MANAGEMENT DECISIONS ON THE OPTIMIZATION OF COST STRUCTURE

Abstract

Transformational processes in the economy are gradually reflected in the rethinking of the main purpose of business entities: from maximizing net profit at the lowest cost of production, to ensuring further production efficiency and competitiveness in the market, due to the degree of satisfaction of increased demands and needs of modern society. The economic justification for production costs is based on the situational problems of resource scarcity and the possibility of their alternative use. The basic principles of cost management in modern conditions of management and establishment of directions for their improvement, optimization of the structure are efficient economic use of enterprise resources, introduction of economic and environmental technologies in production, which leads to lower production costs and will help maximize profits. One of the main tasks of the management apparatus at present is to create such a system of production cost management, which would be able to manage costs at all stages of the production cycle, and also meet the criteria of unity of approaches at different levels of management. The process of making an economically sound management decision by the management of an enterprise exacerbates the existence of irreversible ineffective costs, that is, such costs that have already been incurred in excess of those planned and which cannot be recovered. Since they cannot be obtained back, they should not affect the dilemma of choosing effective economic decisions. Reduction in the value of production costs is ensured by internal factors. Progressive methods of organizing production have a significant impact on reducing production costs. Increasing attention to the production costs of the enterprise is of paramount importance, since the correct estimation of the actual cost depends on the efficiency of production management, and as a consequence will affect the financial result of the enterprise's economic activity. With the advent of new economic methods and approaches, enterprise costs are under increasing managerial influence, and there are opportunities to find more effective ways to optimize and reduce them.