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Cost-benefit (C/B) analysis helps to determine the economic feasibility of business software investments. Research literature and published practices do not recognize substantial software maintenance costs in C/B analysis. Current analyses emphasize the benefits of an initial investment but do not consider the recurring benefits of each enhancement during the software lifecycle. Such analyses could lead to incorrect investment decisions and lost business opportunities. This article aims to review current research on software lifecycle costs and develop a theoretically sound C/B analysis.

This article reviews current C/B analyses and discusses their shortcomings in treating the significant recurring maintenance costs. It analyzes the findings of various studies on software maintenance and synthesizes these findings to identify the nature of various maintenance costs and their benefits. Based on the synthesis, it theorizes various cost and benefit elements for inclusion in a revised C/B analysis.

This article identifies each recurring maintenance cost relevant to C/B analysis. It also identifies recurring benefits from each enhancement that hitherto have been omitted. Finally, this article discusses how these costs and benefits should be treated in the revised C/Bs analysis.

This is a conceptual paper proposing a new C/B analysis and requires an empirical validation.

This article provides a revision of the C/B analysis that is long overdue. It will help to justify a software investment correctly, rank software projects that compete for limited funds and help create a sound software project portfolio. Since 20% of software products may incur 80% of software investment, this analysis will help to make correct software investments and avoid lost business opportunities. This article also describes a practical method to use the revised C/B analysis.

This article provides a revision of the C/B analysis that is long overdue. It will help to justify a software investment correctly, rank software projects that compete for limited funds and help create a sound software project portfolio. Since 20% of software products may incur 80% of software investment, this analysis will help to make correct software investments and avoid lost business opportunities. This article also describes a practical method to use the revised C/B analysis.

Upon completion of the case study discussion, successful students will be able to define and list the steps of time-driven activity-based costing system (TDABC); understand and explain the ideas behind the TDABC; implement the TDABC in customer profitability analysis; draw connections among the cost and profitability analysis; evaluate the importance of better costing techniques in profitability analysis; and make managerial decisions based on TDABC analysis.

Gluten Limited’s financial affairs and operations manager, Fatih, was aware that the company was making very little profit from its operations with its biggest customer. The main reason appeared to be that it delivered its products in bulk to the main warehouses of the customer, which then distributed them to the stores. Fatih believed that products were being sent to stores late, so that their expiration dates passed quickly and they ended up being returned.

The case study documents the past year of Gluten Limited’s delivery operations with one of its biggest customers. It focuses on the effectiveness of its delivery operations and ways to increase profitability by reducing sales returns. The case dilemma involves the choices that Fatih faced following a six-month trial period: either delivering products in bulk to the customer’s main warehouses at lower cost but higher return rates or delivering small amounts directly to stores at higher cost but lower return rates. Fatih needed to decide which mode of customer operations was more profitable and continue that way.

Knowing the importance of determining costs properly in profitability analysis, Fatih made the cost calculations using the TDABC system.

This case was written for use in Cost Accounting and Managerial Accounting classes at the undergraduate level. The focus of the case aligns well with discussions of customer profitability analysis, cost reductions, eliminating non-value-added activities, and profitability of operations. Instructors seeking to emphasize the most suitable costing methods for customer profitability analysis could assign this case.

Teaching notes are available for educators only.

CSS 7: Management Science

Prefabricated products are continually entering the building construction market; yet, the decision to use prefabricated products in a construction project is based mostly on personal preferences and the evaluation of direct costs. Researchers and practitioners have debated appropriate measurement systems for evaluating the impacts of prefabricated products and for comparing them with conventional on-site construction practices. The more advanced, cost–benefit approach to evaluating prefabricated products often inspires controversy because it may generate inaccurate results when converting non-monetary effects into costs. As prefabrication may affect multiple organisations and product subsystems, the method used to decide on production methods should consider multiple direct and indirect impacts, including nonmonetary ones. Thus, this study aims to develop a multi-criteria method to evaluate both the monetary and non-monetary impacts of prefabrication solutions to facilitate decision-making on whether to use prefabricated products.

Drawing upon a literature review, this research suggests a multi-criteria method that combines the choosing-by-advantage approach with a cost–benefit analysis. The method was presented for validation in focus group discussions and tested in a case involving a prefabricated bathroom.

The analysis indicates that the method helps a project’s stakeholders communicate about the relative merits of prefabrication and conventional construction while facilitating the final decision of whether to use prefabrication.

This research contributes a method of evaluating the monetary and non-monetary impacts of prefabricated products. The research underlines the need to evaluate the diverse benefits and sacrifices that stakeholder face when considering production methods in construction.

The European Union’s Digital Markets Act (DMA) calls for far-reaching changes to the way economic activity will occur in EU digital markets. Before its remedies are imposed, it is critical to assess their impacts on individual markets, the digital sector, and the overall European economy. The European Commission (EC) released an Impact Assessment in support of the DMA that purports to evaluate it using cost/benefit analysis.

An economic evaluation of the DMA should consider its full impacts on dynamic competition. The Impact Assessment neither assesses the DMA's impact on dynamic competition in the digital economy nor evaluates the impacts of specific DMA prohibitions and obligations. Instead, it considers benefits in general and largely ignores costs. We study its benefit assessments and find they are based on highly inappropriate methodologies and assumptions. A cost/benefit study using inappropriate methodologies and largely ignoring costs cannot provide a sound policy assessment.

Instead of promoting dynamic competition between platforms, the DMA will likely reinforce existing market structures, ossify market boundaries, and stunt European innovation. The DMA is likely to chill R&D by encouraging free riding on the investments of others, which discourages making those investments. Avoiding harm to innovation is critical because innovation delivers large, positive spillover benefits, driving increases in productivity, employment, wages, and prosperity.

The DMA prioritizes static over dynamic competition, with the potential to harm the European economy. Given this, the Impact Assessment does not demonstrate that the DMA will be beneficial overall, and its implementation must be carefully tailored to alleviate or lessen its potential to harm Europe’s economic performance.

The objective of this paper is to propose a methodology to estimate the benefits and costs of stakeholder engagement (SE). Indeed, in the transport sector, it is consolidated that a good decision-making process foresees the involvement of the main stakeholders, but what are the benefits and costs of the SE? How to quantify these impacts and explicitly take them into account in a cost-benefit analysis? In this paper, an attempt to answer these questions is provided.

In this paper, a methodology is proposed to estimate the benefits and costs of SE. Moreover, the proposed methodology is applied to a case study with an attempt to identify direct and indirect cost and benefit drivers within the context.

A range of examples of the monetary costs and benefits of SE is provided through the case study of the high-speed rail corridor connecting Bari and Naples in Italy.

Limits in quantifying all the aspects of engagement.

To be adopted by public administrations when deciding whether carrying out a project.

Social inclusion is a must in any decision-making process concerning big projects affecting the community.

The original value of this paper is to provide a contribution to the current literature on the quantitative representation of the impacts of SE. Indeed, a methodology to quantify and monetize the costs and benefits of SE is proposed.

This study aims to focus on the supply chain (SC) cost drivers of healthcare industries in the USA, as SC costs have increased 40% over the last decade. The second-most significant expense, the SC, accounts for 38% of total expenses in a typical hospital, while most other industries can operate within 10% of their operating cost. This makes healthcare centers supply-chain-sensitive organizations with limited facilities for high-quality healthcare services. As the cost drivers of healthcare SC are almost unknown to managers, their jobs become more complex.

Guided by pragmatism and positivism paradigms, a cross-sectional study has been designed using quantitative and deductive approaches. Both primary and secondary data were used. Primary data were collected from health centers across the country, and secondary data were from healthcare-related databases. This study examined the attributes that explain the most significant variation in each contributing factor. With multiple regression analysis for predicting cost and Student's t-tests for the significance of contributing factors, the authors of this study examined different theories, including the market-based view and five-forces, network and transaction cost analysis.

This study revealed that supply, materials and services represent the most significant expenses in primary care. Supply-chain cost breakdown results in four critical factors: facility, inventory, information and transportation.

This study examined the data from primary and secondary care institutions. Tertiary and quaternary care systems were not included. Although tertiary and quaternary care systems represent a small portion of the healthcare system, future research should address the supply chain costs of highly specialized organizations.

This study suggests methods that can help to improve supply chain operations in healthcare organizations worldwide.

This study presents an empirically proven methodology for testing the statistical significance of the primary factors contributing to healthcare supply chain costs. The results of this study may lead to positive policy changes to improve healthcare organizations' efficiency and increase access to high-quality healthcare.

Increasing scarcity of natural resources and the adverse effects of unsustainable practices call for more and more efficient management strategies in the energy industry. The quality of the coke plays a significant role in the quality and durability of the output steel which is produced using the energy from the coal. This paper aims to investigate the dynamic coal blending problem under overall cost and coke quality constraints in the steel industry within a periodic cycle of operations.

Considering the variability of the natural properties over a periodic cycle, this study proposes a multi-period mixed-integer non-linear programming formulation to optimize the total blending costs while taking various coke quality constraints into account. Besides, this study applies factorial design to investigate about the significant effect of coal proportions as well as improvement into the overall cost of blending.

In this case study, utilizing real data from a coal blending facility in India, through a factorial design, the authors obtain optimal desirable levels of coal proportions and their criticality levels towards the total cost of blending (TCB) or objective function. This analysis reflects the role of the coke quality constraints in the objective function value while characterizing the price of sustainability for the case study among other critical insights.

Objective function (or TCB) includes basic coal cost, movement cost and environmental costs during the coal and coke processing at a coke-oven and blast furnace of steel industry. The price of sustainability provides managerial insights on that sacrifices the industry has to make in order to become more “sustainable”.

Construction industry faces challenges in making objective decisions due to monetary value attached to quality. Among various quality management techniques available, cost of quality (COQ) is one such method used to address the concern. However, the absence of measurable COQ factors to monitor quality costs hampers the implementation of COQ framework in the construction industry. Therefore, this study aims to identify COQ factors focused on visible factors (VF) and hidden factors (HF) and the current requirements to achieve it.

This study is based on Preferred Reporting Items for Systematic Review and Meta-Analyses protocol guidelines. The present study identified 57 articles published between 1992 and 2023 in peer-reviewed journals.

The findings reveal 22 factors, which are grouped into four categories based on COQ. Through systematic review, the authors observed limited methodological and theoretical diversity. In fact, there are no quantitative frameworks to calculate COQ. The study, therefore, developed a framework comprising four major routes/paths of COQ factors within the framework.

The COQ routes developed through this study will enable the practitioners to meticulously categorise VF and HF, facilitating quantifying of quality throughout the lifecycle of project, which is currently absent from the existing quality assurance/quality control (QA/QC) approach. In addition, these COQ routes stand as essential construction strategies, significantly enhancing outcomes related to time, cost, quality, sustainability and fostering closer relationships within project frameworks.

The current study contributes significantly to the existing body of knowledge by developing various COQ routes and proposing future research directions to address gaps in the literature.

Prefabricated construction (PC) can benefit construction industry due to its high efficiency, energy saving, consumption reduction and safety. However, the high capital cost is a critical challenge hindering its development in China. The collaboration of PC stakeholders is conducive to improving cost management efficiency and optimizing resource allocation which has been ignored in previous studies. Therefore, this study aims to explore the collaboration paths of stakeholders in the process of solving critical cost influencing factors (CIFs) of PC to reduce costs.

Firstly, 25 CIFs and five main stakeholders that affect PC capital cost were identified through literature research and expert interviews. Then, questionnaires were used to investigate the relationship between stakeholders and CIFs from the perspectives of three stakeholder attributes of proximity, attitude and power, respectively. Finally, based on the survey data, three stakeholder-CIF networks from three attributes perspective and a comprehensive network were constructed and used for subsequent social network analysis.

(1) Stakeholders mainly show willingness and potential to collaborate on organization and management factors; (2) More stakeholders pay attention to incentive policies and the setting of prefabrication rates and assembly rates, while all stakeholders have the right to facilitate information and resource sharing in the PC supply chain; (3) The comprehensive network shows a core-periphery structure. As core stakeholders, contractor, designer and manufacturer are more likely to actively manage the 14 core CIFs.

This paper innovatively combined stakeholder and cost management in PC, and used two-mode network based on three stakeholder perspectives to reveal the collaboration potential and motivation of stakeholders in PC cost management. The findings not only provide guidance for stakeholders to find potential partners and optimize resource allocation in solving specific cost issues, but also facilitate stakeholders' sustainable collaboration to achieve PC's cost performance.

Recent earthquake-induced liquefaction events and associated losses have increased researchers’ interest into liquefaction risk reduction interventions. To the best of the authors’ knowledge, there was no scholarly literature related to an economic appraisal of these risk reduction interventions. The purpose of this paper is to investigate the issues in applying cost–benefit analysis (CBA) principles to the evaluation of technical mitigations to reduce earthquake-induced liquefaction risk.

CBA has been substantially used for risk mitigation option appraisal for a number of hazard threats. Previous literature in the form of systematic reviews, individual research and case studies, together with liquefaction risk and loss modelling literature, was used to develop a theoretical model of CBA for earthquake-induced liquefaction mitigation interventions. The model was tested using a scenario in a two-day workshop.

Because liquefaction risk reduction techniques are relatively new, there is limited damage modelling and cost data available for use within CBAs. As such end users need to make significant assumptions when linking the results of technical investigations of damage to built-asset performance and probabilistic loss modelling resulting in many potential interventions being not cost-effective for low-impact disasters. This study questions whether a probabilistic approach should really be applied to localised rapid onset events like liquefaction, arguing that a deterministic approach for localised knowledge and context would be a better base for the cost-effectiveness mitigation interventions.

This paper makes an original contribution to literature through a critical review of CBA approaches applied to disaster mitigation interventions. Further, this paper identifies challenges and limitations of applying probabilistic based CBA models to localised rapid onset disaster events where human losses are minimal and historic data is sparse; challenging researchers to develop new deterministic based approaches that use localised knowledge and context to evaluate the cost-effectiveness of mitigation interventions.