Price elasticity of demand and capacity expansion features in an enhanced ABC product-mix decision model

In recent years, activity-based costing (ABC) has become a popular cost and operations management technique to improve the accuracy of firms’ product or service costs in order to help the firms stay competitive. Since the product-mix decision is an important ABC application, most studies in the ABC literature were generally focused on the effect of ABC analysis on the product-mix decision or product cost calculation. However, these studies usually ignored some important factors, such as: capacity expansions, management's degree of control over resources, purchase discount, and change of product's price. Hence, in this paper, we consider these factors to propose a more general model. This model can help managers to make a product-mix decision and identify excess resources so that managers can redeploy them to optimise resource usage. Furthermore, since previous studies did not consider the impact of price changes on product-mix decisions, this paper also examines the impact of reducing product price with different price elasticity of demand (ε ^D) on the simulated company's profit.     

A fuzzy goal programming approach for green supply chain optimisation under activity-based costing and performance evaluation with a value-chain structure

Supply chain operation with sustainable consideration has become an increasingly important issue in recent years. However, the decision framework with integrated costing and performance evaluation for green supply chain (GSC) has not been well developed so far in the literature. For this reason, this paper is aimed to propose a fuzzy goal programming (FGP) approach that integrates activity-based costing (ABC) and performance evaluation in a value-chain structure for optimal GSC supplier selection and flow allocation. The FGP approach is particularly suitable for such a decision model which includes flexible goals, financial and non-financial measures, quantitative and qualitative methods, multi-layer structure, multiple criteria, multiple objectives, and multiple strategies. An activity-based example of structural GSC with relevant costs and performances is presented for computing the composite performance indices of the GSC suppliers. A green supply chain of a mobile phone is used as an illustrative case. Several objective structures and their results are compared. The sensitivity analyses show that pure maximisation of financial profit can achieve the highest profit level, which also has the largest Euclidean distance to the multiple aspiration goals. In order to determine the final objective structure, an analytic hierarchy process (AHP) is used. This paper provides a new approach to assess and control a complex GSC based on value-chain activities, and obtain a more precise solution. The establishment of this GSC model not only helps decision-makers to monitor GSC comprehensive performance but also can facilitate further improvement and development of GSC management.     

An ABC-based cost model with inventory and order level costs: a comparison with TOC

Activity-Based Costing (ABC) was developed to address the deficiencies of traditional accounting systems in the modern business environment by helping managers understand product and customer profitability and identify priority areas for process improvements. In this study, activity-based costing (ABC) concepts are integrated with a Mixed Integer Program (MIP) for order management and profitability analysis in the case of a firm facing demand in excess of capacity. The model considers unit-level, batch, and order-related costs within a mixed-integer programming model representing the firm's operating structure. The performance criterion of profit and service levels during the 20-period planning horizon is used for model evaluation in a comparison with the results from a Theory of Constraints (TOC) formulation. The analysis of these competing models will provide guidelines for applications of order management models with simultaneous consideration of production planning and profitability analysis, as well as help managers understand product and customer profitability, and identify priority areas for process improvements. The results indicate that the ABC-based model is more effective in increasing profitability and reducing inventory levels when compared with the TOC-based formulation, making better use of overhead cost information in the selection of orders.     

一种面向可重构ERP系统的作业成本法

在对传统企业资源计划(ERP)中的成本方法和传统作业成本法的缺点进行分析的基础上,提出了一种面向可重构ERP系统的作业成本法.该方法建立在广义工作中心的动态可扩展结构基础之上,由将企业资源消耗分配到基本工作中心、将基本工作中心资源消耗分配到作业、将作业资源消耗分配到成本对象以及各级广义工作中心成本滚加计算等四个步骤组成.该方法继承了传统作业成本法面向过程的特点,能够支持过程重构驱动的ERP系统企业内和企业间重构,实现了最大程度降低过程结构成本.算例表明,与传统制造成本法和作业成本法相比,该方法能够为可重构ERP系统提供更有效、准确和集成化的成本信息和决策支持.     

Using activity-based costing to evaluate capital investments for green manufacturing systems

The purpose of this study is to assess how an activity-based costing (ABC) system can assist the justification of capital investments for green manufacturing systems (GMSs). We provide an investment decision model and a numerical example for the justification of GMS based on the ABC system to include not only the direct performances but also the intangible benefits that are generated by the adoption of GMS. Our findings provide insight into the value of capital investments for a GMS based ABC system and demonstrate the opportunity to reduce pollution while simultaneously improving the value of investment.     

Selection of management accounting systems in Just-In-Time and Theory of Constraints-based manufacturing

In today's competitive business environments, a firm's long-term survival rests heavily on its ability to sustain manufacturing superiority over its competitors. To provide the firm with detailed guidelines for sustaining manufacturing superiority, this paper examines the impact of different management accounting systems, manufacturing control systems and time horizon on manufacturing performance in an enterprise resource planning integrated environment. These management accounting systems include traditional costing, activity-based costing and throughput accounting. The manufacturing control systems include Just-In-Time- and Theory of Constraints-based manufacturing. Through a series of simulation experiments, it was found that activity-based costing provided higher short- and long-term profit, better customer service and lower work-in-process inventory than traditional costing and throughput accounting in situations where firms have high overhead costs and relatively low labour and material costs, while carrying ending inventories because of demand uncertainty. Traditional costing also outperformed throughput accounting by exploiting the real-time information sharing capabilities of an enterprise resource planning system. Just-In-Time manufacturing outperformed Theory of Constraints with respect to short- and long-term profitability, customer service, and work-in-process inventory because of differences in buffer inventory policies and sequencing rules. However, time horizon and its interaction with management accounting systems had no impact on the manufacturing performance. In addition, the results suggest that a management accounting system that depicts the manufacturing process tended to provide more accurate product cost information and resulted in a better system performance than the others.     

ABC法的应用现状及其成功实施的条件

介绍了业务量成本法（ＡＢＣ法）的实施现状，分析了影响ＡＢＣ法应用的几个因素后，提出了成功实施ＡＢＣ法必须具备的条件。     

基于制约的时间管理理论研究

针对作业成本法和制约理论的缺陷,同时利用二者的互补性,提出了基于制约的时间管理理论。在决策方面,该理论结合了作业成本法与制约理论的优点,通过分析特定环境下系统的时间、成本与现金收益之间的关系进行决策。在持续改善方面,该理论以制约理论为基础,结合作业成本法的作业分析技术以合理确定制约并对制约进行分类,通过对不同类型的制约采取不同的步骤以实现持续改善：对于非稳定制约,应采取措施尽快提升制约,使之发生转移;对于稳定制约,应在提升制约的同时,使非制约的行为服从于制约。     

基于TOC的业务外包决策模型研究

建立了业务外包决策问题的数学模型,阐述了标准约束理论下业务外包决策过程,指出了多瓶颈情形下标准TOC方法的不足,提出了集成作业成本法的改进模型,较好地解决了多瓶颈问题,分析了新模型制定短期决策和长期决策的侧重点.实践证明,新模型制定的业务外包决策比标准TOC方法模型更合理有效,企业获取的利润更大.     

Activity-based costing in flexible manufacturing systems with a case study in a forging industry

The objective of this paper is to apply the activity-based costing (ABC) approach together with traditional costing (TC) for parts costing in flexible manufacturing systems (FMS) with the A(2) level of automation. We propose a new model for the implementation of ABC using the product cost tree concept. First, the required resources and activities for each part are recorded, and then their costs are calculated using the appropriate cost formulae. This model was applied in a forging industry. A comparison and analysis between ABC and TC was then carried out based on the computational results obtained from the case study. The results indicate that the ABC outputs are more reliable than the TC outputs, and thus the ABC approach is a more acceptable tool for parts costing in FMS.     

Activity-based framework for cost savings through the implementation of an ERP system

Although enterprise resource planning (ERP) has been widely adopted since its first appearance in the early 1990s, there is a lack of research regarding ERP investment justification and performance evaluation. In this paper, based on an activity-based costing (ABC) analysis, we propose a framework to quantify the cost savings that the implementation of an ERP system should achieve in order to make the investment justifiable. Exploiting the ability of ABC to trace costs to activities and products, ERP resource costs and activities are identified and the cost structure of products is analysed. It is also shown that the ABC approach can enhance the visibility of business processes with various activities and cost drivers and provide information about actions to be taken to raise profits by cost savings or increased revenues. Finally, a numerical example is used to demonstrate how an ERP system is utilized on activities and how it affects the cost of products. An extensive analysis follows to address how the results can be used to direct process improvement toward corporate goals.     

Activity-Based Costing in Small Manufacturing Companies—The Theory/Practice Gap

ABSTRACT

Activity-based costing (ABC) has become popular and has been successfully implemented by several large manufacturing companies. However, no studies have been reported on the use of these costing systems in small companies. We report the results of a survey conducted to study the applicability of ABC in small manufacturing companies in Missouri. Information received on existing costing systems, production processes, level of automation, and interest in adopting ABC revealed a large theory/practice gap among Missouri's small manufacturing companies.     

Improving cost effectiveness in an existing product line using component product platforms1

Previously, we introduced a new method for improving commonality in a highly customised, low volume product line using component product platforms. The method provides a bottom-up platform approach to redesign family members originally developed one-at-a-time to meet specific customer requirements. In this paper, we extend the method with an activity-based costing (ABC) model to specifically capture the manufacturing costs in the product line, including the cost associated with implementing a platform strategy. The valve yoke example is revisited in this paper, the customised ABC model is defined, two design strategy alternatives are addressed, and the new method is used to determine which alternative is better at resolving the trade-off between commonality, total cost, and product performance. The proposed method shows promise for creating a product platform portfolio from a set of candidate component platforms that is most cost-effective within an existing product line. The proposed method allows for arbitrary leveraging as it does not rely solely on the traditional vertical, horizontal, or beachhead strategies advocated for the market segmentation grid, and this is especially beneficial when applied to an existing product line that was developed one-at-a-time time such that artefact designs are inconsistent from one to another.     

Fuzzy Time-Driven Activity-Based Costing

Abstract:

Activity-Based Costing (ABC) method is a well-known costing/accounting system. It is an alternative to traditional accounting systems in which business overheads are allocated in proportion to activity's direct costs. Kaplan and Anderson proposed the second generation of the ABC system, called “time-driven activity-based costing” (TDABC), which seeks to resolve some of its drawbacks. The TDABC approach is mainly based on the time drivers spent on cost pools; however, TDABC poses some difficulties in calculations of the assigned costs. Unavailability of accurate and reliable time drivers, variety of time drivers, difficulties of collecting and updating data through calculation procedure, and huge volume of data are some examples of the difficulties. In this article, via utilizing the triangular fuzzy number (TFN), a novel mechanism for the TDABC system is proposed. We employ fuzzy logic to estimate inputs required for TDABC, namely, the required time to perform each activity and practical capacity. Our proposed approach highlights deviations caused by deterministic estimates in TDBAC and makes our estimates more realistic. In addition, sensitivity analysis can be conducted with our proposed approach. Finally, all plausible conditions ranging from the worst case to the best case can be considered; therefore, insightful and appropriate managerial decisions can be made.     

Effective activity-based costing for manufacturing enterprises using a shop floor reference model

The accurate evaluation of production costs has become absolutely essential for companies today. Over the past few decades, the ABC method has offered a solution for allocating indirect costs using the cost driver concept. However, the activity-based costing method does not propose general criteria for identifying the relevant resources, activities and cost drivers on the shop floor. This article proposes a reference activity model that enables the activities and resources related to most of the cost objects of a particular shop floor to be deduced systematically. An industrial application illustrates the use of this model. The value of this approach is also discussed.     

New integrated model to estimate the manufacturing cost and production system performance at the conceptual design stage of helicopter blade assembly

This paper describes a new integrated model development to estimate the manufacturing cost and production system performance at the conceptual design stage. A fully automated conceptual framework for design for manufacturing (DFM) has been developed. An integrated product process design concept using activity based costing is applied in this paper. The new integrated model consists of four sub-modules: the geometric parameters generation module, processing time estimation module, activity based costing (ABC) module and production system performance module. All of the input-output data flows of developed modules are fully integrated for automated manufacturing cost analysis and production system performance. A developed integrated model is very useful for designers or integrated product development team to make a decision for evaluating the design alternatives and trade-offs between design and manufacturing phases at the conceptual design stage. A case study for a composite helicopter rotor blade is included.     

商业银行成本领先战略与ABC法

当前我国商业银醒所面临的竞争日趋激烈,针对作业成本法在商业银行推行后,在帮助管理者获得更为详细准确的成本信息、找出并消除非增值作业、实现商业银行的成本领先战略方面的重要作用进行了有益的探讨,以期对我国商业银行成本管理体制的改革提供参考。     

应用作业成本法的模糊EPQ模型

应用作业成本法,研究了库容有限且缺陷产品可修复的经济生产批量问题。考虑企业自身库容有限及缺陷产品可修复,在系统中存在多个模糊参数的情况下,建立了一个基于作业成本法的模糊期望值模型,通过求解该模型确定出最佳生产批量和最大缺货量。最后的数值例子说明了所建模型是有效可行的。     

A multi-objective optimisation approach for order management: incorporating activity-based costing in supply chains

Most of the supply chain order management decision making models proposed in the literature are based mainly on the material flow and capacity constraints without any consideration to the profitability factor. In this paper, we develop a multi-objective mixed-integer programming (MIP) model which considers profitability in order to effectively manage order acceptance decisions in supply chains, subject to capacity constraints by using activity-based costing (ABC). While there are a numbers of decision-making models in literature integrating ABC in supply chains, this study expands the previous models with a more customer-oriented approach. The proposed model fulfils a desirable amount of orders completely and accepts selective number of orders partially with an objective of minimising the amount of residual capacity and increasing the profitability.     

作业成本分析法在BPR中的应用研究

本方法是应用作业成本分析法(ABC法)解决目前企业在业务流程中存在的问题,但又不是严格遵循ABC法的计算方法,而是从产品是否增值的角度来分析业务流程中的作业及其动因类型,及应用ABC法进行业务流程重构(BPR)的方法。结合具体企业案例,运用ABC法对该企业的采购、销售及库存等物流业务流程进行了重构。结果表明,ABC法具有简化业务流程、提高业务流程运作效率和降低成本的作用。案例分析可为实施BPR的企业提供参考。