Estimating Purchasing and Cost Control Essay Example | Topics and Well Written Essays - 1750 words

Estimating Purchasing and Cost Control - Essay Example Cost management is an integral part of financial control and management in any for profit and non-profit organisation, notwithstanding the industry or sector. The same applies particularly to the engineering and construction sector in which the huge amounts of financial and other resources pumped must be accounted for to stakeholders such as the government, project funders and the public/customers.Unfortunately, for various reasons, many countries’ construction sectors lag behind in the use of cost control techniques such as the Cost Value Reconciliation (CVR) and Earned Value (EV), two rather common methods of cost control. Many a stakeholder cites the technical skills and the huge resources required as the reasons many constructions firms and financial managers do not apply CVR in their cost control practices. Most affected by the cost and skill requirements of CVR and other cost control techniques such as CVR and Earned Value (EV) are the small and medium-sized construction and engineering firms that lack the wherewithal to design and implement these techniques of cost control. The other reason for the little use of cost control techniques such as CVR and EV is the apparent lack of literary coverage and information on these methods, implying that stakeholders are not quite conversant with the metho.Nonetheless, these methods are generally used in the construction and engineering industry to measure and monitor project progress, profitability and performance for their strengths. One advantage of EV is that it is capable of combining the assessment of work cost, schedule and scope in a single integrated process or system. What is more, Earned Value gives accurate information and forecasts on project problems, which are important contributory factors in project management. EV has been shown to affect project planning and control aspects more even as it improves project scope and the analysis of project performance. EV is thus a positive predictor of proj ect success. The popularity of EV is evident in the many government contracts that are assessed using this method, more so in its application to assist substantiate contract disputes. This paper explores the use of cost control methods such as the Coat Value Reconciliation (CVR) and the Earned Value (EV) with regards to their effectiveness in providing information on costs, in the monitoring work progress, their benefits, ease of use, advantages and disadvantages. Practicing CVR and EV The importance of using these cost control methods in the construction and engineering sector is the uniqueness and the uncertainties that characterise each project. In fact, every project in the industry has its own set of challenges and hardships that affect not only their successful completion but also their effective use of the available resources. The uncertainties inherent in construction projects result in losses and ultimate project collapse even for big, long-established, sophisticated and fi nancially endowed constructors (Potts, 2008). With more sophisticated structures being ordered by clients every other day with the budgets getting tighter by the day, construction firms must embrace cost control and sound finance management to achieve their objectives. Just like any other cost control measures, CVR has several core elements or principles by which it is successfully applied to give the required data. Important in CVR are the totals for cost and value, which are crucial in establishing a firm’s profitability (Sidwell, 2005). In this regard, CVR’s major objective is to achieve accuracy while displaying a firm’s accounts. CVR’s display of financial accounts and position is thus among the most accurate compared to other methods. It is thus quite apparent that CVR seeks to portray a firm’s statutory accounts as a legal obligation (Sidwell, 2005). Additionally vital is CVR’

Manufacturing in China and its environmental impacts Essay

Manufacturing in China and its environmental impacts - Essay Example The automotive industry played, and continues to play, a key role in this concept. The Volkswagen Group has set up two joint ventures for the manufacture of automobiles in China. While the Shanghai Volkswagen success story began in 1984, the contracts for FAW-Volkswagen were signed in the northern Chinese city of Changchun in 1990. In January 2003, another joint venture, this time producing gearboxes, began operations in Shanghai. This was followed in 2004 by a joint company for manufacturing powertrain components. Two further joint ventures for modern engines started production in 2006 and 2007. Data suggest that there is a constant steady growth during the time of study, except between the years 2001 and 2002. Primarily, the reason for this is that China has become a member of the World Trade Organization in 2001. As the sales performance shows, the Volkswagen Group has gained full advantage of this opportunity. The data clearly suggest continuous growth of product sale from 1999 to 2006; however, the market share has been reduced from a peak of 50% to 17.1% in 2006. The tendency of decrease in market share is expected, mainly due to the current and anticipated burgeoning growth of automobile ownership in China. Toyota has grown to become a large multinational corporation from where it started. It has expanded to different worldwide markets and countries by becoming the largest seller of cars in the beginning of 2007 and the most profitable automaker in 2006 with increasing sales in the world. Toyota has long been recognized as an industry leader in manufacturing and production. In retrospect, Toyota Motor Company Limited (currently Toyota Motor Corporation) was established in 1937 and started to export automotive to China since 1964. It founded Toyota Automotive Services Centre in Beijing and the Technical Support Centre in Tianjin in 1980 and 1990, respectively.