Cost Reduction Projects
Some projects can suggest expenditures to improve the efficiency of the machines by adding additional items or by improving certain characteristics of the machine. These projects are cost reduction projects and they need to analyzed using engineering economic analysis.
Industrial engineers are expected to come out with number of cost reduction projects using technologies that claim the cost reduction potential as well as ideas that have cost reduction potential. Lean systems is an idea having cost reduction potential. Lean systems designate certain items as non-value added activities and challenge people to reduce these non-value added activities and reduce cost. Cost of quality or profits of quality system improvement is one such idea. According to it, by redesigning the quality management system, companies can increase profits.
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Income Expansion Projects
Projects which increase production capacity and hence give more revenues come under income expansion projects.
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