Extra Credit Econ140 Cost Management and Price Control

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Cost Management and Price Control
Introduction
In all enterprises, effective cost management is the primary measure of accountability, especially for business leadership. Cost management includes a highly effective strategy implementation and also the provision of resources and process discipline that will ensure the highest level of quality, reliability, and productivity at the lowest cost for an organization (Drury 3-10). Through cost management, an organization can effectively plan and control the costs involved in their operations.
The government plays an essential role in a market economy in numerous ways. One of these is by creating price controls on specific products and services. Price controls are a government-mandated maximum or minimum legal price set for particular products and services usually implemented as a means of direct economic intervention (Lauguerodie & Vergara 569-593).
The paper will focus on analyzing cost management and price control. It will also highlight the application of cost management and price control and how they are applied to the economy. It will also outline the manner that the articles presented relate to price control and cost management.
A brief overview of cost management
Cost management is considered one of the most complex tasks in business management as it generally focuses on all the various activities such as collection, analysis, assessment and reporting cost statistics involved in budgeting. Through the implementation of an effective cost management system, a company can control its overall budgeting effectively (Drury 3-10). Additionally, through cost management, an enterprise can optimize its strategic and operational performance.
A brief overview of price control
Price controls that set the maximum prices are price ceilings while those that set the required minimum prices in the specified services and products are price floors. Typical examples of price ceilings are rent controls while on the other end of the spectrum, price floors can mainly be imposed in the agricultural markets (Lauguerodie & Vergara 569-593). This enables effective management on the affordability of these specified commodities and services.
Analysis of the articles and how they relate to cost management and price control
Cost management
The article highlighted the importance of cost management. When budget cuts are necessary for any government institutions, they typically rely on traditional measures for reducing costs which include cutting back on discretionary activities, hiring freezes and reorganization of personnel resources to save on overhead (Chew 1). All these strategies are short-term solutions which could only lead to permanent budget constraints that such organizations may face in the future.
A great solution outlined in the article stated that the generation of cost management strategies that utilize digital tools would make significant changes that can assist government agencies to transform their entire operations (Chew 3). Using a digitally powered next generation cost management strategy would help these federal enterprises streamline their processes and function more efficiently with fewer resources.
Chew (4) stated that...