The economies in production and operating costs can be achieved by focusing in the following areas:

(i) exploring alternate sources of cheaper raw materials and components.

(ii) negotiating with existing suppliers of raw materials and components for more favourable terms.

(iii) relocating facilities to areas which have lower costs.

(iv) improving capacity utilization to achieve economies in costs.

(v) introducing modifications in production designs to reduce costs.

(vi) improving machine and worker efficiencies.

(vii) re-engineering processes to eliminate activities and bring cost reductions.

(viii) hiring contract workers with the objective to reduce labour costs.

(ix) outsourcing processes/ manufacturing of components to low cost suppliers if quality control measures can be implemented.

(x) adopting efficient inventory management practices such as just-in-time inventory management techniques.