Cost and Profit Driver Research

Banker, Rajiv D.; Johnston, Holly H.

doi:10.1016/s1751-3243(06)02003-7

Cited by 17 publications

(17 citation statements)

References 23 publications

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“…The early papers that introduce the idea of ABC Kaplan, 1988, 1992;Kaplan and Anderson, 2003) remain the most highly cited literature on the topic. From these 50 papers we reviewed in detail three book chapters that provide a thorough overview of ABC implementation (Banker and Johnston, 2006;Davila and Wouters, 2006;Gosselin, 2006), and five articles that addressed identification of cost drivers that we reviewed in detail (Ben-Arieh and Qian, 2003;Gunasekaran and Sarhadi, 1998;Gupta and Galloway, 2003;Schulze et al, 2012;Thyssen et al, 2006).…”

Section: Introductionmentioning

confidence: 99%

Technical note: Option‐based costing and the volatility portfolio

Treville

Cattani

Saarinen

2017

J of Ops Management

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It has been clearly established that a cost premium for responsiveness may be justified for profitable time‐sensitive products, and that this cost premium may suffice to render production in a high‐cost environment competitive. Time‐insensitive products considered in isolation seldom justify a cost premium, leading many decision makers to conclude that their production does not belong in a high‐cost environment. This leads to a manufacturing‐location decision in which profitable and time‐sensitive products are produced in a high‐cost environment and time‐insensitive products are transferred to a low‐cost environment. Responsiveness, however, requires a capacity buffer that provides the option to meet a demand peak for a profitable, time‐sensitive product. Leftover capacity can then be ideally deployed to manufacture time‐insensitive products to stock. We propose that the cost of the capacity buffer be considered as an option cost and assigned to the time‐sensitive product: “option‐based costing”. We then demonstrate use of demand volatility to create a portfolio of products that are time sensitive and insensitive to generate profit and increase competitiveness. Option‐based costing combined with a volatility portfolio reveals opportunities to produce competitively in high‐cost environments that have typically been considered unfeasible.

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Section: Introductionmentioning

confidence: 99%

Technical note: Option‐based costing and the volatility portfolio

Treville

Cattani

Saarinen

2017

J of Ops Management

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“…In this respect, some relevant issues emerge. First, it is necessary to recall that, to date, no unique taxonomy of cost drivers is available (Banker and Johnston, 2007, p. 532). Figure 2 lists three of the most popular cost driver taxonomies in management accounting (Table I).…”

Section: Business Model Design Service-dominant Logic and Cost Driver Analysis: A Research Frameworkmentioning

confidence: 99%

Managing costs by business model: issues emerging from the case of E-Car

Giannetti

Risso

Cinquini

2016

MBE

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Structured Abstract:\ud Purpose\ud The aim of this paper is to explore the managing of cost drivers by business model design. Particularly, we explore the link between business model and cost driver analysis when a Service Dominant Logic perspective is adopted. The empirical domain addresses the automotive industry, in particular the dynamic and complex scenario of electric cars, in which many actors are involved and several marketing and technological aspects are still unclear. To date, the wide diffusion of e-cars is delayed by several reasons, one of which is the relatively high cost of batteries. No significant technological improvements are foreseen any time soon to make e-cars economically sustainable for carmakers and end users managing the cost barrier could be a solution for boosting demand. The paper explores whether and how the business model design could be a way to face the problem of high cost of batteries, namely (a) how SDL could support BM design when cost is one of the main barriers for BM viability and (b) how cost driver analysis and BM design are linked when the SDL perspective is adopted.\ud Method\ud This paper analyzes secondary data and findings collected by interviews performed with managers belonging to the automotive sector.\ud Findings\ud The results show that business model design could be a solution to address cost problems and cost driver analysis may play a role in formulating a business model economically sustainable. Splitting a product into a “package of services” can provide direction for research of alternative business model design in the attempt to manage the impact of cost drivers and pursue economic sustainability.\ud Originality\ud This paper explores a topic not yet focussed in cost management research, i.e. the link between business model and cost driver analysis adopting a Service Dominant Logic perspective

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“…Assim, tendo em vista as desvantagens dos métodos tradicionais, tidos como ineficientes, devido à alocação dos custos por meio de cost drivers baseados em volumes, o custeio baseado em atividades (ABC) é projetado para fornecer informações mais precisas e servir de apoio à tomada de decisões dos gestores. Neste sentido, pela complexidade da produção e a necessidade de cost drivers não relacionados ao volume, o ABC amplia os métodos tradicionais, conforme o framework de Kaplan e Cooper (1988a), apresentando os cost drivers não unitários, conhecidos na literatura brasileira como direcionadores de custos (Banker & Johnston, 2007;Cooper & Kaplan, 1988a;Kaplan & Cooper, 1998b).…”

Section: Introductionunclassified