Estimation and assessment of cost allocation models for main transit systems operating in Cairo

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.

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.

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.

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.

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.

Expanding electric transmission can facilitate generator interconnection and improve grid reliability. Assigning costs for new transmission infrastructure is highly contentious because these costs can have a direct impact on energy prices and ratepayer bills. In this report, we evaluate what factors influence successful transmission cost allocation agreements. Through a review of legal disputes, existing cost allocation practices, and regional case studies, we identify potential strategies to minimize cost allocation disputes for future projects. The report also highlights the processes by which regions can update their cost allocation methods. While we do not consider cost allocation methods currently under development for compliance with FERC Order 1920, the trends and lessons learned identified in this report can inform discussions on effective cost allocation methods to reduce barriers for transmission development.

The selective vehicle routing problem in a collaborative environment

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.

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.

Economic analysis of energy communities: Investment options and cost allocation

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.

Current cost allocation methods require generating companies (GENCOs) to afford spinning reserve (SR) costs according to their energy production rather than the impact on grid stabilization. The differences in generator reliability and forecast accuracy of renewables cause difficulty in quantifying the contribution of individual factors on the SR requirements (SRRs). First, this paper employs a reliability‐constrained unit commitment (RCUC) model to determine the SRR and SR costs according to the grid reliability. Then, a cost allocation method is proposed to allocate these SR costs based on risk contribution theories. The risk contribution theories, marginal contribution, and stand‐alone contribution are employed to measure the effect of individual risk factors on grid safety. The cost allocation method is demonstrated and discussed in the IEEE‐RTS. The proposed risk contribution method can quantify the impacts of risk factors on grid safety and allocate SR costs into them according to their contributions. Additionally, this risk‐based cost allocation method can encourage GENCOs to enhance the reliability level of generators and continuously improve the forecast accuracy of renewables to lower SR costs. © 2015 Institute of Electrical Engineers of Japan. Published by John Wiley & Sons, Inc.

In collaborative transport, dividing the total cost of the coalition between its different partners is a key issue. However, as each coalition has its own set of preferences and has partners with different characteristics, a cost allocation method suitable in all situations does not exist. In this paper, a set of cost allocation methods, some academic and some used in practice, are evaluated in different situations. We investigate how well these methods behave when partners have different characteristics, e.g., when one partner ships a much larger volume than the others, it is very likely that this partner does not agree to allocate costs according to the volume of each partner. We provide an overview of which cost allocation methods suffice in which situations, showing that a right cost allocation is highly dependent on the characteristics of the coalition.

In this paper we propose an approach to evaluation of the environmental effects of consumption goods. The approach consists of two steps, namely (1) an assignment of environmental effects of different types to the consumption activities, followed by (2) a comparison of the consumption activities with respect to their environmental impacts as found in the first step. For the assignment of environmental effects to activities we propose to use the method of cost allocation, applied to a multiple of different environmental impacts considered as different costs. This leads to a consideration of vector cost allocation and its relation to ordinary one-dimensional cost allocation methods; in particular, we consider the stability of cost sharing rules under composition of cost functions, a property which is important in the application at hand. For part (2) of the approach we exploit the well-established methodology of DEA (Data Envelopment Analysis) in order to aggregate vectors of environmental effects to a single index of relative environmental impact of a consumption activity. An application of the last part of the approach is given, based on Danish national accounts data and using emission data as a proxy for environmental effect.

Transmission cost allocation is one of the major challenges in transmission open access faced by the electric power sector. The purpose of this work is to provide an analytical method for allocating transmission transaction cost in deregulated market. This research work provides a usage based transaction cost allocation method based on line-flow impact factor (LIF) which relates the power flow in each line with respect to transacted power for the given transaction. This method provides the impact of line flows without running iterative power flow solution and is well suited for real time applications. The proposed method is compared with the Newton–Raphson (NR) method of cost allocation on sample six bus and practical Indian utility 69 bus systems by considering multilateral transaction.