Shelf-
Customer
Ordering
Delivery
stacking
support
Question 14.21
DKr 4,680
DKr 7,626
DKr 5,922
DKr 8,919 Question 14.22 (Kaizen)
4,661 7,595 5,899 8,869 The kaizen budget numbers will show unfavourable variances for managers whose activities do not meet the required monthly cost reductions. This is likely to put more pressure on managers to creatively seek out cost reductions by working better within
Nyborg Supermarkets or by having better interactions with suppliers or customers. One limitation of kaizen budgeting, as illustrated in this question, is that it assumes small incremental improvements each month. It is possible that some cost improvements arise from large discontinuous changes in operating processes, supplier networks or customer interactions. Companies need to highlight the importance of seeking these large discontinuous improvements as well as the small incremental improvements.
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