Activity-based Costing Research Articles

ANALISIS PERHITUNGAN BIAYA SATUAN TINDAKAN ORIF (Open Reduction Internal Fixation) FRAKTUR FEMUR MENGGUNAKAN METODE ABC (Activity Based Costing) (STUDI KASUS DI RS PKU MUHAMMADIYAH BANTUL)

Background: The determination of operating room rates at PKU Muhammadiyah Hospital in Bantul is currently using fee for service method where the operating rate is determined by the calculation of the cost components that occur as the cost of medical services, consumables, medicines, and the rent of operating room, but it has not included all the components of the activity-based costs associated with clinical pathways. However, this surgical procedure may result significant costs to the hospital.
 Methods: The study was conducted at PKU Muhammadiyah Hospital in Bantul. This research is descriptive qualitative case study design. The sample were the patients who underwent an operation of ORIF for Femoral Fractures without complications that met the inclusion and exclusion criteria. Cost analysis method used was the Activity-Based Costing (ABC).
 Results and Discussion: The unit cost of ORIF for Femoral Fractures which was calculated by the method of Activity Based Costing (ABC) was 8,157,726 rupiahs, while the real cost spent by the hospital was 9,035,885 rupiahs. The amount of real cost on ORIF for Femoral Fracture specified by RS PKU Muhammadiyah Bantul was higher than the unit cost calculated based on Activity-Based Costing method. The obtained difference was a positive difference, which was 878.159 rupiahs (10,76%). In the Activity-Based Costing (ABC), indirect and direct cost (overhead) are charged at some cost drivers, while the traditional system is only charged on a cost driver.
 Conclusions and Recommendations: Based on the calculation of unit costs obtained, it can be concluded that the unit cost of ORIF for Femoral Fracture in Central Surgery Installation PKU Muhammadiyah Hospital in Bantul with Activity- Based Costing method is lower and more proportionate with the activity. However, the hospital should also apply the calculation of the unit cost to all the types of service especially for surgery in order to identify and examine the cost components which are subject to change at any time and cause some disadvantages to the hospital accounting.

ANALISIS PERHITUNGAN UNIT COST PADA TINDAKAN TONSILEKTOMI DENGAN METODE ACTIVITY BASED COSTING (STUDI KASUS DI RUMAH SAKIT PKU MUHAMMADIYAH YOGYAKARTA)

Background: Private hospitals should strive to have the technical capability to manage and calculate costs based on the condition that both hospitals and facilities that can use the Indonesian Case Based Group (INA CBG) appropriately. RS PKU Muhammadiyah Yogyakarta as one of the private hospitals that participate and support the government's program of the Sistem Jaminan Sosial Nasional.Calculating the unit cost of a tonsillectomy was done as a study of the correspondence between the cost of services and a health claim
 Methods:The study was a descriptive qualitative case study design. Tonsillectomy unit cost calculation using activity based costing (ABC) with the goal difference obtained unit costs plus a margin to claim CBG INA in 2012.
 Result: Based on the calculation, the unit cost of services tonsillectomy with activity-based costing method is Rp. 2.265.732. ABC unit cost calculations result in a greater cost than the claims of INA CBG so get the difference in cost of Rp. 785.034.
 Conclusions: There is a negative difference between the calculation of service bi tonsillectomy ABC method with INA CBG claim. So that needs to be done by the hospital cost efficiency.

Effects of Inventory Management Practices on Operational Performance in Mombasa County Government, Kenya

This study aimed at establishing the effect of inventory management practices on the operational performance of Mombasa County government. The specific objectives included the following: to examine the impact of JIT model on the operational performance of Mombasa County government; to assess the effect of Activity Based Costing (ABC) on the operational performance of Mombasa County government; to determine the impact of Economic Order Quantity (EOQ) on the operational performance of Mombasa County government and to establish the impact of stock taking practice on the operational performance of Mombasa County government. The research study reviewed Just in Time Theory, Systems theory and the transactional theory. This study used a descriptive survey design. The target population was all the 250 employees working in Mombasa County government that included ICT officers, Finance officers, Budgeting officers, Internal Audit officers and Procurement officers. Sample size of 96 employees was drawn from and was selected by the use of stratified random sampling. Data was collected using a questionnaire. Data analysis was done with the aid of SPSS version 28. Inferential statistics was displayed by the use of correlations and regression analysis. The ethical considerations for this study included confidentiality, informed consent, privacy and anonymity. Correlation analysis revealed that there was a significant correlation between the Operational Performance of the County Government of Mombasa and Activity Based Costing practice (β = 0.321, p˂ 0.05). This is followed by Economic Order Quantity X3 (β = 0.289, p˂ 0.05), Stocktaking X4 (β = 0.251, p˂ 0.05), and Just in Time Model X1 (β = 0.243, p˂ 0.05), in that order.

Cost-effectiveness of treating advanced melanoma with tumor-infiltrating lymphocytes based on an international randomized phase 3 clinical trial

IntroductionIn a multicenter, open-label randomized phase 3 clinical trial conducted in the Netherlands and Denmark, treatment with ex vivo-expanded tumor-infiltrating lymphocytes (TIL-NKI/CCIT) from autologous melanoma tumor compared with ipilimumab improved...

The role of effective inventory management practices on organizational performance: a case of Tarkwa municipal hospital, western region, Ghana

The study aimed at investigating the role of effective inventory management practices on organisational performance; a case study of Municipal Hospital Tarkwa in the Western Region of Ghana. The specific objectives of the study were to establish the inventory management practices used by organisations, to find the effect of inventory management practices on organisational performance, and to determine the challenges of implementing inventory management practices in organizations. The study adopted descriptive and causal research designs and used questionnaires as the data collection instrument. Data were collected from 200 respondents and STATA 13 analytical tool was used to perform the analysis. The results were presented using frequency tables and descriptive statistics tables. The study also used Probit regression analysis to establish the relationship between the dependent and the independent variables. The findings show that the stakeholders of the hospital are generally happy with the service delivery of the hospital. Thus, the results show that the hospital adopts various inventory management practices including; activity-based costing, economic order quantity, material requirement planning, materials resource planning, enterprise resource planning, distribution requirement planning, and just in time. The study concludes that effective inventory management positively affects the performance of organizations, in this case, the quality of service delivery of organizations. The study recommends organizations successfully implement an effective inventory management system. This will help reduce the risks of shortages. In addition, the concept of inventory management could be simplified for organizations in Ghana. This can be done through education or training to all staff in organizations to enlighten them on the need for effective inventory management practices for their organization’s performance.

ACTIVITY-BASED COSTING

The present study proposes a cost management system, based on the concepts of Activity Based Costing (ABC), and its application in a Port Authority in Brazil. An applied action-research study was conducted with the participation of the researchers together with the Port Authority team to present a model that meets the solution to the problem presented. The proposed model allowed for a broad view of port management is possible to identify, along with the processes, the performance of each area, operational and administrative, as well as the division of responsibilities of each team member in the organization.

Does Body Mass Index Influence Intraoperative Costs and Operative Times for Anterior Cervical Discectomy and Fusion? A Time-Driven Activity-Based Costing Analysis

ObjectiveSpine surgeons are often unaware of drivers of cost variation for anterior cervical discectomy and fusion (ACDF). We used time-driven activity-based costing (TDABC) to assess the relationship between body mass index (BMI), total cost, and OR times for ACDFs. MethodsTotal cost was divided into direct and indirect costs. Individual costs were obtained by direct observation, electronic medical records, and through querying multiple departments. Timestamps for all involved personnel and material resources were documented. Total intraoperative costs were estimated for all ACDFs from 2017 and 2022. All patients were categorized into distinct BMI-based cohorts. Linear regression models were performed to assess the relationship between BMI, total cost, and OR times. ResultsA total of 959 patients underwent ACDFs between 2017 and 2022. The average age and BMI were 58.1 ± 11.2 years and 30.2 ± 6.4 kg/m2, respectively. The average total intraoperative cost per case was $7,120 ± $2,963. Multivariable regression analysis revealed that BMI was not significantly associated with total cost (p=0.36), supply cost (p=0.39), or personnel cost (p=0.20). Higher BMI was significantly associated with increased time spent in the OR (p=0.018); however, it was not a significant factor for the duration of surgery itself (p=0.755). Rather, higher BMI was significantly associated with non-operative OR time (p<0.001). ConclusionTDABC is a feasible and scalable methodology for understanding the true intraoperative costs of ACDF. Although higher BMI was not associated with increased total cost, it was associated with increased preparatory time in the OR.

The economic costs of orthopaedic services: a health system cost analysis of tertiary hospitals in a low-income country

BackgroundTraumatic injuries are rising globally, disproportionately affecting low- and middle-income countries, constituting 88% of the burden of surgically treatable conditions. While contributing to the highest burden, LMICs also have the least availability of resources to address this growing burden effectively. Studies on the cost-of-service provision in these settings have concentrated on the most common traumatic injuries, leaving an evidence gap on other traumatic injuries. This study aimed to address the gap in understanding the cost of orthopaedic services in low-income settings by conducting a comprehensive costing analysis in two tertiary-level hospitals in Malawi.MethodsWe used a mixed costing methodology, utilising both Top-Down and Time-Driven Activity-Based Costing approaches. Data on resource utilisation, personnel costs, medicines, supplies, capital costs, laboratory costs, radiology service costs, and overhead costs were collected for one year, from July 2021 to June 2022. We conducted a retrospective review of all the available patient files for the period under review. Assumptions on the intensity of service use were based on utilisation patterns observed in patient records. All costs were expressed in 2021 United States Dollars.ResultsWe conducted a review of 2,372 patient files, 72% of which were male. The median length of stay for all patients was 9.5 days (8–11). The mean weighted cost of treatment across the entire pathway varied, ranging from $195 ($136—$235) for Supracondylar Fractures to $711 ($389—$931) for Proximal Ulna Fractures. The main cost components were personnel (30%) and medicines and supplies (23%). Within diagnosis-specific costs, the length of stay was the most significant cost driver, contributing to the substantial disparity in treatment costs between the two hospitals.ConclusionThis study underscores the critical role of orthopaedic care in LMICs and the need for context-specific cost data. It highlights the variation in cost drivers and resource utilisation patterns between hospitals, emphasising the importance of tailored healthcare planning and resource allocation approaches. Understanding the costs of surgical interventions in LMICs can inform policy decisions and improve access to essential orthopaedic services, potentially reducing the disease burden associated with trauma-related injuries. We recommend that future studies focus on evaluating the cost-effectiveness of orthopaedic interventions, particularly those that have not been analysed within the existing literature.

Reconstruction of Caesarean Section Service Rates for National Health Insurance Patients

RSIA Permata Bunda as a JKN provider is paid according to the INA-CBG rate by BPJS Kesehatan, the amount of which does not match the costs incurred by the hospital so that there is a negative difference between the hospital section caesarea (SC) rate and the INA-CBG rate which reached 2 billion in 2021. The aim of this study was to reconstruct the SC service rate for JKN patients so that efficiency occurs. This study was an explanatory sequential mixed method design, preceded by quantitative research with unit cost calculation using the activity based costing (ABC) method and the average fee for service rate for hospital SC services and then qualitative research for interviews with informants. The unit cost calculated using the ABC method is lower than hospital package rates, fee for service rates but higher than INA-CBG rates for SC severity level I services in treatment classes I, II and III which causes losses for the hospital. Efficiency efforts that can be carried out by hospitals are through tariff reconstruction by adjusting LOS (length of stay), optimizing drug use and supporting examinations according to clinical pathways and changing the calculation of medical services from fee for service to a package system.

UTILIZATION OF THE ACTIVITIY BASED COSTING (ABC) SYSTEM IN DETERMINING OVERCOSTING OR UNDERCOSTING TUITION FEES

This study aims to identify the application of the Activity Based Costing (ABC) system in Private Universities in determining the cost of goods for the study program. The main focus of this study is to identify the activities of primary and secondary study programs to determine cost drivers and determine the rates of each of these activities. The research method through case studies by conducting quantitative descriptive analysis is collecting data, compiling data, classifying data and deciphering data. The source of the data came from interviews and observation of financial statement documents with samples at XYZ University. The calculation results obtained the conclusion that several social and economic study programs at XYZ University were in over costing and some exact study programs were under costing conditions. The implications of the results of this study provide input for XYZ University in developing an Activity Based Management (ABM) system as a process of continuous improvement in improving the quality of education.

Optimizing Outpatient Radiation Oncology Consult Workflow by Using Time-Driven Activity-Based Costing: Efficiency and Financial Impacts.

Clinical efficiency is a key component of value-based health care. Our objective here was to identify workflow inefficiencies by using time-driven activity-based costing (TDABC) and evaluate the implementation of a new clinical workflow in high-volume outpatient radiation oncology clinics. Our quality improvement study was conducted with the Departments of GI, Genitourinary (GU), and Thoracic Radiation Oncology at a large academic cancer center and four community network sites. TDABC was used to create process maps and optimize workflow for outpatient consults. Patient encounter metrics were captured with a real-time status function in the electronic medical record. Time metrics were compared using Mann-Whitney U tests. Individual patient encounter data for 1,328 consults before the intervention and 1,234 afterward across all sections were included. The median overall cycle time was reduced by 21% in GI (19 minutes), 18% in GU (16 minutes), and 12% at the community sites (9 minutes). The median financial savings per consult were $52 in US dollars (USD) for the GI, $33 USD for GU, $30 USD for thoracic, and $42 USD for the community sites. Patient satisfaction surveys (from 127 of 228 patients) showed that 99% of patients reported that their providers spent adequate time with them and 91% reported being seen by a care provider in a timely manner. TDABC can effectively identify opportunities to improve clinical efficiency. Implementing workflow changes on the basis of our findings led to substantial reductions in overall encounter cycle times across several departments, as well as high patient satisfaction and significant financial savings.

Scoping Review: Anesthesiologist Involvement in Alternative Payment Models, Value Measurement, and Nonclinical Capabilities for Success in the United States of America.

The US healthcare sector is undergoing significant payment reforms, leading to the emergence of Alternative Payment Models (APMs) aimed at improving clinical outcomes and patient experiences while reducing costs. This scoping review provides an overview of the involvement of anesthesiologists in APMs as found in published literature. It specifically aims to categorize and understand the breadth and depth of their participation, revolving around 3 main axes or "Aims": (1) shaping APMs through design and implementation, (2) gauging the value and quality of care provided by anesthesiologists within these models, and (3) enhancing nonclinical abilities of anesthesiologists for promoting more value in care. To map out the existing literature, a comprehensive search of relevant electronic databases was conducted, yielding a total of 2173 articles, of which 24 met the inclusion criteria, comprising 21 prospective or retrospective cohort studies, 2 surveys, and 1 case-control cohort study. Eleven publications (45%) discussed value-based, bundled, or episode-based payments, whereas the rest discussed non-payment-based models, such as Enhanced Recovery After Surgery (7 articles, 29%), Perioperative Surgical Home (4 articles, 17%), or other models (3 articles, 13%).The review identified key themes related to each aim. The most prominent themes for aim 1 included protocol standardization (16 articles, 67%), design and implementation leadership (8 articles, 33%), multidisciplinary collaboration (7 articles, 29%), and role expansion (5 articles, 21%). For aim 2, the common themes were Process-Based & Patient-Centric Metrics (1 article, 4%), Shared Accountability (3 articles, 13%), and Time-Driven Activity-Based Costing (TDABC) (3 articles, 13%). Furthermore, we identified a wide range of quality metrics, spanning 8 domains that were used in these studies to evaluate anesthesiologists' performance. For aim 3, the main extracted themes included Education on Healthcare Transformation and Policies (3 articles, 13%), Exploring Collaborative Leadership Skills (5 articles, 21%), and Embracing Advanced Analytics and Data Transparency (4 articles, 17%).Findings revealed the pivotal role of anesthesiologists in the design, implementation, and refinement of these emerging delivery and payment models. Our results highlight that while payment models are shifting toward value, patient-centered metrics have yet to be widely accepted for use in measuring quality and affecting payment for anesthesiologists. Gaps remain in understanding how anesthesiologists assess their direct impact and strategies for enhancing the sustainability of anesthesia practices. This review underscores the need for future research contributing to the successful adaptation of clinical practices in this new era of healthcare delivery.

Enhancing accuracy in construction overhead cost estimation: a novel integration of activity-based costing and building information modelling

PurposeThis study addresses the prevailing complexities and limitations in estimating and managing construction overhead costs (COCs) in the existing literature, with the purpose of enhancing the accuracy of cost performance indicators in construction project management.Design/methodology/approachAn innovative approach is proposed, employing the activity-based costing (ABC) accounting method combined with building information modelling (BIM) to assign real overhead costs to project activities. This study, distinguished by its incorporation of a real case study, focuses on an administrative building with a four-story concrete structure. It establishes an automated method for evaluating project cost performance through the detailed analysis of earned value management (EVM) cost indicators derived from ABC results and BIM data.FindingsThe results show that the ABC integration improves the accuracy of cost performance indicators by over 9%, revealing the project's true cost index for the first time and demonstrating the substantial value of the approach in construction engineering and management.Research limitations/implicationsThe current study highlights a notable gap in the existing literature, addressing the challenges in onsite overhead cost estimation and offering a solution that incorporates the state-of-the-art techniques.Practical implicationsThe proposed method has significant implications for project managers and practitioners, enabling better-informed decisions based on precise cost data, ultimately leading to enhanced project outcomes.Originality/valueThis research uniquely combines ABC and BIM, presenting a pioneering solution for the accurate estimation and management of COCs in construction projects, adding significant value to the current body of knowledge in this field.

Using time-driven activity-based costing in restaurant business: Levelled application of a case study

For better profitability, all restaurants should target maximizing workers' productivity, especially in fine dining establishments. In this context, cost knowledge is fundamental information needed for managerial decision-making, such as capacity, pricing, product mix, and profitability analyses. Calculating food costs in recipes can be done easily if only material costs are considered. However, it is quite difficult to associate labor costs and general overhead costs with food production and incorporate them into the calculations. The Time-Driven Activity-Based Costing (TDABC) system is an effective way to calculate the cost of labor based on the time spent by workers during food production. This research applies the TDABC system in a case study conducted in a 5-star luxury hotel's fine dining restaurant to investigate labor cost. Furthermore, it suggests a different approach by enhancing the existing TDABC system formula, which considers workers with different skills and their associated costs (Leveled TDABC). The findings of this research demonstrate that this approach provides more efficient results and allows for a more detailed and effective understanding of idle capacities and labor productivity.

The Economic Costs of Tobacco Related Illnesses in Kenya.

To estimate the economic costs of selected tobacco-related illnesses (TRI) in Kenya in 2022. This study was conducted in 2 phases. Phase 1, conducted between 2021 and 2022, entailed conducting a cross-sectional study conducted in 4 national public referral hospitals in Kenya. Patients with cardiovascular disease, cancer, chronic obstructive pulmonary disease, or tuberculosis were interviewed to compute the indirect and direct medical costs related to the illness. Activity-Based Costing approach was used to capture costs for services along the continuum of care pathway. In the second phase, the Tobacco Attributable Factor was used to estimate the direct, indirect, and ultimately economic cost due to tobacco smoking. The estimated health care cost attributed to tobacco use in Kenya is US$396,107,364. Among TRIs included in the study, myocardial infarction had the highest health care cost at US$158,687,627, followed by peripheral arterial disease and stroke with health care cost of US$64,723,181 and US$44,746,700 respectively. The main cost driver across all the illnesses is the cost for medication accounting for over 90% of the total health care cost. The productivity losses from the diseases ranged between US$148 to US$360 and accounted for 27% to 48% of the economic costs. The total cost attributable to tobacco use to Kenya's economy for the selected TRIs was between US$544.74 million and US$756.22 million. Tobacco related illnesses impose a significant economic burden as reported for direct and indirect costs. These findings underscore the need for strengthened implementation of the provision of the Framework Convention on Tobacco Control and the Tobacco Control Act (2007) to facilitate a reduction in tobacco consumption in the population.

Pediatric neurosurgery through the lens of time-driven activity-based costing: a pilot study.

Time-driven activity-based costing (TDABC) is a method used in cost accounting that has gained traction in health economics to identify value optimization initiatives. It measures time, assigns value to time increments spent on a patient, and integrates the cost of material and human resources utilized in each episode of care. In this study, the authors report the first use of TDABC to evaluate costs in a pediatric neurosurgical practice. A clinical pathway was developed with a multifunction team. A time survey among each care team member, including surgeons, medical assistants (MAs), and patient service representatives (PSRs), was carried out prospectively over a 10-week period at a pediatric neurosurgery clinic. Consecutive patient encounters for Chiari malformation (CM), hydrocephalus, or tethered cord syndrome (TCS) were included. Encounters were categorized as new or established. Relative annual personnel costs, using the salary of a PSR as a reference (i.e., 1.0-unit cost), were calculated for all members using departmental financial data after adjustments. The relative capacity cost rates (minute-1) for each personnel, a representation of per capita cost per minute, were then derived, and the relative costs per visit were calculated. A total of 110 visits (24 new, 86 established) were captured, including 40% CM, 41% hydrocephalus, and 19% TCS encounters. Surgeons had the highest relative capacity cost rate (118.4 × 10-6), more than 10-fold higher than that of an MA or PSR (10.65 × 10-6 and 9.259 × 10-6, respectively). Surgeons also logged more time with patients compared with the rest of the care team in nearly all visits (p ≤ 0.002); consequently, the total visit costs were primarily driven by the surgeon cost (p < 0.0001). Overall, surgeon cost constituted the vast majority of the total visit cost (92%-93%), regardless of whether the visits were new or established. Visit costs did not differ by diagnosis. On average, new visits took longer than established visits (p < 0.001). This difference was largely driven by new CM visits (44.3 ± 13.7 minutes), which were significantly longer than established CM visits (29.8 ± 9.2 minutes; p = 0.001). TDABC may reveal opportunities to maximize value by highlighting instances of variability and high cost in each module of care delivery. Physician leaders in pediatric neurosurgery may be able to use this information to allocate costs and streamline value care pathways.

Time-driven activity-based costing (TDABC) of current clinical practice for mucopolysaccharidosis type II patients assisted at one institution of the Brazilian Public Healthcare System: Data from JAV-RARAS Study

Time-driven activity-based costing (TDABC) of current clinical practice for mucopolysaccharidosis type II patients assisted at one institution of the Brazilian Public Healthcare System: Data from JAV-RARAS Study

The Activity-Based Costing System Applied in Higher Education Institutions: A Systematic Review and Mapping of the Literature

Objective: In recent years, management accounting in higher education institutions has undergone significant changes due to the various New Public Management (NPM) reforms. One of the management accounting tools that has been advised to HEIs is Activity-Based Costing (ABC). With this evolving field of research, this article aims to analyze research in international scientific journals focusing on ABC in HEIs. To this end, this article provides an overview of how research in this area has evolved. We present an overview of the past, present, and future of research in the field of the ABC model applied in HEIs. Methodology: Through a systematic literature review, the Web of Science and Scopus databases were used as a source of articles. Our analysis is based on a total of 139 articles. We used a systematic literature review combining different bibliometric techniques. These allowed us to develop a mapping of the literature on the application of the ABC model in HEIs, which helps us better understand the research related to the topic and its evolution. Results: It is concluded that the existing literature on this topic has developed along three lines of research: implementation of ABC as a cost-control method, TDABC as a time-based cost-control method, and the application of the ABC Method in health services. Originality: Based on the results found, this article identifies avenues of research that can be explored, namely the study of the application of ABC in the education sector, and provides a research agenda for future studies.

Penerapan Metode Activity-Based Costing (ABC) dalam Mengukur Biaya Produksi dan Meningkatkan Efisiensi Operasional

The ABC method emerged as a response to the weaknesses of traditional methods, such as the production volume-based costing method. The purpose of this study was to analyze the Application of the Activity-Based Costing (ABC) Method in Measuring Production Costs and Improving Operational Efficiency. The research method used is a literature study or Library Research with a qualitative approach. The literature used is literature from research results or reviews presented in national and international scientific articles that are related to accounting. All articles used are sourced from the electronic literacy data search engine Mendeley and Google scholar. Based on the literature review of several articles on the results and discussion, the conclusions that can be drawn are: The application of the Activity-Based Costing (ABC) method has a significant impact on measuring production costs and increasing the company's operational efficiency. Keywords: Activity-Based Costing; Production Cost; Operational Efficiency

Cost Control of “J” Metallurgical Products Based on Job Analysis

Compared with traditional costing, activity-based costing calculates costs down to the activity level, which is more accurate than traditional costing. In the process of cost control, activity-based costing can analyze the cost drivers of each operation and provide management with accurate cost information, so that cost control is not limited to post-event accounting, but runs through product procurement, production, assembly, and debugging. The whole process of product production. Secondly, this article uses Company M as a case to analyze the differences between traditional costing and activity-based costing in the cost accounting and cost control processes. Finally, by using activity-based costing to analyze the entire production process of “J” metallurgical products of Company M, cost control suggestions for Company M are given, so that the problems existing in the procurement process and production process of Company M can be solved.