Activity-based Costing Model Research Articles

Assessing cost and cost savings of teleconsultation in long-term care facilities: a time-driven activity-based costing analysis within a value-based healthcare framework

BackgroundQuebec’s healthcare system faces significant challenges due to labour shortage, particularly in long-term care facilities (CHSLDs). The aging population and increasing demand for services compound this issue. Teleconsultation presents a promising solution to mitigate labour shortage, especially in small CHSLDs outside urban centers. This study aims to evaluate the cost and cost savings associated with teleconsultation in CHSLDs, utilizing the Time-Driven Activity-Based Costing (TDABC) model within the framework of Value-Based Healthcare (VBHC).MethodsThis study focuses on CHSLDs with fewer than 50 beds in remote regions of Quebec, where teleconsultation for nighttime nursing care was implemented. Time and cost data were collected from three CHSLDs over varying periods. The TDABC model, aligned with VBHC principles, was applied through five steps, including process mapping, estimating activity times, calculating resource costs, and determining total costs.ResultsTeleconsultation increased the cost per minute for nursing care compared to traditional care, attributed to additional tasks during remote consultations and potential technical challenges. However, cost savings were realized due to reduced need for onsite nursing staff during non-eventful nights. Overall, substantial savings were observed over the project duration, aligning with VBHC’s focus on delivering high-value healthcare.ConclusionsThis study contributes both theoretically and practically by demonstrating the application of TDABC within the VBHC framework in CHSLDs. The findings support the cost savings from the use of teleconsultation in small CHSLDs. Further research should explore the long-term sustainability and scalability of teleconsultation across different CHSLD sizes and settings within the VBHC context to ensure high-value healthcare delivery.

An Activity-Based Costing model applied to the management process of patients with migraine at IRCCS Mondino Foundation

Background and aim: The ageing of the general population, with the increase in chronic diseases, poses the need for using technological innovation to face the growing healthcare needs. The present analysis applied the Activity-Based Costing tool in migraine patients followed at the IRCCS Mondino of Pavia to formalize and quantify the costs of the whole patient’s management process and to estimate the overall economic burden of migraine from the perspective of the National Health Service (NHS). Methods: A two-stage analysis was conducted. The first stage aimed at drawing patient’s pathway, defining all the possible activities and actors involved in the healthcare delivery and treatment for migraine at the IRCCS during year 2022. The second phase was the development of a model to estimate the costs of the entire process by pricing the individual activities. Results: The described model yielded an estimated total annual cost for the overall management of migraine of € 1,222,392, corresponding to a direct cost for a therapy of approximately 6 months per single patient of € 814. The most impactive items on the estimated annual expenditures were hospitalizations, followed by diagnostic examinations after follow-up visits and drugs dispensed by Hospital Pharmacy for home-administration (monoclonal antibodies). Conclusions: This analysis allowed detailing the single activities and resources used in migraine patient’s pathway and then estimating the direct costs sustained by the NHS. The model could be translated to other diseases for optimizing the diagnostic/therapeutic and economic management of assisted patients and improving healthcare resource allocation.

ABC model for cost estimation of custom implants by Additive Manufacturing.

Computer-aided design (CAD) models can now be directly converted into products and structures. One technique to realize such approach is through Additive Manufacturing (AM). AM is relatively new manufacturing technology in which products are manufactured by layering various materials like rubber, metal, ceramic, composites, and polymers. However, the use of this technology requires consideration of its associated cost to ensure its competitiveness. In this paper, a simplified mathematical cost model is suggested. The model considers the main components of costs. The model formula utilizes expenses related to the pre-processing, main processing, and the post-processing operations. To validate the model, it is tested to estimate the cost of medical implants manufacturing using AM technique. In many cases, medical implants require unique or dedicated design for each patient. Hence cost estimation will help to assess and estimate the required financial resources for such operations. A case study is provided in this paper to estimate the manufacturing cost of a finger's phalanges bone, with metal implant using AM technique. The developed model may be described as Activity Based Costing (ABC). The model is introduced to estimate the cost of parts produced using AM technique. Although the model is developed to suit custom implant manufacturing using AM technique, its use may also be adapted to suit the manufacturing of many other parts and products. The developed model is aiming to achieve several tasks namely assigning cost drivers to each activity, estimating the cost of individual actions, allocating overhead expenses, calculating the overall production cost, and establishing an acceptable selling price. It assists companies in computing the cost of custom implants for customers, enhancing the accuracy of production cost estimates, and ultimately boosting profitability.

Tools for cost management

This article aims to provide an overview of the literature in which cost assessment methods are currently used, and their characteristics and limitations are also pointed out. To achieve the proposed objectives, a Systematic Literature Review (RSL) was conducted. It was possible to identify the tools discussed in the bibliographic portfolio studied, namely: life cycle costing, target costing, the total cost of ownership, activity-based costing, variable costing, and mathematical models, as well as the difficulties in implementing these tools in different application contexts. It has also been noted that multiple tools are often employed in integrated methodologies to mitigate the inherent limitations of individual models when treated in isolation. The significance of this article resides in its contribution to the discourse on the evolution of cost management tools and their application within integrated approaches, particularly in addressing the typical challenges encountered in emerging business models.

Equilibrium between Environmental and Economic Objectives: An Activity-Based Costing Approach Application for Carbon Emissions Management in the Aluminum Alloy Wheel Industry

In the face of the increasingly dire threat of global climate change, reducing carbon emissions has become an urgent priority for governments and corporations worldwide. The aluminum alloy wheel manufacturing industry bears an even heavier burden for emission mitigation due to its high production volume, complex processes, and proportionally higher carbon footprint. With impending carbon taxes and trading policies looming, the industry urgently needs to strike a balance between maximizing profits and minimizing carbon emissions. Leveraging real-world industry data, this research develops four green Activity-Based Costing (ABC) models and utilizes optimization software to compare the following scenarios: non-continuous carbon tax, carbon tax with trading, tiered tax with exemptions, and exemptions combined with trading. Results demonstrate that integrating carbon trading and targeted tax reductions can improve corporate financial positions without severely compromising environmental goals. Although identifying optimal balance points remains a highly complex process, this study equips enterprises and policymakers with quantitative tools to navigate fluctuating carbon regulatory environments. As national policies progress, more multifaceted dynamic carbon tax models will likely provide more profound insights for sustainable development.

Cost Analysis of Fan-out Processes for Chiplet Packaging

When building a design around chiplets, there are many factors to consider: industry standards, availability of chiplets within the supply chain, size requirements, and cost, to name a few. The cost of chiplet packaging is a particularly important factor that must be understood, because even if all design requirements can be met, the chiplet package will not come to fruition if the total cost is too high. The basic tradeoff between a monolithic die and a series of chiplets is a reduction in silicon costs countered by an increase in packaging costs. This analysis will compare a monolithic die flip chip package to two fan-out processes that support chiplet packaging. In the first scenario, a two-chiplet chip-last fan-out on substrate package will be compared to a standard flip chip package. For the second comparison, a monolithic flip chip package will be compared to a four-chiplet fan-out package that utilizes embedded silicon for additional interconnect. For both scenarios, a detailed cost comparison will be provided. Activity based cost modeling will be used for this analysis. In addition to looking at the direct costs of the substrated and assembly processes, yield considerations and the prices of the incoming silicon (which varies by node) will be included. The goal of this analsysis is to evaluate the cost of monolithic flip chip package versus a chiplet scenario for two designs, and to highlight the cost drivers of the fan-out chiplet packaging processes.

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.

Fuzzy activity-based costing: An investment evaluation approach for management information system of a smart factory

The investment in a smart manufacturing factory with corresponding management information systems is strategic, complex, and costly. This paper aims to develop a cost estimation framework for a smart factory management information system (SFMIS). This paper proposed a fuzzy activity-based costing (FABC) model for the evaluation of the SFMIS under conditions of uncertainty. The model presented a multi-step procedure to do the identification, estimation, determination, calculation, and computation of the resource costs, activity costs, and systems as cost objects. The fuzzy Delphi method is adopted, and seventeen experts are surveyed in two rounds of a questionnaire assessing the importance of resources, activities, systems, and industry type and company size. The proposed FABC cost estimation model is illustrated by a case study. This model can identify and allocate resources and estimate SFMIS costs accurately and efficiently. By using this FABC cost evaluation framework, policymakers facilitate smart factory implementation for its management information system under uncertainty.

FOWLP and Flip Chip Cost Comparison: Impact of the Supply Chain Crunch

The impact of the pandemic on the semiconductor and electronics packaging supply chains has been in the news for over a year now. Current projections suggest the supply chain crunch could impact various industries through 2022 and 2023. While there are many ramifications of this shortage, one is certainly the impact on cost. Pricing for packages built with more mature technologies, such as wire bond and flip chip, has changed dramatically. Both of these mature technologies have typically been seen as lower cost options than newer technologies, such as fan-out wafer level packaging (FOWLP). Due to the recent shortages, the cost comparison is no longer as straight-forward as it was before. This paper will analyze the cost of building various packages using flip chip, wire bond, and FOWLP technologies. Factory overhead, indirect costs, and profit margins will be taken into account to turn this into a price comparison, rather than just a comparison of direct costs. The analyses will include the price of a package built using FOWLP technology, the price of flip chip and wire bond packages built before recent supply chain disruptions, and the new expected prices of flip chip and wire bond packages. Activity based cost modeling will be used for this analysis. This is a bottom-up, detailed approach to cost that accounts for the many cost components associated with every step of the process flow, such as material, labor, and capital depreciation. The goal of this analysis is to understand how supply chain disruptions have changed the cost parity points of wire bond, flip chip, and FOWLP packages.

Thermo-compression Bonding Assembly Technology

With the slowing of Moore’s law heterogeneous integration and assembly became important drivers of the performance of semiconductor packaging. This “More than Moore” approach enables higher functional density and higher bandwidth packages. At the same time, heterogeneous integration drives an aggressive interconnect pitch roadmap, pushing the limits of Advanced Packaging technologies. Flip chip with mass reflow has been the main assembly technology for fine pitch interconnect. However, the need for even finer pitch and higher packaging density was not compatible with the limitations imposed by the mass reflow process, therefore requiring new interconnect technologies. Local reflow flip chip via thermocompression bonding (TCB) overcomes limitations due to CTE-mismatch and warpage. Meanwhile, TCB based on solder micro-bumps became a well-established and cost effective fine-pitch interconnect process and Cu to Cu Hybrid Bonding is emerging as a technology for the future. Normal TCB typically requires the application of flux and post-bond flux cleaning as any flux residue can result in post mold package reliability issues, even for ‘no-clean’ flux materials. Post-bond flux cleaning, however, becomes more and more difficult for increasing die size and with bump pitch and stand-off height shrinking even further. K&S has developed and demonstrated a flux-less TCB process for large and high-density interconnect die that utilizes in-situ Formic Acid (FA) vapor application for copper and solder oxide reduction. This process eliminates the need for flux and, therefore, there is no need for the tedious and time-consuming cleaning of the post bond flux residue. The FA process delivers nearly the same productivity as a conventional flux based TCB process. The FA delivery system can be integrated on our high-accuracy C2S and C2W TCB tools, leveraging the existing HVM TCB infrastructure and extending its application space from ~35µm towards ultra-fine pitch applications around 10µm. Hybrid bonding created a lot of attention over the last years as this bump-less technology allows for long-term pitch scalability, possibly even down to 1µm. Hybrid bonding, however, requires a more complex process flow which relies on pristine die and target wafer surfaces as well as front-end level cleanliness conditions. Accordingly, the advantages and cost of Flux-less TCB as compared to Hybrid bonding should be explored in more detail. TCB can be viewed as an extension of flip chip. Using the existing assembly and metrology infrastructure as well as the existing die and substrate design layouts will be attractive to subcons. As a result, the overall cost and time to market should be much lower. An activity-based cost model has been developed along with SavanSys comparing flux-less TCB and Hybrid bonding. We present results on the process cost as well as the overall package cost as a function of die size and yield. In summary, flux-less thermo-compression bonding should be considered for ultra-fine pitch applications. We have demonstrated pitch capability below 30µm and believe that a pitch of 10µm may be possible. Other applications that formic acid vapor TCB enables are large module bonding (50 X 50 mm, 70 X 70 mm) and Cu to Cu interconnects.

Cost Analysis of Fan-out Processes for Chiplet Packaging

When building a design around chiplets, there are many factors to consider: industry standards, availability of chiplets within the supply chain, size requirements, and cost, to name a few. The cost of chiplet packaging is a particularly important factor that must be understood, because even if all design requirements can be met, the chiplet package will not come to fruition if the total cost is too high. The basic tradeoff between a monolithic die and a series of chiplets is a reduction in silicon costs countered by an increase in packaging costs. This analysis will compare a monolithic die flip chip package to two fan-out processes that support chiplet packaging. In the first scenario, a two-chiplet chip-last fan-out on substrate package will be compared to a standard flip chip package. For the second comparison, a monolithic flip chip package will be compared to a four-chiplet fan-out package that utilizes embedded silicon for additional interconnect. For both scenarios, a detailed cost comparison will be provided. Activity based cost modeling will be used for this analysis. In addition to looking at the direct costs of the substrate and assembly processes, yield considerations and the price of the incoming silicon (which varies by node) will be included. The goal of this analysis is to evaluate the cost of a monolithic flip chip package versus a chiplet scenario for two designs, and to highlight the cost drivers of the fan-out chiplet packaging processes.

Study on the Application of Activity-Based Costing in Cold Chain Logistics Enterprises under Low Carbon Environment

Currently, a large amount of greenhouse gas emissions has caused a series of problems such as serious environmental degradation, and China is facing enormous pressure to reduce emissions. In terms of meeting the needs of people’s lives, cold chain logistics has undergone faster development, and its carbon emissions are relatively high. In response to the government’s advocacy for green and low-carbon concepts, some technical measures taken will increase the cost of carbon emissions. Identifying measures to reduce carbon emissions using management methods is an ongoing problem that this paper intends to solve. To address the shortcomings of the traditional cost method that cannot accurately account for the cost of each calculation object and ignores the carbon emission cost, this paper constructs an activity-based cost model for cold chain logistics enterprises to more comprehensively account for the operation cost and carbon emission cost. Then, a typical enterprise YS cold chain logistics company is used as a case study for an empirical calculation and analysis. The following conclusions are drawn: (1) the results identify the main activity centers that affect the operating costs and carbon emission costs of different customers; (2) a comparison among the total cost of each project helps to identify high-quality customers; (3) clarifying the carbon emission cost of wasting resources is beneficial for further optimizing the match between production capacity and business volume. This paper provides a path reference for enterprises to efficiently implement logistics cost management and carbon emission control, which can help enterprises cope with cost reduction and efficiency enhancement in a low-carbon environment and promote the long-term development of the logistics industry and environmental protection.

Cost of Ownership of Spare Parts under Uncertainty: Integrating Reliability and Costs

In capital-intensive organizations, decisions regarding capital costs play an important role due to the significant amount of investment required and the expected return on investment. Spare parts management is crucial to those ends, as spare parts management can constitute a significant portion of OPEX. Companies must implement a trade-off analysis between stock levels and assets’ availability. Decision-making supports mechanisms such as the Level of Repair Analysis (LORA), Integrated Logistics Systems (ILS), and life-cycle costing (LCC) models have been developed to aid in equipment selection, implementation, and decommissioning. Nowadays, these mechanisms appear to be integrated with risk-management models and standards. This paper proposes a long-term costing model that integrates a capacity analysis, reliability functions, and risk considerations for the cost management of logistics activities, particularly in MRO structures. The model is built upon Time-Driven Activity-Based Costing (TD-ABC) and incorporates the volume of activities generated by MRO needs. It also addresses uncertainty through the integration of a cost-at-risk model. By integrating spare parts, activity-based cost models, and risk measurement through Monte Carlo simulation, this study offers powerful insights into optimizing spare parts logistics activities. The proposed model is a novel approach to include the risk of cost in spare parts management, and its matrix-activity-based structure makes possible the development of sophisticated mathematical models for costing and optimization purposes in different domains.

A New Scenario-Based Simulation Model for Cost Management of Healthcare Services through Improving the Efficiency of the Health Centers

There is a need for an appropriate decision-making approach and a precise costing method in order to make appropriate decisions that result in managing the resource utilization, improving the efficiency of healthcare systems and processes, increasing the patient consent, and reducing the costs of healthcare services. Therefore, this study is to develop a new method for estimating and reducing the services’ costs by assessing the scenarios intended for the improvement of departments using time-driven activity-based costing (TDABC) and simulation model with conditions of uncertainty. To investigate the application of this method, the lithotripsy department of a kidney center has been studied and attempted to investigate the effects of different scenarios of scheduling the technicians’ presence and scheduling patients’ appointments, alongside the effects of controlling the factors of patient cancellation in different stages of the treatment process on lowering the healthcare costs and waiting time and on improving the hospital efficiency. The results showed that significant improvements in costs, waiting time, human resource utilization, and overall system efficiency were emerged. The impact of patient appointment scheduling scenarios on the abovementioned indexes was found to be far more than other scenarios. Furthermore, the results from the costs determined indicate a difference of 0.60, 0.61, 0.67, 0.67, and 0.63 percent between these costs and the costs determined by the traditional approaches. Such differences among the costs determined by these two approaches mainly occur due to different methods of allocating indirect costs and existence of uncertainty in the costs and time of therapeutic activities.

Stochastic Activity-Based Time and Cost (S-ATC) Model for Oil Wells: Case Study of Niger Delta Onshore, Nigeria

Stochastic Activity-Based Time and Cost (S-ATC) Model for Oil Wells: Case Study of Niger Delta Onshore, Nigeria

Cost Analysis in Online Teaching Using an Activity Map

Virtual education has been associated, on some occasions, with economic models of scale that strengthen the mercantilist vision of teaching, thereby raising questions on the quality of the service. Some studies on educational costs associated with this modality simplify the analysis based on individual elements, such as the production of courses or the technological infrastructure, offering an incomplete and biased perspective. This study proposes to carry out a complete analysis of the costs of a virtual university using an Activity-Based Costing (ABC) model to determine the percentage of the budget consumed by each of the activities involved in the training process. The results show the significant influence that instructional design and teaching activities have on virtual modalities (62.5% of the set of activities), thus highlighting the importance of human resources in maintaining educational modalities mediated by technology. Understanding the importance of human capital and its contribution to offering a quality and innovative educational service is fundamental to consolidate a model that can improve access to education for populations with major difficulties.

Proposal for the Cost Model Based on Causal Activities to Rationalize the Decision-Making Pricing. Applied Study in the General Company for Leather Industries – Baghdad

Purpose: The aim of this study is to shed light on the concepts of activity-based costs by studying and analyzing the relationship between activity-based cost reduction and the consolidation of pricing decisions, with proposing an activity-based cost model in the analysis of additional costs and the products that cause this to happen. Theoretical framework: The proposed model and recommendations contribute to making this company apply modern cost systems that help control cost elements as well as provide annual activities information on a database, in addition to its contribution to making pricing decisions related to products. Methodology: The research methodology is based on cost analysis and pricing decisions, as it chose the General Company for Leather Industries in Baghdad, one of the companies of the Ministry of Industry and Minerals, and the data was analyzed by analyzing the values ​​through cost pools. Study and sample population: Account managers and employees in the General Company for Leather Industries. Findings: The conceptual framework is useful for the company's management, account managers and control to make the company more effective in allocating costs based on activities and knowing the reasons for the high costs due to the use of traditional methods of costing. Research, Practical & Social implications: The study can benefit the company in controlling the high additional costs and controlling the pricing decisions of industrial products, especially the leather industry. Originality/value: The value of the study is tested the relationship between additional costs and pricing decisions using the activity-based cost method, which was applied in the General Company for Leather Industries.

Unit Cost Calculation of Elective Caesarean section without Complications Based on The Time-Driven Activity-Based Costing Model

Unit Cost Calculation of Elective Caesarean section without Complications Based on The Time-Driven Activity-Based Costing Model

ACTIVITY-BASED COSTING: A PRACTICAL MODEL OF COST CALCULATION IN PSYCHIATRIC HOSPITALS.

The aim: This paper is an analytical and descriptive study of the use of the Activity Based Costing (ABC) system in mental healthcare institutions for the allo¬cation of overhead costs of auxiliary units that provide non-medical services. The realistic estimates obtained using this costing system will help improve the allocation of resources, especially in the conditions of increased number of patients, and to control overhead costs, ensuring the reduction of non-productive expenses, increasing the efficiency and effectiveness of the mental health and psychosocial support institution. Materials and methods: The study describes and uses ABC as a system and method for calculating inpatient care costs in 2022. The cost of medical services will be calculated as the sum of direct and overhead costs. Overhead costs into inpatient care consist of medical support units overhead costs and non-medical support units overhead costs. Overhead costs in non-medical support units were allocated to the cost of services within the cost centers:hospital departments that specialize in the treatment of specific mental health conditions. Expert opinion regarding the alignment of the cost allocation base with the factors identified for the allocation of each group of overhead costs in the mental health and psychosocial support facility was taken into account . Results: Calculations showed the impracticality of using a single tariff for psychiatric care medical services for adults and children in inpatient conditions, since there are cost centers, namely, clinical departments of health care institutions, which consume a larger amount of resources. In particular, these are the departments providing the treatment of psychotic disorders caused by taking psychoactive substances, as well as schizophrenic, organic disorders, including symptomatic, mental disorders). Accordingly, the tariff for such medical services should be higher. Conclusions: ABC is applicable in mental health care institutions and can help to efficiently cost processes, and thereby overcome a key challenge: to overesti¬mation or underestimation of costs into a medical services. Cost assignment through ABC generated more accurate cost estimates, which suggests that model of cost calculation ABC is more able to address complexity in mental health care institutions. ABC should be gradually incorporated into an estimated approach to costing leads, to progressively bring reliable cost-accounting practices to mental health care institutions.

Modelling of Wire Arc Additive Manufactured Product Cost

Wire Arc Additive Manufacturing (WAAM) is a promising additive manufacturing process that offers unique opportunities in product manufacture, repair and refurbishment. Cost is an important criterion in selection of a manufacturing process. In today´s competitive manufacturing scenario, manufacturers are striving to keep costs down while maintaining the quality of their products and processes. Therefore, the aim of this paper is to present a cost model for calculating the costs of products manufactured using the WAAM process. An activity-based cost (ABC) model is developed to estimate the cost of WAAM products. All activities and their cost drivers involved in production of WAAM parts, from design to shipment to the customer are identified. The final product cost is expressed as the total of all individual activity costs. Using the proposed cost model, a case study comparing the product cost using WAAM and pure CNC machining approaches is also presented in this paper.