Effective cost modeling on the factory floor: Taking simulation to the bottom line

Abstract

A discussion on the effective implementation of cost modeling methodologies on the factory floor is presented. The target audience is industrial and manufacturing engineers who are experienced in simulation modeling and are familiar with manufacturing cost issues. The authors present a wide spectrum of viewpoints which reflect a belief that activity-based product costing more accurately reflects true manufacturing costs than traditional accounting methods. It is pointed out that indirect costs should also be proportioned to products according to burden/activities rather than product mix or other similar indicators. >