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Prior work has focused on the impact of using alternative bases for allocating costs to products but there has been little work that evaluates the use of alternative allocation bases for allocating costs to departments. In particular, if different departments of a multi‐national firm are located in settings with different reporting requirements, exchange rate risks, and costs of capital, then the choice of cost allocation base can be important. This paper examines the economic impact of alternative service department allocation bases in a decentralised setting. A non‐linear programming (NLP) approach is used to model the problem. A review of prior literature identifies a method, based on the NLP approach, for determining the economic impact of alternative allocation bases in a multi‐product setting. The method is adapted in this paper for the multi‐divisional context. The study finds that centralised production volume decision‐making is superior to decentralised decision‐making using either revenue or volume‐based cost allocation bases. Under certain conditions, revenue‐based allocation bases are also found to be superior to volume bases. Under the assumptions of the model no distinction can be made between the centralised solution and a profit‐based allocation regime. A practical implication of this study is that designers of cost allocation systems need to consider not only the direct income‐shifting effect of different cost allocation bases but also the indirect economic effect of consequential changes in the operating decisions of the firm.

This special “Anbar Abstracts” issue of the Journal of Management in Medicine is split into six sections covering abstracts under the following headings: General Management; Personnel and Training; Quality in Health Care; Health Care Marketing; Financial Management; Information Technology.

Although cost savings are found by many researchers to be a major reason for sourcing from China, the actual cost savings may not be as great as expected. This paper aims at studying and comparing the true cost of sourcing from China and companies' perceptions of the total cost of their China sourcing projects.

This research comprises six case studies and a mailed survey to 201 UK manufacturers with the experience of global sourcing from China. Comparisons of the findings from the cases and the survey are made.

The findings provide a comprehensive analysis of the total costs of outsourcing from China. Additional costs (additional to the quoted price), found from in‐depth case studies, averaged 50 per cent of the quoted price. The perception of additional costs, found from a survey, averaged 25 per cent of the quoted price. Taken together, these findings suggest that companies generally do not comprehensively measure the costs of global sourcing, and significantly underestimate the true costs incurred.

This has implications for decision making and ultimately profitability, and the paper suggests that more attention is paid to measuring the actual total acquisition costs. It confirms the benefit of a comprehensive cost framework, as a checklist that will prompt companies to think about all the possible sources of cost when sourcing globally. This should both guide their decision making, and also act to identify possible cost reduction activities.

This research is the first effort to establish the total cost of sourcing from China and to compare this with companies' perceptions of the cost of such sourcing. It is valuable in providing increased understanding of the sources and magnitudes of the costs of sourcing from China.

This paper focuses on the implications for management accounting of “connectivity” amongst modern enterprises. It seeks to illustrate how practical guidance for management accountants who work in business networks can be gleaned from analogies out of traditional management accounting.

The paper explores four avenues that demonstrate linkages between accounting formats in centrally coordinated systems and network accounting, namely: cost budgets and cost design; collaborative planning, forecasting and replenishment; multi‐stage performance‐monitoring; and accounting for transaction costs.

Highly interconnected business transforms management accounting into an activity that requires concepts to coordinate (partially) independent management systems. The concepts of distributed decision‐making and trust building through reliable reporting nicely fit this environment. Even though such concepts are widely accepted, as are the notions of transaction cost and collaborative performance monitoring, practical guidance on this is not abundantly at hand in academia or in professional outlets. The study shows how a “tool kit” might be developed to provide methods for decision support, and management control, for each stage of a business network's development.

It would be desirable that this exposition be supplemented by research concerning the common experiences and practices of accountants who operate in business networks.

The exposition applied in this paper could enable a new type of access to the issues of inter‐organisational management.

Implementing building information modeling (BIM) in construction projects offers many benefits. However, the use of BIM in project cost management is still limited. This study aims to review the current trends in the application of BIM in project cost management.

This study systematically reviews the literature on the application of BIM in project cost management. A total of 46 related articles were identified and analyzed using the Preferred Reporting Items for Systematic Reviews and Meta-Analyses method.

Eighteen approaches to applying BIM in project cost management were identified. The approaches can be grouped into cost control and cost estimation. Also, BIM can be applied independently or integrated with other techniques. The integrated approaches for cost control include integration with genetic algorithms, Monte Carlo simulation, lean construction, integrated project delivery, neural network and value engineering. On the contrary, integrated approaches for cost estimation include integration with cost-plus pricing, discrepancy analysis, construction progress curves, estimation standards, algorithms, declarative mappings, life cycle sustainability assessment, ontology, Web-based frameworks and structured query language.

To the best of the authors’ knowledge, this study is the first to systematically review prior literature on the application of BIM in project cost management. As a result, the study provides a comprehensive understanding of the current state of the art and fills the literature gap. Researchers and industry professionals can use the study findings to increase the benefits of implementing BIM in construction projects.

The traditional view of quality treats it as an economic good which can be developed by incurring costs. Proponents of total quality management have rejected the traditional view and stress the complementary nature of cost and quality. Reconciles these two views as different manifestations of the same underlying phenomenon within the same strategic framework. This requires precise definitions of quality concepts such as conformance and performance quality. The organization first examines its current position within this framework. The definitions of quality help sharpen the formulation of strategic objectives and the framework helps in mapping out a policy for moving the firm from the current position to the desired position. In addition, also determines the operating systems of quality management by how quality is defined in the organization. In conjunction with the strategic direction, the operational management procedures facilitate the process of cost management.

An important management topic across a wide spectrum of firms is reconfiguring the value delivery system – defining the boundaries of the firm. Profit impact should be the way any value chain configuration is evaluated. The managerial accounting literature refers to this topic as “make versus buy” and typically addresses financial impact without much attention to strategic issues. The strategic management literature refers to the topic as “level of vertical integration” and typically sees financial impact in broad “transaction cost economics” terms. Neither approach treats fully the linkages all along the causal chain from strategic actions to resulting profit impact. In this paper we propose a theoretical approach to explicitly link supply chain reconfiguration actions to their profit implications. We use the introduction by Levi Strauss of Personal Pair™ jeans to illustrate the theory, evaluating the management choices by comparing profitability for one pair of jeans sold through three alternative value delivery systems. Our intent is to propose a theoretical extension to the make/buy literature which bridges the strategic management literature and the cost management literature, using A-P-L and SCM, and to illustrate one application of the theory.

This study aims to develop a success factor model to understand and facilitate improved cost management system (CMS) implementation in low-cost housing (LcH) project delivery in Nigeria.

Literature findings highlight 13 drivers affecting effective implementation within the CMS and uses series of brainstorming sessions and questionnaire surveys to validate the drivers. Factor analysis (FA) identifies possible contextual relationships among the validated drivers and groups them into three success factors. The results of the FA are refined using interpretive structural modelling (ISM). The ISM identifies and models the influential drivers and aids the development of the success factor model.

Effective team qualities, information and management actions and a stable operational environment are the three essential success factors for effective CMS implementation.

The paper highlights effective team qualities as the most important CMS considerations for Nigerian LcH project delivery. This finding creates the needed awareness to guide project sponsors and project managers in the appropriate selection of the project management team (PMT) as well as the procurement system that facilitates their collaboration.

This study is a novel research using FA and ISM to investigate the influence of success factors needful for effective implementation within the CMS. It further develops a hierarchy model that aids the PMT with better understanding of the drivers and factors interrelationships for use on LcH projects within the Nigerian context.

The purpose of this paper is to propose a model for analysing the influence of costs of quality.

A model is designed by using a causal loop diagram and is analysed through a system dynamics approach. The model simulation is prepared by Vensim software.

Prevention and appraisal costs are the two effective cost factors. The model represented in this paper reveals that prevention costs have the most effect on total cost of quality and especially external failure costs. Hence, in order to achieve the customer expected quality level, prevention and appraisal costs should be considered.

Calculating and measuring non‐conformance costs is very difficult in organizations and some errors and mistakes may happen.

A system dynamics approach can analyse and measure the amount of prevention cost effects on cost of quality in different organizations.

The proposed methodology demonstrates the use of an innovative approach in developing a cost of quality concept and constructing a practical framework for system dynamics in a real case.