Nature of Costs in Private Sector

In the private sector, managers have to deal with exchange rate fluctuations, aggressive and increasingly numerous competitors in an ever-expanding global market. As company equipment ages, managers wonder how they can modernize it without negatively affecting customer service and productivity. The ability to determine the consequences of such decisions in advance is thus not only a vital component of managerial decision-making but also confers a strategic competitive advantage. Indirect costs continue to climb as a result of the companys increasing focus on improving the way it manages both itself and its relationships with external partners. All these elements combine to modify your companys cost structure and behavior. All too often, the limitations of conventional cost models prevent the company from seeing the complete cost mix picture.