A note on a new method of cost allocation for combined power and water desalination plants

The consequences of two different methods of allocating pharmacy costs per patient case were studied. The study was conducted using cost data from Sunnybrook Health Science Centre (SHSC), a 1205-bed teaching hospital in Toronto, Canada. A sample of the 1991-1992 cases for the three case mix groups (CMGs) with the highest total pharmacy cost and the three CMGs with the highest pharmacy cost per case were examined. Information was obtained from patient records and used to produce two sets of data: pharmacy prescription unit costs and pharmacy costs per case using the relative value unit (RVU) method, and pharmacy prescription unit costs and pharmacy costs per case using the workload measurement system (WMS) method. For each case, the difference between the RVU and WMS pharmacy costs was determined. The RVU method consistently produced higher pharmacy costs per case for the CMGs with the highest pharmacy cost per case. If these CMGs are typical of other CMGs with high pharmacy costs per case, then case reimbursement based on the WMS method of cost allocation would result in underfunding of hospitals whose case mix has a high proportion of CMGs with high pharmacy costs per case and overfunding of hospitals whose case mix has a high proportion of CMGs with low pharmacy costs per case. However, the RVU method of cost allocation, although it appears to be more accurate, places a greater data collection burden on pharmacy managers. The RVU and WMS methods of pharmacy cost allocation gave significantly different pharmacy costs per case for the six CMGs studied.

Cost allocation of electricity and water in a cogeneration plant

Although the cost allocation method does not change the total benefits of CHP, the use of various cost allocation methods generally results in significant differences in costs allocated for CHP products. In order to overcome the inadequacy of existing cost allocating methods in theory and in practice, according to the different roles of anergy and exergy in heat supply process of CHP plant, the reduced exergy method for cost allocation is formulated by introducing the concepts of the available anergy and reduced exergy. The contribution of the available anergy is expressed with a user factor, which can reflect different utilization for different practical conditions. Some practical conditions for typical CHP units are computed and compared with existing methods. Calculations show that the cost allocation by using the reduced exergy model is more rational and practical than those by using existing models in terms of embodying the physical meaning.

Managers need information to fulfil their responsibilities. These information needs may be financial in nature or they may involve nonfinancial data such as number of hours worked, product or service throughput time, or units of product produced and sold. All management decisions should be supported by analyses of alternative courses of action. The management accounting is expected to supply the information for such decisions. One important reason for having a management accounting system is to determine the cost of manufacturing an individual product or batch of products. Such management accounting differ widely from one company to another, but each system is designed to provide information that management believes is important. In the past ten years, a growing body of academic and profession opinion hold the view that the traditional system of assigning overheads provides distorted costing. This arises due to the simplistic definition of fixed and variable cost and the recover of overheads based on broad apportionment bases often on volume based, e.g. payroll costs. In this article one new method of costs allocation is suggested.

This paper reviews the main characteristics of the provision of urban transit systems in Cairo, namely buses, minibuses, river buses, trams and surface metros, all being currently operated by Cairo Transport Authority (CTA). It presents some generic types of indicators to compare and assess the performance of the five main urban transit systems provided by CTA. The CTA budget plan for the Financial Year 96/97 is reviewed. The absence of any form of cost modelling as an integral part of CTA budget plans is identified. Here, an attempt is made to develop cost models for the main urban transit systems operated by CTA. Four generic approaches for estimating cost models for transit services are comparatively reviewed, namely the causal factor, cost allocation, regression and temporal variation methods. Cost allocation methods are particularly applied in this research to estimate different cost models for the main transit systems operated by CTA. These models are meant to assist in predicting and showing the relative magnitude of expected changes in various cost categories, resulting from systems/services expansion or down-sizing for the transit modes operated by CTA. The development of such models is thought to contribute in raising the cost consciousness in CTA with the ultimate benefit of maximizing system efficiency.

The article is devoted to the analysis of methods for assessing the financial parameters of strategic innovation cycles in construction companies, in particular using the concept of "Method of cost allocation by activities". In the conditions of constant changes in the construction market, in particular the introduction of innovations, it is important to ensure effective assessment of financial indicators, which contributes to increasing the stability and competitiveness of the company. The method of cost allocation based on activities is one of the most effective tools for calculating costs and determining the feasibility of investments in strategic innovations. The article considers theoretical aspects and practical aspects of applying this method to assess innovation strategies in construction companies. The main task is to determine the effectiveness of innovation cycles from the point of view of their impact on the financial parameters of the company. The analysis is carried out through cost allocation, where each activity is assessed based on its impact on the company's overall costs. This approach allows not only to calculate costs, but also to identify areas for optimizing resources and reducing costs. It is important to note that the application of the method allows for a clear understanding of the effectiveness of various strategic initiatives and allows predicting their economic effect in conditions of dynamic changes in the market. The key aspects of the article are the analysis of the use of the concept in construction companies, the advantages of using the method to improve the strategic management process, as well as opportunities for further development and implementation of innovations in conditions of growing competition. The implementation of this method allows construction companies to manage resources more effectively, reduce costs and increase competitiveness. In particular, it is important that the method contributes to better allocation of investments, risk assessment and increased level of management in the processes of implementing innovations. In addition, this method allows for optimizing costs at different stages of project implementation, thereby improving the overall efficiency of construction companies. Thus, the application of this concept not only improves financial results, but also strengthens the company's position in the competitive market.

The selective vehicle routing problem in a collaborative environment

Economic analysis of energy communities: Investment options and cost allocation

Climate change imposes tighter limits on carbon emissions, which require the development of more green electricity. Deep sea wind power has the advantages of high wind energy density, high power generation utilization hours, no land occupation, and near to power load centers for easy on-site consumption, which lead to a broad market prospect. In the foreseeable future, deep sea wind power will usher in large-scale construction and development. The initial investment and construction cost of deep sea wind power is high, subsidies are gradually decreasing, and there is a lack of full life cycle economic analysis combined with various market policies, resulting in a lack of guidance for its investment and construction. In order to promote the development of deep sea wind power, relevant cost recovery mechanisms must be found. This paper proposes a system cost allocation method based on the comparative difference method and load similarity with consideration of the transformation and operation costs of thermal power, demand-side response, and energy storage; a cost allocation method based on carbon trading and green certificate trading income is proposed; and a time sequence optimization operation simulation model is established to maximize the deep sea wind power income. A case study is proposed for a 300 MW deep sea wind farm, the results show that the cost allocation method and cost allocation model proposed in this paper have a significant effect on wind power cost recovery, and the effectiveness of the proposed method and model is verified.

Problems of allocating joint costs in a reasonable way arise in many practical situations where people decide to work together to save costs. Cost allocation methods based on game theoretical concepts take into account the strategic aspects of cost allocation situations. We give a survey of cost allocation methods based on the nucleolus and the Shapley value, and introduce also a new one, the so-called cost gap allocation method which is based on the τ-value. It is shown that for some large subclasses of cost allocation problems this new cost allocation method coincides with old separable cost methods proposed in the thirties by the Tennessee Valley Authority and also with the separable costs-remaining benefits (SCRB) method. Properties of this cost gap allocation method are also treated.

Integrated community energy systems (ICESs) are a modern development of local energy systems by integrating distributed energy resources and local communities. Cost allocation is one of the key issues affecting the success of ICESs. Costs should be allocated to those who cause them, and benefits to those who make the investments. A well-designed cost allocation approach will therefore contribute to a successful implementation and sustainable development of ICESs. This paper presents a general framework for designing cost allocation schemes in ICESs. Various cost allocation methods are proposed to compute the energy bills for local community members in an ICES. In addition, the cost reflectiveness of different cost allocation methods has been computed based on a case study of an ICES to gain insights into how well the costs are allocated. Next to this, the same is also done for the cost predictability to investigate how the energy costs would change in the long term. The results showed that methods with a single energy charging component perform the best in terms of the two criteria. Our assessment can facilitate local community members in selecting a method that satisfies their requirements. Overall, this research contributes to a successful implementation of cost allocation in an ICES.

Cost allocation in a cogeneration plant for the production of power and desalted water — comparison of the exergy cost accounting method with the WEA method

Traditionally, many hospital costs have been allocated to patients using indirect measures that do not always reflect the value of the resources used to provide care. When, for example, costs are allocated by multiplying the patient's charges by the hospital's ratio of costs to charges, the allocated cost does not reflect actual cost because the hospital does not uniformly charge for services in proportion to their cost. The choice of method for cost allocation will be as important for the newly developed case-mix cost-accounting systems as it has been for traditional cost-accounting systems. To illustrate how the use of an indirect cost-allocation method might affect the output of a case-mix cost-accounting system, operating room, radiology and clinical laboratory costs were assigned to 106 hospitalized inguinal hernia patients in two diagnosis-related groups (DRGs) using both the hospital's existing cost-allocation method and a method that measures costs directly. Total costs and the costs in each department were significantly lower in each DRG using the direct method. It was concluded that patients in these two DRGs were being assigned more than the actual cost of their care with the existing cost-allocation method and, therefore, that the existing method prevented the case-mix accounting system from providing accurate management information.

In water resources projects, a cost allocation problem is critical. In this paper, cost allocation methods based on game theory are studied. We focus on the projects with a network, which involves reservoirs, lakes, pipelines and rivers. Water resources development projects with networks have different characteristics from multipurpose reservoir projects. In network projects, the projects by the small number of the members (partial coalitions) may not be feasible. Cost allocation methods need to take the effects from these infeasible coalitions into account. The effectiveness of the weighted Shapley value, the Shapley value using modified cost function, and the network allocation method is compared.

This chapter examines how good (bad) faith behaviour affects cost allocation decisions in international investment arbitration. It first describes the inconsistency in the calculation of costs and legal fees in international investment law before discussing the three methods of cost allocation that are applied in investment arbitration: the 50:50 Rule or sharing of costs; the English Rule, based on the idea that ‘costs follow the event’; and allocation of the costs on a sliding scale based on the court’s consideration of the claims. The chapter also analyses the public and private international law doctrine on cost and fee calculation; the rules used to calculate costs in investment arbitration; the methods used by tribunals in cost calculation; and the tribunal’s application of the principle of good faith to justify power granted under the respective arbitral rules, as well as determine the cost award as a means of sanctioning bad faith behaviour.