GETTING TO THE BOTTOM OF THE BOTTOM LINE

Traditional cost management systems typically defeat their own purpose by leading corporations to make decisions that ultimately do not optimize performance. These systems are the foundation for decisions that are made throughout the corporation. In order for organizations to increase performance beyond current capabilities, a new approach is needed that addresses issues such as understanding the true impact of various actions on the bottom line-and eliminating methods that distort numbers and narrow options. Explicit Cost Dynamics (ECD) offers such an alternative, and this expertly written, revolutionary book provides an indispensable introduction to the subject. Informative and easy-to-read, Explicit Cost Dynamics:

? Provides an alternative view and understanding of the impact of costs, actions, and time on the bottom line of a corporation

? Explains how this new theory can lead to an overall profit maximization

? Shows that costs can be considered as either a function of activities performed, as a function of resources expended, or of time

? Shows that the difference between explicit dollars flowing into and out of a company is equal to the rate of change of cash

. . . and much more to help CEOs, CFOs, controllers, cost managers, financial managers, and others involved in the decision-making process improve their organizations' overall bottom lines.



From the Inside Flap

Cost management systems are the foundation for decisions that are made throughout a corporation and therefore have important far-reaching effects. Unfortunately, existing cost management systems typically lead to decision-making that does not optimize company performance. Profit maximization in an organization requires an objective understanding of both profits and costs. This revolutionary book introduces the development and implementation of Explicit Cost Dynamics (ECD), a nonallocation-based cost management system that offers an alternative to traditional cost accounting methods as well as activity-based costing.

By providing decision-makers with the relevant tools and information with which to understand the impact of costs, time, and past, current, and future activities on the bottom line of a corporation, Explicit Cost Dynamics eliminates the ambiguity created by allocating costs-thereby eliminating overbidding, unreliable predictions, and inflexibility. The ECD approach creates a costing system that cannot be manipulated to make performance numbers appear better, is well-suited to "what-if analysis," and is far simpler than allocation-based models.

Written by an expert in the field, Explicit Cost Dynamics shows CEOs, CFOs, controllers, cost managers, financial managers, and anyone else involved in cost management decisions how ECD can lead to overall profit maximization and bring harmony to an organization's numbers-as well as its decision-makers.



About the Author

REGINALD TOMAS YU-LEE currently works as an executive consultant with extensive experience in the areas of strategy, supply chain, information systems, manufacturing operations, procurement, demand planning, new product development, and costing systems. He holds a PhD in mechanical engineering and has worked as an engineer, professor, and president of a company in Dayton, Ohio.

Table of Contents

Limitations of Cost Accounting.

What Is Explicit Cost Dynamics?

Understanding Explicit Cost Dynamics Costs.

Profit Dynamics.

Basic Explicit Cost Dynamics Measures.

Degree of Freedom Management.

Operational Inconsistencies.

Resource and Program Management.

Practical Use.

Implementing Explicit Cost Dynamics.

Index.

( Source : Amazon.com )