Using relative profits as an alternative to activity-based costing

Homburg, Carsten

doi:10.1016/j.ijpe.2004.02.002

Cited by 20 publications

(10 citation statements)

References 21 publications

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“…3926/jiem.2086 activities. Thus, it is a model that assigns resource costs directly to cost objects (Homburg, 2005;Kaplan & Anderson, 2007;Kont & Jantson, 2011).…”

Section: Time-driven Activity Based Costingmentioning

confidence: 99%

Application of the TDABC model in the logistics process using different capacity cost rates

Afonso

Santana

2016

JIEM

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Abstract:Purpose: The understanding of logistics process in terms of costs and profitability is a complex task and there is a need of more research and applied work on these issues. In this research project, the concepts underlying Time-Driven Activity Based Costing (TDABC) have been used in the context of logistics costs.Design/methodology/approach: A Distribution Centre of wood and carpentry related materials has been studied. A multidisciplinary team has been composed to support the project including the researchers and three employees of the company responsible for accounting, logistics and warehousing. The design and implementation of the costing model asked for a deep understanding of the different tasks and processes that should be considered. Accordingly, a TDABC model for the logistics function was developed. Findings:The cost model presented here is supported on a series of time equations designed for the logistics function which allow the analysis and discussion of costs and profitability of different cost objects namely, products, clients, distribution channels, processes and activities. The cost of unused capacity and the effectiveness of logistics processes are also highlighted in this model. Research limitations/implications:In a case study, results and implications cannot be directly or immediately generalized. Nevertheless, the proposed time equations and cost model can be -1003-Journal of Industrial Engineering and Management -http://dx.doi. org/10.3926/jiem.2086 easily adapted to explain other types of logistics functions and it gives the foundations or other TDABC models with more than one capacity cost rate. Practical implications:The TDABC model developed in this case study can be used in similar cases and as a basis for the analysis of logistics costs in other logistics processes. Furthermore, managers can rely on the proposed approach to analyze products' profitability and logistics cost structure.Originality/value: In this case, different capacity cost rates were computed in order to reflect appropriately the logistics function which was presented in two different processes: internal logistics and distribution. These processes have specific resources allocated and should be measured differently. This is in line with Anderson (2004, 2007) who have suggested a more complex TDABC model with more than one capacity cost rate for these situations.

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“…3926/jiem.2086 activities. Thus, it is a model that assigns resource costs directly to cost objects (Homburg, 2005;Kaplan & Anderson, 2007;Kont & Jantson, 2011).…”

Section: Time-driven Activity Based Costingmentioning

confidence: 99%

Application of the TDABC model in the logistics process using different capacity cost rates

Afonso

Santana

2016

JIEM

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“…The separability condition has also been studied by Homburg (2005) Finally, the existence of allocative inefficiencies is investigated exploring the decomposition of economic (cost) efficiency into technical efficiency and allocative efficiency. If a firm is allocatively efficient, then technical and cost efficiencies will be the same.…”

Section: Technology Set and Dea Estimationmentioning

confidence: 99%

Scale of operation, allocative inefficiencies and separability of inputs and outputs in agricultural research

Silva

Gomes

2013

Pesqui. Oper.

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ABSTRACT. In this article we consider some properties of concern for research production at Embrapa. We apply statistical tests to address questions related to the scale of operation, the presence of allocative inefficiencies and separability of inputs and outputs. The production process is assessed by nonparametric methods with the use of Data Envelopment Analysis. The period under analysis is 2002-2009. We conclude that Embrapa's technology frontier shows variable returns to scale, is allocative efficient in general and is separable in inputs and outputs. These characteristics justify the company policy of adopting a VRS solution and the aggregation of output variables. Scale inefficiencies are the basis for further input congestion studies.

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“…Although activity based costing (ABC) can lead to a more accurate assignment of overhead costs to cost objects, such as products, than full-absorption systems provide [16,17], ABC still fails to address the significance of the Pareto distribution of product volumes [18]. This is the result of aggregation errors that come from pooling costs in a method that minimizes system complexity [19].…”

Section: Literature Reviewmentioning

confidence: 99%

Investigating impact of the order activity costing method on product cost calculations

Meade

Kumar

Kensinger

2008

Journal of Manufacturing Systems

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Using relative profits as an alternative to activity-based costing

Cited by 20 publications

References 21 publications

Application of the TDABC model in the logistics process using different capacity cost rates

Application of the TDABC model in the logistics process using different capacity cost rates

Scale of operation, allocative inefficiencies and separability of inputs and outputs in agricultural research

Investigating impact of the order activity costing method on product cost calculations

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