Cost Management Methods Research Articles

Investigation of the relationship between contemporary cost management methods and improvement in financial performance

This article gives an overview of contemporary cost management (CCM) methods (target costing [TC], activity-based costing [ABC] method, total quality management [TQM]), and presents the benefits of introducing them to business practices. Previous studies have considered the possibility of cost reduction and optimisation by introducing CCM methods thus improving company performance. This explorative empirical study is a first step in investigating the relationship between CCM methods and financial performance. The aim of the research is to clarify the conceptual and methodological ambiguities surrounding the justification of using adopted measurement scales. This study is based on the outcomes of a questionnaire completed by a representative sample of 48 Croatian limited companies. The findings highlight the influence of CCM methods on the financial performance of the companies surveyed. They also provide the basis for recommendations to management accountants and raise more questions for research. Based on psychometric characteristics of measurement constructs, the questionnaire applied in this study can serve as a starting point for instrument development in future research.

A Study on Cost Management Method with Material Flow Cost Accounting

A Study on Cost Management Method with Material Flow Cost Accounting

Strategic cost management as instrument for improving competitiveness of agribusiness complex

Cost accounting as a segment of an integrated accounting information system by generation of the relevant information provides significant support for both financial and managerial accounting. The above information represents the information base for decision making of internal and external users (management, investors, creditors and other stakeholders). In this paper a special attention is paid to contemporary systems of cost accounting, the application of which can be seen as an integral part of the effort undertaken in order to measure and control costs, since cost management is one of the indispensable elements to achieve, maintain and improve the competitiveness of enterprises. Having in mind the significant potential the Republic of Serbia has in the field of agricultural production, the aim of this paper is to highlight the challenges and specifics of cost management in the agribusiness complex enterprises. Hence, this paper discusses the modern systems of cost accounting as well as the cost management methods suited to the specific agricultural management activities, which could help to the local companies in efforts for share in the global agri-food products' market.

Cost Components of Interest Rate Charged By Indian Self Help Groups Financed By Not-For Profit Microfinance Institutions

Although, interest rate charged by microfinance stimulate of lot of ethical debate. Very few studies in microfinance detail the cost components of interest rates paid by the borrowers. Setting the optimal interest rate with a dual goal of financial sustainability and fighting against poverty is a complex task for microfinance lending. In this backdrop, this paper examines the various cost components of interest rate changed by Indian Self-Help Groups (SHGs) that are financed by not-for profit Microfinance Institutions (MFIs). The study uses neo-classical framework for the analysis of interest rate determinants like cost of funds, administrative (operating) cost, opportunity cost, travel costs and some margin to sustain the business. The data have come from a survey of 106 women SHGs in ten villages in the state of Karnataka, India. The study finds that the cost of fund and other costs associated in microfinance significantly influence the rate of interest and the SHGs need to reduce efficiently other costs associated with writing and maintaining the accounts, auditing, and hospitality offered, through innovative cost management methods of lending. As a result, there would be a welfare gain for the borrowers through reduced interest rate on loans.

Antecedents of the adoption and success of strategic cost management methods: a meta-analytic investigation

In the course of this study, a quantitative meta-analysis of the antecedents of the adoption and success of strategic cost management methods was conducted, based on 50 primary studies. Primarily qualitative reviews of previous literature in this field were expanded by examining and comparing the effect sizes of and between antecedents of primary studies and by integrating their diverse measurements of effects. The mediation of relationships between antecedents was quantitatively explored and integrated using a comprehensive structural model which is unaccounted for in current literature reviews. Quantitative moderator analyses demonstrated that conflicting effects could be explained by referring to country of origin, firm size, objects of analysis, and the position of respondents. The majority of these relationships could be seen to be valid across countries and industries. Surprisingly, however, most of the external, technological, and organisational context variables had no significance or only a weak impact, whereas a network of internal individual characteristics of responsible managers (such as the identification with cost management or the methodological knowledge of managers) had a strong correlation with the adoption and success of cost management methods.

Систематизация методов управления стоимостью компании

Систематизация методов управления стоимостью компании

Elaborating Cost and Performance Management Methods in Transport

Transport companies are facing management problems of enhancing operation efficiency at limited resources. The decision-making procedures applicable to solve such problems can be made more reliable if relevant information on basic components of business or technology processes are available. This information base can be produced by using cost and performance management methods combining financial and technology system parameters. The paper aims at summarising the research results conducted in the field of developing cost and performance controlling tools using this approach for the case of different transport companies. After explaining the main modelling principles, the experiences of empirical pilot projects are discussed. The preliminary results of these projects have proved the significance of the elaborated methodology. At the same time, it can also be concluded that the modelling tool shall be adapted to the specific circumstances of the examined transport companies before practical implementations. KEY WORDS: cost calculation, performance management, controlling

Cost Management Method with Value Engineering

The use of value engineering in China has grown significantly in the last twenty years. With keen competition in construction market, the cost control is the key measure to increase the economic benefits in the company and enhance the core competency of enterprises. This paper makes a holistic appraisal of value engineering as used in Chinese construction industry by investigating current theory and practice. It evaluates value engineering projects. This research suggests a methodology for the cost control process in construction enterprise, aiming at the correct systematic approach of Value Engineering and target-costing in cost management. The value engineering and target-costing are complementary processes. This proposed approach was validated in a case study, aiming at improved product cost, functionality and quality accomplishment, in accordance with customer needs and the company strategy.

Book Review: Cost management in shipbuilding

Shipbuilding is characterized by the specific features of the unit production, high complexity and long project duration as well as global competition. Therefore, the shipbuilding process requires special cost management procedures. Against this background the authors demonstrate how effective cost management methods and processes strengthen and ensure a manufacturer’s competitiveness in the maritime industry. A main focus of the book is on the available system support for efficiently planning, analysing and controlling a ship’s costs in all building phases. In addition to design and manufacturing, also the in-service phase of the ship is included in order to optimise the whole life cycle cost.The book is based on knowledge, which the authors gained by more than 10 years experience in industrial cost management and shipbuilding and addresses specialists confronted with the practical challenges of cost management in everyday business.DOI: http://dx.doi.org/10.3329/jname.v8i1.7068

“Target-Operation” Cost Management Model

Objective cost management and Activity-Based cost management are both more advanced cost management methods, but they are difficult to overcome their own shortcomings. In order to overcome the defects of these two methods of cost management, in the meanwhile, to find a new way to perfect the cost control system in enterprise, the writer planned to make this study. By analyzing and summarizing the domestic and international research results based on the integration of the Objective cost management and Activity-Based cost management, the writer pointed out the lack of current research and raised from the development, design, procurement, production and service to the full range of “Target-Operation” cost management, and designed three functional modules, including target cost estimate module, operation chain optimization module, cost breakdown and control module and auxiliary module to improve the model's content. This study offers a new way for the managers of enterprises in the field of cost control system and strengthening enterprise competitive power.

Development of a Cost Management Method for Road Snow Removal in Cold, Snowy Regions

The reduction of snow removal expenditures is a pressing need for governments in Japan. Reducing snow removal expenditures at the national government level requires the following: 1) analysis of the cost structure, 2) development of a method for comparing costs among regions, and 3) development of cost reduction standards. The authors studied methods for objectively determining the cost effectiveness of snow removal, toward inter-regional comparison that has been regarded as difficult. To this end, the authors developed a model that uses a linear regression line of unit cost of snow removal that is based on the relationship between snow removal costs and cumulative snowfall. This study presents how the model has been developed and discusses its applicability by using actual snow removal records. The paper also examines applicability of the model when the data from which the model is derived include those for an extremely snowy year and an unusually less snowy year.

Development of a Cost Management Method for Road Snow Removal in Cold, Snowy Regions

Development of a Cost Management Method for Road Snow Removal in Cold, Snowy Regions

Teaching Cost Management: A Strategic Emphasis

ABSTRACT: Cost management has been tied in the past to the concepts of score-keeping, attention directing, and problem solving, but the expectations of accountants in today's world have changed dramatically, extending well beyond these concepts. This paper presents a different way to view cost management. It is not a planning or decision-making focus, but instead a focus on helping the organization be successful, through the implementation of an effective competitive strategy. Strategy is implemented by the appropriate use of cost management methods. The “why strategy?” question is answered by a review of survey findings, a discussion of the potential errors in nonstrategic decision making, and a review of changes at the Institute of Management Accountants that reflect a greater emphasis on strategy, including a new definition of management accounting which focuses on strategy. The paper shows the strategy-based content flowcharts for each of the three courses: management accounting, cost accounting, and advanced management accounting.

3103 製品ファミリに対応した製造BOMによる原価管理手法(OS3-1 生産管理)

3103 製品ファミリに対応した製造BOMによる原価管理手法(OS3-1 生産管理)

Strategic Cost Management in E-Supply Chain

Strategic cost management of the E-supply chain is one new concept which integrates three fields: strategic cost management, supply chain management and internet application, and develops one of the most important tools about how to apply E-supply chain to the improvement of the competence in creating wealth for firm shareholders and market competitive capacity. This study has two objectives: one is to discover the cyber-value chain coordinating mechanism which is one new mechanism other than market mechanism and firm mechanism; the other one is to construct the framework model of strategic cost management accounting of E-supply chain based on the new mechanism. More specifically, this paper develops three main methods of strategic cost management (including sharing information beyond one company boundary, the synergic management of the product design, and synergic utilization and management of intellectual assets), in order to improve the competitive capacity and to solve some current problems in the cost management beyond company boundary.

A roadmap for cost engineering in the automotive supplier sector

The advent of global competition has introduced the need for new competitive manufacturing strategies. The implementation of new strategies has a dramatic effect on measuring product cost compared to traditional management accounting methods. It is found that new cost management methods are required to measure success and support decision-making within the new strategies. One example is the consequences of using traditional management accounting methods for measuring the effects of lean having catastrophic results during reporting. Such results steer managers away from lean manufacture based upon a false picture of the potential benefits. This research examines cost management methods potentially applicable within the automotive supplier sector. Because of the lack of cost-related data collected within the supplier sector companies, this paper ends with a demonstration of a novel method for use in data scarce environments.

Specialty pharmacy cost management strategies of private health care payers.

The rate of increase in spending on specialty pharmaceuticals is outpacing by far the rate of increase in spending for other drugs. To explore the strategies payers are using in response to challenges related to coverage, cost, clinical management, and access of specialty pharmaceuticals and to describe the potential implications for key stakeholders, including patients, physicians, and health care purchasers. Sources of information were identified in the course of providing consulting services in the subject area of specialty pharmaceuticals to health plans, pharmacy benefit managers, employers, and pharmaceutical manufacturers. Specialty pharmaceuticals represent the fastest growing segment of drug spending due to new product approvals, high unit costs, and increasing use. Health care payers are faced with significant challenges related to coverage, cost, clinical management, and access. A variety of short- and long-term strategies have been employed to address these challenges. Current management techniques for specialty pharmaceuticals often represent a stop-gap approach for controlling rising drug costs. Optimum cost and care management methods will evolve as further research identifies the true clinical and economic value of various specialty pharmaceuticals.

A methodology for integrating economic criteria in design and production management decisions

Cost management methods currently have to contribute to the decision support for designers, production managers and manufacturers. This fact leads to the introduction of activity-based costing (ABC), but the exploitation of the concept of activity by non-specialists of accounting requires adapted models and tools. We propose so a methodology consisting in a double modelling of the firm and an adapted tool intended to build and to exploit the models. The object is to support technical decisions about products, equipment, or about the organisation of the firm. The application of the approach in a French industrial site is finally presented.

A review of methods of drug cost management in hospitals.

To stem the ever-increasing cost of health-care various strategies are being introduced by health authorities world-wide. Methods to control drug costs are reviewed with a particular emphasis on hospital-centred strategies and the role of the pharmacist. The literature suggests that no one single strategy is consistently successful and that better results are obtained by using a combination of strategies.

Wireless communication and computing at the construction jobsite

For many years, the walkie-talkie has been synonymous with the construction industry. During jobsite project execution, there are three variables which can either hinder or facilitate successful results, namely, quality, quantity, and timing of information. Wireless data communications technology is capable of delivering just-in-time information within the `last mile' between the trailer and a desired location on the jobsite. This paper reports on a study which surveyed information needs at the jobsite, emerging wireless data communications technology, and assessed the extent to which wireless data technology can fulfill the information needs of the jobsite [J.M. de la Garza, I. Howitt, Wireless communication and computing at the jobsite, Research Report 136-11, Construction Industry Institute, Austin, TX, 1997]. We have organized jobsite information needs into the following ten categories: (a) requests for information, (b) materials management, (c) equipment management, (d) cost management, (e) schedule and means and methods, (f) jobsite record keeping, (g) submittals, (h) safety, (i) QC/QA, and (k) future trends. Each category was analyzed in terms of its appropriateness to take advantage of wireless technology. The four formats considered to transmit information wirelessly were: (a) live voice, (b) live video, (c) batched data, and (d) live data. Current wireless communication technology has been classified into the following five classes: (a) circuit-switched wireless data systems, (b) packet-switched wireless data systems—this class was further subdivided into specialized mobile radio systems and cellular digital packet data systems, (c) wireless local area networks, (d) paging systems, and (e) satellite-based data communications. A primer for wireless communications covering both fundamental and advanced communications concepts has also been included to enable a better understanding of the issues involved in making trade-offs while configuring a wireless jobsite communication system. The example presented in this paper shows how a contractor can define a subset of information needs by choosing from those already articulated herein and determine if a given wireless technology should even be considered as a viable way of meeting the information needs that such company has.