Research On Dynamic Budget Management Of Cost And Fees Based On The Value Chain

Chemical industry has undergone the change from considerable profits in the beginning to the present transparent price competition impacted by the unprecedented market competition,which left over the problem of cost control limiting the increase of profit.Thus,the solution to control the cost of chemical industry has become a crucial part.The theory of value chain in management has been widely used in other industries to study cost control issues.Although there are many companies using value chain theory to control the cost of suppliers,customer prices and internal manufacturing,they are merely concerned about the static cost control,and compare the results of a certain period with the initial budget to arrive at the data and conclusion lagging behind the actual situation which leads to the inadequate effect of cost control,With the introduction and development of dynamic budget,the theory of dynamic budget management of cost and fees emerged,which helps the corporations to observe and analyze the cost change from a dynamic point of view and receive the timely feedback of solution,reaching the maximum effect of controlling the expenditure and sharing.This article adopts the method of case study research,starting from the value chain,studies the K company's internal and external value chain,and excavates the value-added activities in the entire system,from suppliers to themselves then to the customers.Then,through the theory of dynamic budget management of cost and fees,K company can minimize the cost as well as the comprehensive budget variances.This paper also reached the conclusion that this method can also apply to the other subsidiaries of F group so as to most of the other companies in the chemical industries with certain theoretical and practical meaning.The main thread of this paper is as follows:First of all,through literature review and theoretical basis,this paper studies the research result of value chain and dynamic budget to analyze the present research status.Then,based on the specific circumstances of case company,starting from the value chain theory,value-added links of K company are identified and analyzed with structural analysis to verify the feasibility of the theory of dynamic budget management of cost and fees.Finally,combined with the case study result,corresponding specific implementation and the promotion of the dynamic budget management of cost and fees are proposed,conclusion and inspiration are reached.