost, and volume history of some of their key products. Looking more specifically at four products introduced over the last three years, the company found that prices were usually above what they projected by 13%, while costs were up by 65%. Senior Moonglow financial management, with the full support of the CEO, has concluded that a target costing initiative focused on both new and existing products should be introduced throughout the company. It was agreed by Moonglow management that cost management would have to receive much greater attention “every step of the way” in the development process. During product planning (marketing), as a part of product definition, the product’s selling price, projected volume, and initial “target” cost would be determined. In concept design, rough cost estimates would be assessed and assigned to component or functional blocks. By general design and prototype development, more rough cost estimates would be made to assess whether the target cost could still be achieved. Similarly, in detail design (drawings and specifications) and manufacturing system design (processes, tooling, etc.) detailed cost estimates would continue to be made to assure that the target cost could be met. During each and every step of the......
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Mgt 660 Clc Nissan Motor Co. Ltd. Case Study
...MGT 660 CLC nissan Motor Co. Ltd. Case Study Click Link Below To Buy: http://hwaid.com/shop/mgt-660-clc-nissan-motor-co-ltd-case-study/ Details: This is a CLC assignment. Your instructor will designate groups. Read the "Nissan Motor Co. Ltd. Case Study," located in the textbook. In a PowerPoint Presentation of 10-15 slides (with speaker notes, title slide, and reference slide), address the following questions: 1. How would you describe the context into which Carlos Ghosn was thrown when he was recruited in 1999 to turn around Nissan? How would you describe Ghosn's leadership style? 2. How would you measure Ghosn's approach to leading change? How effective was he? To what extent did his leadership affect the strategy at Nissan? 3. In 2002, some industry experts remarked that Nissan's success was partly achieved at the expense of its suppliers. Do you agree? Why or why not? Is Nissan poised for long-term success? 4. What strategic and specific recommendations would you make to "Le Cost Killer" moving beyond 2002? Answer each question on its own slide in your PowerPoint presentation. While APA format is not required for the body of this assignment, solid academic writing is expected and in-text citations and references should be presented using APA documentation guidelines, which can be found in the APA Style Guide, located in the Student Success Center. This assignment uses a grading rubric. Instructors will be using the rubric to grade the assignment;...
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Nissan Motor Company, Ltd: Target Costing System
...1. What are the strengths and weaknesses of the target costing system? First, target costing originally starts with mangers estimate the cost that customers are willing to pay and how competitor will price the same products or services. (Cost Accounting. Page 545). In the Nissan case, customers are very knowledgeable because the customer demand requires more variations and model types of automobiles. This is a favorable market for Nissan. Nissan managers can set an expected profit margin because the customers has a very high demand of automobiles and they know the automobiles market very well. Second, target costing for a product includes direct manufacturing costs direct materials, direct manufacturing labor, and direct machining costs. (Cost Accounting. Page 519). Analyzing each cost element and eliminate the unnecessary value-added is one of the cost management goals in the target costing system. In order to have a competitive price, Nissan managers have to eliminate some value-added costs which are unnecessary and not so helpful for the automobile manufacturing and selling process. Target costing can shorten the product lives and save Nissan company time to do marketing and financial management. A good example in the Nissan case it that they eliminated the "five-door variant" because it is unnecessary. Last, target costing system helps Nissan build a cross-functional team. The design department, manufacturing department, sales department and management department work...
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...stability also requires adoption and use of an efficient management system. 1. What is Target Costing? Target costing of a product or job is sum total of the variable cost targets fixed for each element of cost (material, labor, power, consumables etc.) required to be incurred for producing that product or job estimated on zero-base principles, plus the fixed cost targeted on the same principles, so that the total cost plus the estimated margin of profit is not more than the price the product is capable of fetching in the market. Zero base principle is the variable cost incurred for producing zero units of the product and from that position what is the incremental variable cost for each unit plus the fixed targeted cost (Rent, Rates and taxes, advertisement, communication etc.) required to set up the facility to produce an estimated number of units. 2.Why is Target Costing important for corporations yearning to have market share and profitable future? The Advantage of Target Costings: 1. We have a cost goal to achieve within the selling price, on realization of which there can be no loss. Cost Optimization: A primary advantage of target costing is that it allows you to analyze the best way to make or acquire products at the lowest costs. Minimizing costs is a common financial goal of any small business, regardless of whether they offer high, medium or low prices. Minimizing costs gives a small company financial flexibility to focus on achieving high profit......
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...INTRODUCTION OF TARGET COSTING Target costing is a system of profit planning and cost management. The required features and performance of the proposed product are established. Then target costing determines the life cycle cost at which the product must be produced, to generate the firm’s desired level of profit. Given the product’s anticipated selling price (Cooper and Slagmulder,1999, p.166). Note that target costing is not a method for product costing , it is a technique for cost management. It was devised in Japan, where it is used widely, particularly in automobile, electrical and equipment-manufacturing industries (Lorino, 1995). With the effect of globalization, it is gradually gaining acceptance in the Western world. EXAMPLE OF TARGET COSTING Let’s assume that the planned selling price of $250 and a planned cost, including upstream and downstream costs, of $200 per unit. The selling price was based on the plan cost per unit plus a planned profit markup of 25% of selling price. If the company had used target costing, the preparation of the life cycle budget and the planned level of profit might have been very different. Let’s say the market research indicated to ACDP that to sell 50 000 units the CD Super would have to be priced at $190. Given this information we can estimate the target cost for CD Super as: Target cost = target selling price – (target profit margin) = $190 – (0.25 X $190) = $142.5 THE TARGET COSTING PROCESS Early in the product planning......
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Nissan Target Costing
...Strengths: Target cost system is ideal for assembly-oriented industries with great involvement in the diversification of product lines, usage of technologies of factory automation, development of systems for reducing cost during all the stages of product’s life cycle such as is the case of Nissan Motor# Since Nissan cost system is continuously undergoing modification, in the case the target cost cannot be achieved, the products may still be launched if management are still confident that the process of continuous improvement will enable the target cost to be achieved early in the product’s life# so the actual cost can be driven down to the target cost with the help of a multi-disciplinary team. This cost system is oriented toward the customer which is the most important shareholder in any organization, here the customer requirements together with the target profitability of Nissan, are the primary cost drivers. The very first stage requires market research to determine the customer’ perceived value of the product based in its functions and its attributes (mind-sets to identify design attributes), its differentiation value relative to competing products and the price of competing products. This cost system seems aligned with the plan to obtain the number-one rating in terms of customer satisfaction in the case of Nissan. The implementation of this system contributes to the awareness and empowerment of all employees involved in all stages of the product and incentives......
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