Study On The Improvement Of Cost Management Jinhong Company

Abstract：Cost management forms a significant part of business management in theprocess of modern business operation, which is important for enhancing a company’soperating as well as managing level. As a state-owned enterprise, Jinhong CompanyLimited (Jinhong) is different from others on cost management due to its own specialnature. Jinhong is an industrial company that exploits natural uranium throughprospecting, extracting as well as mineral smelting and processing, which leads it to acomplex constitution of producing cost system. At the meanwhile, the physical goodsare not consisted of the raw materials and supplementary materials, moreover,influenced by such elements as safety, technology, environment and resources. Underthe central planning condition in the past, as a producing company, Jinhong heavilyaimed to just finish the uranium producing tasks that superior had set, so the effect ofcost in the process of producing and operating could not be easily identified. However,with the perfection of socialist market economy system, Jinhong shifting itself fromproducing-based company to both producing-based and operating-based company,which indicates that it has not only to meet the requirements of superior on uraniumproducing targets, but also to the benchmark of uranium producing cost. The uniteconomic benefit impacted by certain degree due to the high producing cost ofuranium, which directs it to a severe producing and operating problems. Therefore,Jinhong is required to struggle for improving managerial level and reducing unitproducing cost as much as possible.The essay is based on the cost management theory, supported by questionnairesand theoretic analysis to do the research. Furthermore, draw lessons from relevantbibliography as well as experience that home and abroad, incorporated the physicaltruth of Jinhong to analyze the issue of cost management and provide someimprovement advice.First of all, the essay introduces some relevant theory of cost management, whichoffers theoretical foundation to the following chapters that about issue analysis as well as improvement.Then, by applying questionnaires and actual qualitative and quantitative researchwe conclude that the problems of Jinhong in cost management are as follows:Lack of good organization and management foundationThe ability of lowering cost through technological innovation needs tobe enhancedLack of communication management, which leads to cost informationpassed not freeUnscientific cost forecastCost management is out of control due to ignorance of planning andreviewingImproper measures of cost controlIncomplete cost analysisUnreasonable cost assessmentNext, the essay analyzes the different reasons behind and comes to rationalizedsuggestions after identifying all the problems above.Last but not least, according to the previous analysis of cost management,moreover, taking the needs of future development into account, we advice thatJinhong could improve itself from four aspects, including producing and operatingmanagement, human resources management, cost management regime and costmanagement functions, which would be beneficial for Jinhong’s cost management oncertain realistic significance and practical value.