ABSTRACT

This study focused  on the examination of the effect of cost reduction on the profitability of a manufacturing company in Nigeria.  specifically, 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 wereformulated and tested at 0. OJ  level of significance. 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 significant relationship between cost reduction and the profitability of a manufacturing company and that there is a significant 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/or other processes where it will be useful to increase the value of the company and thereby reduce cost.