Analysis of Production Costs: An Approach to Decision-Making

Abstract

Due to competitive growth, companies need to have a cost system that allows them to identify all the costsincurred in the production process. Furthermore, it is necessary to know the company's needs and productioncharacteristics for its implementation. That is why the present investigation analyzes the production costs inan Ecuadorian textile SME dedicated to manufacturing and commercializing lingerie for the home. This studyaims to identify a cost model that adapts to the characteristics and needs of the organization, both economicaland productive. The methodology is based on a) organizational knowledge and information gathering, b)analyzing the production costs, and c) establishing the optimal cost model proposal. The findings indicate thatthe textile SME does not have a production cost system that allows timely decision-making. Thus, the studyproposes implementing a cost system for operations since it best adapts to the characteristics and needs of thecase study. Furthermore, this system aims to optimize the entity's internal processes, allowing timely decisionmaking,both strategic and productive.