Improvement of the costs and quality in project management.

Croitoru, Ana-Maria ; Avramescu, Valeriu ; Craciunoiu, Stefan 等

1. INTRODUCTION

On the international market all projects that have low cost and maximum efficiency are in request.

The concept of life-cycle costing or LCC consist in "accumulation of the activities costs which come during the entire life-cycle if the product, from design until its abandonment by the manufacturer and by the consumer" (Berliner & Brimson, 1988).

The cost design for a product is made using the target-costing. On this line are necessary to be remembered the next elements of knowledge and design.

Target-costing method goes in a strategic managerial demarche of the products, within the cost bearer is analyzed during its life-cycle and especially in the design stage.

The calculation matrices for target-costing are the engineering value such as Lawrence Miles defined it in its paper "Techniques of the analyses and value engineering" which underline: "Without the determination of the involved costs, the decisions would never be able to allow the realization of the adequate value". So, to be efficient, the interest can't be limited only to the values production from the technical and economical point of view, it must be taken in consideration the product functions in terms of the involved cost in the condition of a given cost. In a general conception, as it stand from L.W. Crum paper, "The value engineering consist in a series of systematic products, orientated to the realization of necessary functions with minimum cost, without losing sight of the quality, efficiency, performance and delivery" (Barringer et al., 1996).

One of the main properties of the evaluation system by costs of the project is given by the necessity of given to the client of well manufactured product, superior quality and accessible costs.

Some projects are expensive, with moderate durability coefficients which must be improved to have costs as lower as possible with a efficiency as higher as possible. On the international market all projects that have low cost and maximum efficiency are in request.

Related to value engineering, target-costing is a formal demarche orientated to the functional analyses of the value-price-benefit-cost ratio. Analyzed as a unitary and closed concept of the management by costs, target-costing is characterized by the estimation of values as functions, of the selling prices of the complete costs and of the benefit per life-cycle of the product.

Such a management is characterized by the next characteristics: it will be at the same level during life-cycle of the product; it focus on the costs from the development stage of the product; it bases and uses information of prices about market and starts from the information of costs orientated to the market; it bases on the budget of the product functions; the base of evaluation is represented by the complete costs.

Discussed as a managements demarche, target-costing are based on the rule that the market is making the sell prices and not the companies costs. So, to make the profitableness must go to the cost price, taking in consideration the fact that from selling price must be cut the desire margin to deduce the target-costing (Bouquin, 2004).

In the same time, because the market is nu interested by the structure of the fix and variable costs or in direct and overhead expenses, it is necessary to cover on long term all companies' costs. Under these circumstances, the sell prices of the product must cover all cost and the profit.

Planning phase during which the objectives and modalities of action of the organization, in terms of getting results and performance products able to satisfy customer demand .Make stage is implemented in processes that are planned Verification includes system monitoring, assessment and reporting processes, outcomes, objectives and requirements of product. Plan of action-it is the phase in which elaborates and implements strategies to continue imbunatirea performance process. Effectiveness of activity-based process that receives input data and converts the data in the output, consists in identifying and managing interrelated processes. In this sense approach based on the process should include identification, especially management of interaction processes. Importance of establishing policy and quality objectives in any organization, policies and objectives are able to provide a pointer to guide the market profile due role in managing resources and obtaining results.

As can be inferred, the relationship between policy objectives and is a direct and biunivoca. If the policy of quality within an organization provides a framework for setting and reviewing goals, the latter must follow a consistent policy in the set, but with imposed condition and improvement.

Doing like that, are found and solved problems and special interests, possible conflicts between objects are found in time, and on this way are avoided future costs necessary to modify because of the delays in promoting the product on the market.

2. DELIMITATIONS AND BACKGROUND

It is said that Japan industry has its competitive on international market due to a way of thinking orientated towards (Calin & Caraiani, 1997).

The acquisition cost is the only value well known and indentified in the structure of the life-cycle cost, but is only superficial information. The structure of the majority of the other costs associated to the life-cycle costs for the equipment or systems is full of incertitude. LCC is, from the procedural point of view, an evaluation method, based on hypothesis. As well as all known evaluation techniques, hypothesis can lead to the important cost growing, if are not used also logic reasoning.

Some of the limits of the LCC method (Epuran et al.,1998): LCC is not a precise science, anyone can have different answers and these one are not true or fall--are only acceptable or not acceptable;

The LCC results are only estimations and can't be ever more precise than the input data and the intervals used within estimation--particularly, this thing is true for cost-risk analyses;

The LCC estimations are not precise. The precision errors are hard to measure because the variations taken by statistic methods are usually big;

LCC methods are good with limited data base and the data acquisition regarding the logistic and exploitation is very hard and very expensive;

LCC cost models must be calibrated in order to be true;

LCC models need big quantity of data, but usually there are only small quantity of data and most data aren't reliable;

LCC needs scenarios for: the way the money spending model will be made for equipment acquisition, the way the model will grow up during using, the way defects will appear, the way reparations and replacements will be made, the way the evaluation procedures will work for different costs (the design cost, work cost, materials cost, the parts wear, replacement parts cost, the shipping cost, the maintenance cost), for each time period, the way the model will be used for a period of a few years, how many parts will be manufactured / sold and other similar details need to make the cost scenarios; the most details need major extrapolations, and getting data is difficult;

The LCC methods made by sellers and cost models of holding (COO), made by the final sellers, have low credibility, because of the using of some different values for each model.

The results of the LCC analyses are useful as instrument of compare / limitation of the budgets and the production of good LCC results can be done only by working in team, because is necessary a sum of specialized expertise.

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3. CONCLUSION

We can say that the size of the end life cost is measured by appealing to the residual value.

The residual value is an estimated value which can be obtained by a company from selling the product, after cutting the estimated selling price, respective the estimated value that can be recovered from cassation or using a product.

According to historic costs, the residual value can be defined as being the estimated value of the product in dollars, at the present value of the dollars (without taking in consideration the inflation), at the end of the life-cycle of the product. The residual value must be calculated taking in consideration the net value of any costs with estimated assignation. In some cases, the actives will have a negative residual value, such as, for example, when it is possible that the entity to realize costs for assignation of the active or for bringing the product to a previous stage, like in the case of some operations, like retreat from mines, which suppose the environment protections or other laws. In these situations, the period decreasing must be a higher value than initial cost of the product, in such a way that, when the product is transferred, to be signed on an estimated debt equal to the negative residual valued. The residual value is, like other aspects of the depreciation method, under an annual evaluation (Fabrycky & Blachard, 1991).

If was chosen the method of re-evaluation for measuring the corporate immobilized actives, the residual value must analyzed each time the active is re-evaluated. This thing is made using the dates regarding the possible value for similar actives, which ends the life-cycle at the re-evaluation time, after there were used in similar goals like the active that is analyzed. One more time, can't not be taken in consideration the anticipated inflation, and the future value can't be considered like updated value for knowing the money value in time.

Like for accounting based on the historic costs for companies actives, if the negative residual value is anticipated, this must be known efficient during life-cycle of the active, taking in consideration the supplementary depreciation, in such a way that the estimated debit to be assumed until the assignation moment.

4. REFERENCES

Alazard, C. & Separi, S. (1998). Controle de gestion, Manuel Applications, The fourth Edition, Paris

Barringer, H.P.; David, P.E. & Weber, P. (1996). Life Cycle Cost Tutorial Fifth International Conference on Process Plant Reliability, Houston, Texas

Bouquin, H. (2004). Accounting management. TIPOMOLDOVA Editure, Iasi

Calin O. & Caraiani C. (1997). Calculation method as the method of accounting, The Finance Magazine

Crum, L.W.' Value engineering

Epuran M., Babaifa V. & Grosu C. (1998). Accounting and management control, Economical Editure

Fabrycky, J. & Blachard, B. (1991). S'Life-Cycle Cost and Economic Analysis, Prentice Hall