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Case study
Publication date: 20 January 2017

Timothy M. Laseter and James Hammer

This disguised case examines the issue of outsourcing to a low-cost country based on a thorough analysis of competitive cost drivers. The case demonstrates that labor cost is only…

Abstract

This disguised case examines the issue of outsourcing to a low-cost country based on a thorough analysis of competitive cost drivers. The case demonstrates that labor cost is only one potential advantage and that transportation cost and other factors could more than offset labor savings in some product lines.

Details

Darden Business Publishing Cases, vol. no.
Type: Case Study
ISSN: 2474-7890
Published by: University of Virginia Darden School Foundation

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Abstract

Details

Servitization Strategy and Managerial Control
Type: Book
ISBN: 978-1-78714-845-1

Article
Publication date: 1 October 2005

E. Uliana, J. Macey and P. Grant

It is commonly acknowledged that “what gets measured gets done”. There is some debate on how to include human capital on the balance sheet, but it is arguably more important that…

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Abstract

It is commonly acknowledged that “what gets measured gets done”. There is some debate on how to include human capital on the balance sheet, but it is arguably more important that investors become aware of how human capital contributes to the success of a business. This is an exploratory study into the reporting of human capital. Annual reports from 20 companies in three different industries were examined for two years to document the human capital reporting that is done. The data were categorised into functional areas, and linkages were constructed with strategic frameworks as well as with operational results. The results showed little evidence that managements report on human capital in a manner suggesting it is an area of strategic importance. A review of the lessons learned from this exploration provides strong guidance for future research.

Details

Meditari Accountancy Research, vol. 13 no. 2
Type: Research Article
ISSN: 1022-2529

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Case study
Publication date: 20 January 2017

Timothy M. Laseter

This case introduces a framework for cost modeling. Two data sets (one for injection-molded plastic parts and another for compressors) allow students to apply the cost-driver

Abstract

This case introduces a framework for cost modeling. Two data sets (one for injection-molded plastic parts and another for compressors) allow students to apply the cost-driver framework in conjunction with basic spreadsheet and regression analyses. Although obviously applicable in a course on supply chain management, the case can also be used to teach competitive cost analysis for strategic decision making.

Details

Darden Business Publishing Cases, vol. no.
Type: Case Study
ISSN: 2474-7890
Published by: University of Virginia Darden School Foundation

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Article
Publication date: 12 December 2022

Mohit Goswami, M. Ramkumar and Yash Daultani

This research aims to aid product development managers to estimate the expected cost associated with the development of cost-intensive physical prototypes considering transitions…

Abstract

Purpose

This research aims to aid product development managers to estimate the expected cost associated with the development of cost-intensive physical prototypes considering transitions associated with pertinent states of quality of the prototype and corresponding decision policies under the Markovian setting.

Design/methodology/approach

The authors evolve two types of optimization-based mathematical models under both deterministic and randomized policies. Under the deterministic policy, the product development managers take certain decisions such as “Do nothing,” “Overhaul,” or “Replace” corresponding to different quality states of prototype such as “Good as new,” “Functional with minor deterioration,” “Functional with major deterioration” and “Non-functional.” Under the randomized policy, the product development managers ascertain the probability distribution associated with these decisions corresponding to various states of quality. In both types of mathematical models, i.e. related to deterministic and randomized settings, minimization of the expected cost of the prototype remains the objective function.

Findings

Employing an illustrative case of the operator cabin from the construction equipment domain, the authors ascertain that randomized policy provides us with better decision interventions such that the expected cost of the prototype remains lower than that associated with the deterministic policy. The authors also ascertain the steady-state probabilities associated with a prototype remaining in a particular quality state. These findings have implications for product development budget, time to market, product quality, etc.

Originality/value

The authors’ work contributes toward the development of optimization-driven mathematical models that can encapsulate the nuances related to the uncertainty of transition of quality states of a prototype, decision policies at each quality state of the prototype while considering such facets for all constituent subsystems of the prototype. As opposed to a typical prescriptive study, their study captures the inherent uncertainties associated with states of quality in the context of prototype testing, etc.

Details

International Journal of Quality & Reliability Management, vol. 40 no. 7
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 21 November 2016

Riccardo Giannetti, Laura Risso and Lino Cinquini

The aim of this paper is to explore the managing of cost drivers using a business model (BM) design. Particularly, the paper explores the link between a BM and cost driver

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Abstract

Purpose

The aim of this paper is to explore the managing of cost drivers using a business model (BM) design. Particularly, the paper explores the link between a BM and cost driver analysis adopting a service-dominant logic (SDL) perspective. The empirical domain addresses the dynamic and complex scenarios of electric cars, where many actors are involved, several marketing and technological aspects are still unclear and where the high cost of batteries delays the wide diffusion of electric vehicles. The paper explores how SDL could support the BM design and how the cost driver analysis and BM design are linked when the SDL perspective is adopted.

Design/methodology/approach

This paper analyses secondary data and findings collected by interviews performed with managers belonging to the automotive sector.

Findings

The results show that the BM design could be a solution to address cost problems and the cost driver analysis may play a role in formulating an economically sustainable BM. Splitting a product into a “package of services” can provide direction for research of an alternative BM design in an attempt to manage the impact of cost drivers and pursue economic sustainability.

Originality/value

This paper explores a topic that has not yet focused on cost management research, i.e. the link between BM and cost driver analysis adopting an SDL perspective.

Details

Measuring Business Excellence, vol. 20 no. 4
Type: Research Article
ISSN: 1368-3047

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Article
Publication date: 1 April 1999

A. Gunasekaran

The objective of a cost management system is to provide accurate and useful information to help companies in utilizing their valuable resources for producing quality goods and…

11192

Abstract

The objective of a cost management system is to provide accurate and useful information to help companies in utilizing their valuable resources for producing quality goods and services in a competitive environment. Activity‐based costing (ABC) has been found more appropriate for capital intensive manufacturing environments. However, there is no systemic framework for design and implementation of ABC. Realizing the importance of ABC, an attempt has been made in this paper to develop a framework for the design of an ABC system. It is based on the review of literature on the design and implementation of ABC. In ABC, the activities required to manufacture a product should be identified and then quantified by their consumption of resources. The cost of each activity that is required to produce the product/parts will be calculated in such a way that the factors causing or driving the cost (cost drivers) of the activity in question can be determined. The cost driver rate will be used to allocate the cost of activities to a product/part according to the volume of the cost driver. In addition, the advantages and limitations of ABC are also discussed.

Details

Managerial Auditing Journal, vol. 14 no. 3
Type: Research Article
ISSN: 0268-6902

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Article
Publication date: 9 July 2020

Vipin Prakash Singh and Kunal Ganguly

This research aims to develop a new generic framework for estimating different maintenance costs (preventive, corrective and conditional based) and its distribution to original…

369

Abstract

Purpose

This research aims to develop a new generic framework for estimating different maintenance costs (preventive, corrective and conditional based) and its distribution to original equipment manufacturer (OEM), customer and supply chain due to no fault found (NFF) events. The study extend the domain of NFF to military aircraft maintenance, repair and overhaul (MRO) by including broader range of cost drivers than are normally found in maintenance NFF literature.

Design/methodology/approach

The research applies the soft system methodology involving 80 field surveys and five in depth semi-structured interviews with practicing experts having background in military aircraft NFF MRO. For impact analysis, authors have used an agent-based model to represent and prioritize the critical NFF cost drivers during aircraft MRO based on the cost inputs of 21 technology transfer cases.

Findings

The paper provides imperial insights about how NFF cost drivers affect the OEM, customer and supply chain. It suggests that NFF cost need to be part of the commercial MRO contract, depending on its frequency pattern in different types of maintenances.

Research limitations/implications

The context of the current research is military aircrafts industry and may lack generalizability to commercial aircrafts. Therefore, researchers are encouraged to test the proposed propositions further.

Practical implications

The developed framework will provide invaluable help in key financial decision-making during signing of MRO contract in technology transfer cases.

Originality/value

This paper proposed a new prediction model for NFF cost estimation across its shareholders and current status of NFF in military aircraft NFF MRO in India.

Details

Journal of Quality in Maintenance Engineering, vol. 27 no. 4
Type: Research Article
ISSN: 1355-2511

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Article
Publication date: 1 July 2006

Riccardo Silvi and Suresh Cuganesan

The purpose of this paper is to develop and apply a framework that examines the effectiveness and efficiency of managing knowledge in organizations for competitive advantage.

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Abstract

Purpose

The purpose of this paper is to develop and apply a framework that examines the effectiveness and efficiency of managing knowledge in organizations for competitive advantage.

Design/methodology/approach

Reviews knowledge management and strategic cost management literatures to identify key elements that determine and facilitate the enhancement of competitive advantage. Develops a cost‐knowledge management (CKM) framework that integrates these elements and enables the analysis of how knowledge utilization in organizational activities can be made more effective and efficient.

Findings

The CKM framework is usefully applied to a sample of four Italian firms operating in the mechanical industry. Both the results of applying the CKM framework and the insights that are generated are discussed.

Practical implications

The CKM framework allows organizations to analyze the activities performed in terms of cost structure and cost drivers, value created, and knowledge utilized, the latter in terms of knowledge specificity and type. The framework can also be used to highlight specific areas of effectiveness improvements in terms of identifying which activities should be leveraged and how knowledge can be better mobilized. In addition, the framework enables an assessment of the non value added but required and waste elements of organizational activities and the specific drivers of costs in these activities, thereby enabling an identification of efficiency improvement opportunities.

Originality/value

This paper integrates strategic cost management and knowledge management perspectives to examine how organizations can usefully analyze and improve the effectiveness and efficiency of managing knowledge for competitive advantage. Thus far, this integration has not occurred in either literatures.

Details

Journal of Intellectual Capital, vol. 7 no. 3
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 4 February 2014

Adrian Payne and Pennie Frow

Research into the identification and development of value propositions has recently been identified as a key research priority by the Marketing Science Institute. The purpose of…

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Abstract

Purpose

Research into the identification and development of value propositions has recently been identified as a key research priority by the Marketing Science Institute. The purpose of this article is to identify and develop a process for value proposition deconstruction that can help organizations transform their value propositions in order to gain an improvement in their competitive position.

Design/methodology/approach

A case study of an exemplar organization in the health care sector is used to develop an approach for value proposition deconstruction. Using the business system concept as a theoretical framework, the key value-adding elements that comprise this organization's value proposition are identified. A leading financial services firm is used to demonstrate how this learning approach can be successfully applied in developing a new and innovative value proposition.

Findings

Using the business system framework, a structured process for deconstructing value propositions is developed. This framework is extended to explicitly acknowledge the value-in-use that results from different encounters, to incorporate learning processes and to recognize its interactive and recursive nature.

Practical implications

The authors provide practitioners with insight into how to formulate new or improved value propositions.

Originality/value

This work addresses two important and previously unaddressed research questions: how can the process of deconstruction of an exemplar organization's value proposition provide a more comprehensive understanding of the elements that comprise a superior value offering; and how can this process be applied to other organizations seeking to improve their value proposition?

Details

European Journal of Marketing, vol. 48 no. 1/2
Type: Research Article
ISSN: 0309-0566

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