Objective of Process Analysis - Understanding (Business process map)  Understand the interrelationships, as well as the linkages with resources and strategy - Monitoring (Statistical process map)  Establishing key process attributes; and having these variables measured and compared, and taking correction action if required - Prioritising(Pareto diagram)  Identifies critical business processes and to differentiate between value adding and non-value adding; in order to rank improvement of these first. - Problem Solving  Recognises where and why a problem occurs and by suggesting approaches to correct these problems Cost Basics Cost: cash or cash equivalent value sacrificed for goods and services that is expected to bring a current or future benefit to the organisation i.e. dollar measure of the resources used to achieve a given benefit. - Costs should be managed strategically and reduced (efficiency) whilst providing the same or greater customer value - Expenses/Expired Costs: actual costs incurred for a current benefit i.e. to generate revenue  Costs incurred for a future benefit e.g. WIP, unsold inventory - Opportunity cost: benefit given up or sacrificed when one alternative is chosen over another Cost Object: any item for which costs are measured and assigned - Activity: basic unit of work performed within an organisation and can also be described as an aggregation of actions within an organisation useful to managers for purposes of planning, controlling and decision making  Note: an activity is described by an action verb joined with an object that receives the action