Internal Costs Research Articles

The role of digital transformation in mergers and acquisitions

How digital transformation influences mergers and acquisitions (M&A) in firms is a significant yet seldom-explored inquiry. We argue that, differing from the “winner-take-all” logic observed in M&A undertaken by born-digital enterprises, digital transformation initiatives pursued by traditional firms can enhance long-term M&A performance by mitigating internal control costs in terms of organizational inertia. The findings from an analysis of M&A activities conducted by publicly listed Chinese firms demonstrate that the digital transformation efforts of traditional enterprises possess the potential to substantially augment long-term M&A performance. Nevertheless, this facilitative impact may encounter limitations due to structural inertia, strategic persistence and external pressure. Moreover, when compared to “technology-based” digital transformation, “application-based” digital transformation exhibits a superior capacity to facilitate long-term M&A performance by alleviating routine rigidity. This study extends the application of organizational inertia theory to the digital economy era and provides practical insights for enterprises that are implementing digital-transformation strategies.

Evaluating Scientific Potential in Kazakhstan: A Regional Index Assessment Approach

The role of human resources in increasing competitiveness is enormous, including people with higher education, a certain status or academic degree, as well as knowledgeable human resources. The objective is to identify the scientific potential across Kazakhstan’s regions using the index assessment method and to analyze the differences between regions. Thus, the authors determine the scientific potential in the regions by the method of index assessment, using factors such as the proportion of people working in the field of science in the region and the amount of spending on science in that region. Conducting a regional analysis provides important information in the management of the state. According to this rating, the cities of Abay region (0.27), Almaty (0.58) and Astana (0.44) were in the lead, and Turkestan (0.02), Atyrau (0.02) and Ulytau (0.001) were in the last place.After all, since most of the scientific research organizations and universities are located in Astana and Almaty, the funds allocated from the Center for science and the number of people engaged in science are concentrated in these cities. This article also revealed the correlation of factors affecting the number of people involved in science in the country’s regions. As a result of the study, it was found that the number of people engaged in science in the regions is directly affected by the internal costs of research work in the regions. At the end of the article, recommendations were given on increasing scientific and high intellectual potential. These recommendations can be used by persons and organizations interested in the development of Science in the regions and applied to the teaching aids of higher educational institutions.

Проблемы и тенденции развития науки современной России

The work provides assessments of activities in the field of science, in the field of research and development. The research was carried out on the basis of constructing econometric models using Rosstat data. One of the main trends is the reduction of internal costs and state budget expenditures on research and development. The profitability of assets for carrying out scientific research and development is falling, and if current trends continue, the field of activity in question will become economically ineffective in the coming years. The number of patent applications filed by Russian applicants is falling. The human resources potential of science is declining. At the same time, there is a decrease in the number of doctors and candidates of sciences at such a pace that if the current trends continue, in 35 years there will be no doctors of sciences left in the country, and in 45 years there will be no candidates of sciences left in the country. Another trend is a decrease in the proportion of graduate students who defended their candidate of science dissertations in a timely manner. If current trends continue, there will be no postgraduate graduates who have defended their Ph.D. dissertations in a timely manner over the coming years.

Batch-sizing and machinability data systems for milling operations: An optimal sustainable cost of quality approach

Nowadays, manufacturers make every effort to achieve a higher quality of their products at an attractive cost. With all the introduced legislation and incentives in the developed world to address global warming, machining shops in the West also strive to cut greenhouse emissions. This article offers an optimal approach to the micro Computer-Aided Process Planning (CAPP) problem to optimize the internal quality cost and buffering effect while keeping the environmental impact low. To optimize the machining parameters, the mathematical model is developed for different milling operations, face, side, and peripheral. cutting speed, feed rate, axial depth of cut, radial depth of cut, nose radius, and batch sizing while maximizing profit and meeting customer demand. A Mixed-Integer Nonlinear Programming (MINLP) model is formulated and solved using Classical Constrained Nonlinear Optimization (CCNO) and Genetic Algorithms (GAs). Surface roughness, used as a metric to evaluate the desired quality level of a finished machined part type, is modeled as a Gaussian random variable to model the surface roughness of the machined part utilizing a cumulative normal distribution. The ratio of rework and scrap is calculated in terms of the surface roughness of the machined part shifting away from the target and exceeding upper and lower specification limits. The internal failure cost model, addressing both scrap and rework, is developed based on Taguchi’s quadratic loss function. CCNO is employed to validate the results obtained by GAs, relaxing the lot-sizing integrality constraint and, thus, the convexity of the produced relaxed model. An iterative method employing a developed multi-regression model is used to solve for the expended power consumption (an inherent highly nonlinear environmental criterion of the developed model) within both GAs and CCNO. This study reveals that the machining parameters substantially impact the cost components of the objective function as well as the scrap and rework quantities. A stringent quality cost target can force the model to optimize the feed rate and nose radius to minimize the internal failure quality cost while improving the environmental impact, including direct and indirect power consumption and CO2 emissions considerations.

Quantifying the external costs of autonomous on-demand ride pooling services

Mobility On Demand (MOD) services, such as ride-pooling, provide convenient and cost-effective transportation options. While previous studies focused on operational costs and service quality, we take a broader perspective by examining the external costs associated with autonomous ride-pooling services. Incorporating external costs into the design and evaluation of MOD services enables a comprehensive understanding of their impact on the entire urban population, informing effective regulations and incentives. We present an approach for calculating space-varying external costs, accounting for factors like air pollution, climate impact, noise and accidents. These costs are integrated into FleetPy, an agent-based simulation tool for ridesharing analysis and optimization. A case study in Munich uncovers the tradeoffs between external costs, internal costs, and service quality. Our findings suggest that mid-sized vehicles with a three-person capacity strike a balance between energy efficiency and transport capacity. By applying our approach, external costs can be reduced by up to 37%.

CAPP-GPT: A computer-aided process planning-generative pretrained transformer framework for smart manufacturing

Smart manufacturing (SM) constitutes the backbone of Industry 4.0 (I4.0), allowing for heightened autonomy of the various interacting cyber-physical systems, making the various entities on the production floor. Connectivity, a vital enabler, plays a crucial role through state-of-the-art Digital Twinning (DT) technologies driven by underlying innovations like the industrial Internet of Things, Cloud Computing, and advancements in sensory devices. DT, which plays a vital role in the various planning functions under the production and operations management umbrella, is being used in the developed combined CAPP-GPT (Computer-Aided Process Planning-Generative Pretrained Transformer) and production scheduling approach to address disruptions on the shopfloor and in self-healing of the manufacturing processes at a micro-CAPP level by optimally adapting the process parameters and the developed toolpath on the fly based on online process signature measurements. In a leap commensurate with that which has taken place in Natural Language Processing-Large Language Models (Chat-GPT), similar efforts are currently being undertaken to parse CAD data structures and blueprints, fusing operations research and predictive analytics algorithms to carry out setup planning as well as sequencing and grouping manufacturing sub-operations. A hybridized Optimization and Machine Learning (ML) approach is employed where Logical Analysis of Data is used to solve the problem heuristically, exploiting various generative and variant methods at heart. Another extension of this macro-CAPP problem is being tackled by integrating the problem with delayed product differentiation, lot-sizing, and transfer line balance for futuristic batch-production shops employing Hybrid Manufacturing (HM) and Smart Assembly. At the micro-CAPP level, HM process parameters are optimized using a comprehensive approach employing the Taguchi loss function to assess surface roughness, internal failure costs, and other criteria, including greenhouse gas emissions and expended energy. Online measurements of the process signatures are also employed to adapt the initial set of process parameters using different automatic control schemes. ML is used to identify the process parameters carrying simulations on Simulink before the system is deployed.

Technology entrepreneurship in innovation ecosystems: features of functioning and forms of support

Developing a business based on innovative ideas, technology entrepreneurship plays a leading role in achieving the goals of sustainable development of the national economy. At the initial stage of development, technological startups need resource support to transform into an innovative company. Such support can be provided by innovation ecosystems and technology entrepreneurship ecosystems. Government support for the activities of small innovative enterprises is an important factor in the development of technology entrepreneurship. The purpose of the study is to develop an organizational and functional model of technology entrepreneurship. The level of development of technology entrepreneurship at the federal level and at the level of the constituent entities of the Russian Federation was assessed using indicators of the share of small enterprises in the total number of organizations, the share of innovative products of small enterprises in the total volume of manufactured products, expenditures on innovative activities, and internal costs of research and development. The author used data from the Federal State Statistics Service. An organizational and functional model of technology entrepreneurship is proposed, the main elements of which are the business community, investors, scientific and educational organizations, innovative enterprises, innovative and technological infrastructure, support institutions. It is shown how a startup, scaling a business model, can turn into an innovation business, what forms of support can ensure this, how intercompany interaction is organized within the innovation process. It is recommended to develop forms of cooperation between the business community and universities, stimulate innovative enterprises in the regions, support technological startups, and improve forms of government support for technology entrepreneurship. For the growth and development of startups in the innovation ecosystem, mechanisms for productive interaction of all its elements and effective forms of support for technology entrepreneurship are needed.

Impact of artificial intelligence technology applications on corporate energy consumption intensity

Artificial intelligence (AI), as a new technology, not only revolutionizes economic development, but also provides an opportunity for environment governance. Extant studies primarily explore the environmental performance of AI from a macro perspective, while evidence on how AI technology applications affect firms’ energy-saving behavior is scarce. Employing Python technology to recognize AI-related keywords in the annual reports of listed enterprises and adopting data on corporate energy consumption from 2011 to 2020, we explore the impact of AI on corporate energy consumption intensity (CECI) and its mechanisms. We observe that AI technology applications reduce CECI. After a range of robustness tests, the conclusions are still solid. The mechanism analysis reveals that AI cuts CECI through spurring firm green innovation, stimulating firms to introduce new equipment, and reducing firms’ internal management costs. Heterogeneity analysis reveals that this negative impact is more prominent for SOEs and private enterprises’ energy intensity; we also find that this effect is more pronounced for high-tech industry enterprises and high-polluting enterprises. Our findings provide micro evidence for policymakers to reduce corporate energy intensity and realize energy conservation and emission abatement targets.

Who gets redeployed? Inventor characteristics and resource redeployment decisions

AbstractResearch SummaryWhile the literature highlights the benefits of internally redeploying resources, there is less empirical guidance on which resources are most likely to be redeployed. We examine the relationship between inventor characteristics and redeployment decisions, motivated by the tension between costs and benefits of keeping a resource at the source unit versus moving it to a new target unit. We argue that inventors with inventive breadth are more likely to be redeployed, whereas broker inventors are less likely to be redeployed. Moreover, we consider two source‐unit characteristics that influence internal opportunity costs: resource slack and knowledge interdependence. We test our arguments on the redeployment of inventors following an exogenous profitability shift in the US petrochemical industry in 2012 and find support for our predictions.Managerial SummaryManagers move resources between business units to respond to profitability shocks, but which specific resources do they move? Examining the inter‐unit transfers (redeployments) of inventors between business units following the unexpected profitability disparity between ethylene‐based business units and others in the US petrochemical industry, we find that generalist inventors are more likely to be redeployed, while brokers in the collaboration network (inventors who connect others) are less likely to be redeployed. In addition, conditions that alter opportunity costs at the source unit matter. Larger proportions of generalists (and brokers) facilitate redeployment of either type, and knowledge interdependencies in the source unit mitigate redeployment.

Research on the application of financial sharing service in internal supply chain cost management -- taking Haier as an example

Research on the application of financial sharing service in internal supply chain cost management -- taking Haier as an example

Accounting and analytical support of internal cost control in the health resort institutions

Subject. This article focuses on the development of methodological tools for accounting and analytical support of internal cost control in economic entities of the health resort complex. Objectives. The article aims to develop the theoretical and methodological foundations and detail practical provisions for accounting, control and analytical support of internal control of the costs incurred, confirming the voucher cost and helping minimize the amount of invested financial and intellectual resources. Methods. For the study, I used the methods of grouping, generalization, expert assessments, comparative analysis, classification, factor analysis, and modeling. Results. The article clarifies the concept of Health Resort Service, develops a set of principles that reveals the methodology for the formation of internal management reporting and its structural elements for grouping information, and it offers a variant of regulation of internal cost control. Conclusions and Relevance. The developed multi-component structured model of internal control for analytical assessment and monitoring of costs, determining their compliance with the planned ones, within the framework of the business process Providing a Comprehensive Health Resort Service, is universal for economic entities of the health resort complex, which optimizes control procedures. The key proposals for the formation of methodological approaches to the organization of internal cost control in health resorts can help minimize entrepreneurial risks and increase the efficiency of activities.

Reconsidering banning the imports of waste paper: The implications for the environmental, economic and health impacts

Waste paper (WP) has become indispensable raw materials for paper industry. China has banned all imported WP since 2021, this one-size-fits-all policy has caused wide debates due to lack of a multiple and systematic assessment. Herein, a three-dimensional comprehensive assessment of environment, economy and health risk was established to compare non-deinking paper (NP) and deinking paper (DP) with imported/domestic waste paper (IWP/DWP). Assessment indicated that IWP was strongly recommended for NP with 20.96 %, 17.39 % and 20.92 % lower than DWP in environment, economy and health risk, respectively. Although the health risk of IWP was 58.14 % higher than that of DWP, it did not exceed the threshold, IWP was still recommended for DP with 19.14 % and 4.18 % lower than DWP in environment and economy. Toxicity-related impact categories predominated at midpoint level, especially human carcinogenic toxicity (50.97–59.12 %), which was largely caused by the emission of large quantities of toxic pollutants from the key processes (e.g., electricity generation (25.14–38.28 %) and wood pulp (31.99 %)), especially chromium (VI) (51.08–60.21 %). While human health (93.89–95.1 %) dominated all endpoint impact categories, which was mainly attributed to the top substances (i.e., CO2) from electricity generation (28.47–42.78 %). Importantly, actual cost might be markedly underestimated without considering environmental cost, the ecosystems damage was the primary source of external cost, and the internal cost was concentrated in raw materials (47.57–61.67 %). The health risk of contaminants in WP was closely associated with their manufacturing process and raw materials. The major health risk resulted from heavy metals, particularly for As and Cr. In conclusion, banning all IWP should be deliberated carefully, high-quality IWP should be imported to decrease environmental and economic burdens via enhancing supervision, performing import subsidies and tax incentives, and administrative approvals (facilitating industry consolidation and merging small and medium-sized enterprises).

Robust Design Based on Cost-Quality Model in Micro-Manufacturing

This paper proposes a novel total cost model for the micro‐products' entire life cycle that takes into account the uncertainty of the model parameters. The total cost includes pre-sale manufacturing and post-sale warranty costs. Additionally, different marketing strategies are also given based on the weight of internal and external costs. Furthermore, limited data and unknown effects in experiments may cause large errors in parameter estimates. This could prevent the achievement of reliable designs. To address this, robust optimization and interval estimation are used. This approach reduces the impact of uncertainty on parameter estimates. It ensures optimality and robustness in micro-manufacturing parameters. Example analysis and numerical simulation results show that the proposed method assists companies in selecting the optimal manufacturing parameter level that aligns with their marketing strategies. Besides, considering uncertainty factors can ensure that the optimization results remain guaranteed, even under the worst-case scenarios.

Cost of Quality Management: Encouraging Business Leaders to Manage and Invest in Quality Enhancement

The quality management is a complex set of constant activities aimed at improving the quality of products and services, regularly evaluating and monitoring it, preventing defects, limiting and reducing malfunctions, and correcting production defects before and after the sale of goods. Ineffective quality management leads to such problems as product returns, claims, replacement or repair, loss of customer base, damage to brand reputation, etc. This paper aims to analyze advanced strategies, methodologies, methods and tools for effective control of quality management costs, ways and means of their strategic integration into the practice of business quality management, emphasize the importance of optimizing the cost of quality management in enterprises. The proposals developed in this article are demonstrated on the example of the woodwork division of MEKKERA (MDM), a subsidiary of the HASNAOUI Group in Algeria. An approach represented in the article combines qualitative and quantitative methods. Qualitative data collection involved semi-structured interviews with four company managers, processed using NVIVO software. The purpose of these interviews was to understand the reasons that led the company to include the evaluation of the Cost of Quality in its quality objectives for 2023, as well as the perspectives and goals aimed for by the company in this initiative. A Quantitative analysis relied on secondary data from the company’s database: direct quality costs were calculated using the P-A-F and Ferrebœuf models, prevention and detection measures’ effectiveness and production process performance were evaluated; key performance indicators for indirect quality acquisition costs were defined. Findings revealed the company exceeded set thresholds for internal and external failure costs, necessitating improvements. Ishikawa method identified causes, and corrective actions were proposed using Failure Mode and Effects Analysis (FMEA).

Link-based full cost analysis of travel by automobile

This paper develops a link-based full cost model for auto travel, which identifies both internal and external costs of travel, and gives a link-based cost estimate for the Minneapolis – St. Paul (Twin Cities) metropolitan region. The key cost components are time, emissions, crashes, user monetary, and infrastructure. The estimates show that the average full cost of travel is a $0.694/veh-km traffic-weighted average over the study area, of which the time and user monetary costs account for approximately 70% of the total. Except for the infrastructure cost, highways are more cost-effective than other surface roadways considering all the other cost components, as well as the internal and full costs. Quantifying the full costs of auto travel is essential for making sustainable investments.

Инновациялық қызметті қаржыландыру жүйесінің тетіктері

The article is devoted to the issues of financing innovative processes that have a direct impact on the development of the state as a whole and on the success of each entrepreneur in the competitive struggle in the market. The study of the financing of the innovation process was carried out in theoretical and analytical terms, the economic levels of innovation activity were determined. The urgent need to solve the problem of modernization and innovative development of economic systems, which requires the development of the concept of financing innovative processes, is substantiated. Theoretically, the elements that include the innovation financing system and the functions of the financial mechanism are disclosed. The situation is described when the current system of financing innovation activities contributes not only to achieving the necessary level of financial support and internal costs, but also to the development of innovative enterprises from the stage of creation to the stage of expansion. As an example, the analysis of the compliance of the financing mechanisms of the Karatau-Nesie LLP enterprise with certain principles applied within the framework of the innovation financing system was carried out. Taking into account the degree of Kazakhstan's economy in technological development, it is proved that in order to stimulate innovation activity and the development of the venture industry, it is necessary to create conditions for state support and the development of a venture financing system.

Is energy firms' investment behavior more sensitive on corporate perception of monetary policy?

Central bank communication has emerged as a non-traditional monetary policy tool capable of mitigating adverse effects, policy uncertainties and stabilizing expectations, thereby affecting corporate investment behaviors. Additionally, monetary authorities among the pioneers are performed in promoting green growth. To shed light on the role of corporate perception of monetary policy in corporate investment and tell the heterogeneous effects between energy and non-energy firms, we employ the Chinese listed firm data during 2011 to 2022 to estimate the relationship. Our empirical findings reveal that corporate firms' investment behaviors are significantly sensitive on corporate perception of monetary policy. In specific, energy-intensive firms are more sensitive on such effects. Moreover, a series of working mechanisms is well explored. The corporate perception of monetary policy helps firms reducing financial risk, alleviating internal financial cost and external bank financing pressure to facilitate energy-intensive firms' investment behaviors. Furthermore, the heterogeneous of non-SOEs and high regulation level highly motivates energy-intensive firms to invest.

Life Cycle Assessment and Life Cycle Costing for the Production of Hydrangeas in Antioquia—Colombia

In the floriculture sector, it has been identified that the use of agrochemicals, fuels, and various raw materials has a significant impact on the environment, and, from an economic point of view, their use improves the quality of life of the people involved in the activity, and at the same time contributes to the development of the territories. Therefore, in order to address these issues, sustainability-oriented solutions have been proposed. This study focuses on the performance of a Life Cycle Assessment (LCA) of hydrangea production, addressing its environmental and economic dimensions, using the conventional method according to ISO 14040 and ISO 14044 standards. The functional unit was defined as one kilogram (1 kg) of hydrangea stems from a 36-week production cycle in three different crop sizes, as follows: small (0.45 ha), medium (1.20 ha), and large (2.99 ha). The boundaries of the gate-to-gate system were used, including the stages of growing and transporting of the flowers, to delivery to the marketer. The results showed significant environmental impacts in the areas of climate change, human toxicity, and acidification, resulting from phytosanitary management; use of fertilizers, fuel, and raw materials for infrastructure; and packaging of flowers for delivery to the marketer. In addition, from an economic point of view, it was shown that the most significant internal costs were associated with the cultivation phase, while the external costs were associated with CO2 emissions. The return on investment was less than 0.15 years, with human productivity more than 73%, and infrastructure investment less than 16%. These results highlight the need to implement effective measures to mitigate negative impacts and promote more sustainable practices in floriculture to further strengthen the sector, as hydrangeas are an export product.

Formulation a definition for the phenomenon of internal control of expenses for scientific (scientific and technical) enterprise activity

Scientific activity in Ukraine is a special kind of economic and social relations that forms the knowledge and innovative products. Currently, a significant part of scientific institutions are in a difficult financial situation due to the need of the state to finance the defense spending. This requires researchers to economically spend the money received. That is why, among the main tasks of scientific organizations there is a strict control of costs for scientific works, which requires the creation of a fundamentally new theoretical and methodological base within the framework of which the development of the existing conceptual apparatus and the discovery of the latest methodological approaches for cost control during research and development are envisaged. Determining the costs of creating a scientific product is carried out by a special direction of the internal activity of the enterprise — accounting for the costs of scientific activities in a specially formed unit or a separate employee, however, the work of this unit or employee should be monitored, for which it is advisable to form an appropriate functional management body — internal control costs for researches. The practice of accounting costs for the scientific activity and the regulatory framework for such accounting is formed on the basis of the rules established for production and commercial enterprises, there is a need for the development and implementation of new methodological and organizational solutions for streamlining the activities of specific accounting and regulatory bodies that have as their object the costs of scientific works. To start the processes of forming an orderly activity to control the costs of research in this article formulated the definition of the phenomenon of internal control of costs for scientific activities of the enterprise. This will make it possible to single out in the general management system of scientific organizations the employee (units) responsible for controlling the costs of scientific work, determine their goals and special functions, determine the composition of the labor intensity of control operations and develop cost control regulations.

Construction and Practice of Hospital Pharmacy Practice Teaching Mode under the Reform of DRG Payment Method

Objective: this research for DRGs payment reform, in order to build a new teaching mode of traditional pharmacy practice and DRGs payment reform background, the pharmaceutical interns add DRGs disease grouping and ICD disease coding teaching and DRGs disease grouping of pharmacoeconomics teaching, training more able to adapt to the medical reform of drug service personnel and hospital performance management and internal cost control training practical pharmaceutical service talents. Methods: Through the implementation of different internship programs, to make the effect evaluation. Results: Combining the traditional clinical pharmacy practice with the background of DRGs payment reform, the teaching of DRGs disease grouping, ICD disease coding teaching and pharmacoeconomics of DRGs disease grouping. Conclusion: In this study, the practice of Chinese pharmacy, prescription practice, clinical pharmacy and ward practice combined the teaching of DRGs disease grouping and ICD disease coding with the medical insurance department, which promoted the smooth implementation of DRGs and reflected the value of clinical pharmacists in ensuring effective, safe and economical drug use.