ABSTRACT

This study focused on the examination of the effect of cost reduction on the

profitability of a manufacturing company in Nigeria. specfically, it investigated

the following, effect of effect of cost reduction on the profitability of a

manufacturing company; the cost reduction techniques applicable in a

manufacturing company, and factors limiting cost reduction strategies in a

manufacturing company. Hypotheses were formulated and tested at 0.0] level of

signficance. It adopted the survey research design which include research

question, interview and rating scale were used to analyse the effect of cost

reduction on the profitability of PZ manufacturing company. Data for the study

were sourced through the primary source of data. 47 staff of PZ Manufacturing

Company were studied. The Descriptive and inferential statistics was used as the

analytical tool, the study revealed that there is a sign jflcant relationship between

cost reduction and the profitability of a manufacturing company and that there is

a sign frIcant relationship between cost reduction techniques and the profitability

of a company. Thus, the study conclusively argues that cost reduction ensures the

survival and growth of manufacturing companies by improving the efficiency and

preserving its competitive capability. The researcher relying on the findings

recommended that Manufacturing companies should always reduce cost

irrespective of their state of performance, information should be passed at all

levels to enhance the awareness of those cost reduction techniques; finally, that

Management should give a restricted limit to waste by looking for other processes

where it will be useful to increase the value of the company and thereby reduce

cost.