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Cost Management for Specific Sectors (Power Sector (Features of Power…
Cost Management for Specific Sectors
Agriculture Sector
Features
Understanding the potential to work collaboratively
Target cost management
Lack of understanding of costs and prices by the farmers
Imbalance of power distribution
Fragmented structure of the industry
Cost Management_Activity Based Costing-Advantages
Faster and more accurate
Enables carrying out a more detailed cost analysis
Adjustable Costing Techniques
Information Technology Sector
IT Organisation's engagement model
4D IT cost optimisation framework
Defining organisation vision
Documentation of the current state
Delineation of target business architecture
Decision : Build v/s Buy
Power Sector
Features of Power Sector
Flexible cost allocation
Distribution loss and inefficiency gaps between generation and consumption of electricity
Continuous growing demand of electricity
In-disciplined consumer
Stakeholders are existing and future consumers, industries, government, regulators , and investors
Continuous network between generators, transmitters, distributors, and consumers
Tariff determination is based upon the rationality to determine the cost incurred at various points of operation
Mostly public sector undertakings closely regulated by government
Limited number of suppliers of electricity
Energy subsidies having direct impact on national treasury affecting long term growth potential of the economy
Application of Cost Management Techniques in Power Sector
Distribution loss and inefficiency gap analysis
Multi-dimensional costing techniques
Developing a flexible cost allocation
Powerful analysis and reporting
For determining prices and regulating tariffs
Electricity Distribution - A Complex Network
Value Chain Analysis
Marketing, sales & service
Storage
Distribution and Metering
Transmission
Generation and Trading
Customer
Key Risks in the Sector
Coal Supply Position
High Capital Intensive