Search results

The purpose of this paper is to discuss life cycle cost management and highlight the practical challenges related to collecting adequate data and practicing long‐term cost management in an uncertain environment.

The paper reports a case study conducted in the Finnish Defence Forces. As part of the case study, a life cycle cost model for a case product was developed.

Activity‐based life cycle cost modeling can provide relevant information for varying product management needs at different stages in the life of a product. Quantification of uncertainty is one of the elements in the modeling that can improve the feasibility of LCC both for cost estimation and tracking purposes.

Only a few empirical studies on life cycle costing have been reported which focus on the defence sector. The paper contributes to our understanding of how LCC can be used in a continuous manner and depicts how LCC can produce a sharpened cost image of a particular product.

The essential investments in new product development (NPD) made by industrial companies entail effective management of NPD activities. In this context, performance measurement is one of the means that can be employed in the pursuit of effectiveness.

The paper provides an overview of research published in the innovation and operations management (IOM) literature on 15 methods for cost management in new product development, and it provides a comparison to an earlier review of the management accounting (MA) literature (Wouters & Morales, 2014).

This structured literature search covers papers published in 23 journals in IOM in the period 1990–2014.

The search yielded a sample of 208 unique papers with 275 results (one paper could refer to multiple cost management methods). The top 3 methods are modular design, component commonality, and product platforms, with 115 results (42%) together. In the MA literature, these three methods accounted for 29%, but target costing was the most researched cost management method by far (26%). Simulation is the most frequently used research method in the IOM literature, whereas this was averagely used in the MA literature; qualitative studies were the most frequently used research method in the MA literature, whereas this was averagely used in the IOM literature. We found a lot of papers presenting practical approaches or decision models as a further development of a particular cost management method, which is a clear difference from the MA literature.

This review focused on the same cost management methods, and future research could also consider other cost management methods which are likely to be more important in the IOM literature compared to the MA literature. Future research could also investigate innovative cost management practices in more detail through longitudinal case studies.

This review of research on methods for cost management published outside the MA literature provides an overview for MA researchers. It highlights key differences between both literatures in their research of the same cost management methods.

The purpose of this paper is to conduct life-cycle cost analysis of a short-haul underground freight transportation (UFT) system for the Dallas Fort Worth international airport.

The research approach includes: identifying the cost components of the proposed airport UFT system; estimating life-cycle cost (LCC) of system components using various methods; determining life-cycle cash flows; evaluating the reliability of the results using sensitivity analysis; and assessing the validity of the results using analogues cases.

Although the capital cost of constructing an airport UFT system seems to be the largest cost of such innovative projects, annual costs for running the system are more significant, taking a life-cycle perspective. System administrative cost, tunnel operation and maintenance, and tunnel construction cost are the principle cost components of the UFT system representing approximately 46, 24 and 19 percent of the total LCC, respectively. The shipping cost is estimated to be $4.14 per ton-mile. Although this cost is more than the cost of transporting cargos by trucks, the implementation of UFT systems could be financially justified considering their numerous benefits.

This paper, for the first time, helps capital planners understand the LCC of an airport UFT system with no or limited past experience, and to consider such innovative solutions to address airport congestion issues.

A complete enumerative study was made of the operating and maintenance costs of the 1,255 delivery post offices throughout Japan in 2000, in order to grasp the characteristics of the whole life costs of post office buildings. The operating and maintenance cost of five standard post offices were also monitored for 20 years. This paper demonstrates how the acquired knowledge of the whole life costs is used for the decision making of the facility investment. After analysing the relationship between the rebuilding cycle, and rebuilding, repair and improvement costs, by changing the present rebuilding at age 40 to building additions at age 40 and rebuilding at age 60, it became apparent that a significant reduction in facilities investment costs could be expected.

General aviation aircraft has a wide range of applications, and effective cost management is one of the hot spots in the research of general aviation manufacturers. The purpose of this paper is to build a flexible engineering method to predict maintenance cost of general aviation aircraft.

To establish a reasonable general aviation aircraft maintenance cost prediction model, it is necessary to analyze the influencing factors and extract the main components of maintenance cost. The maintenance cost is divided by engineering method, and the estimation model of each component cost is established. Then, the general aviation aircraft maintenance cost model is obtained. The results show that the relative error of this method is between 13% and 20%, which has a good estimation accuracy and can be effectively used to estimate the maintenance cost of general aviation aircraft.

The maintenance cost plays an important role in the life cycle cost of general aviation aircraft. Accurate cost prediction method is of great significance to the optimal design of general aviation aircraft. However, there are few prediction models suitable for maintenance cost, the proposed approach is meaningful and quite desirable.

To some extent, this method overcomes the shortage of the work on maintenance cost prediction for general aviation aircraft. The model established in this paper has certain generality, which can provide some reference for general aviation aircraft design and operation enterprises.

In the light of challenges experienced in cost estimation at the bidding stage of complex engineering services in the defence industry (e.g. contracting for availability), the purpose of this paper is to present a framework to manage the influence of uncertainty on cost estimates.

The research applied the Soft Systems Methodology and benefitted from interaction with four major organisations in the defence industry through document sharing, semi-structured interviews, workshops, and case studies.

The framework is composed of seven stages to plan, identify, prioritise, classify, and manage cost uncertainties. Through the validation of three case studies some of the key benefits of the framework were realised in project planning, uncertainty visualisation, and capability management.

The research has been applied in the defence sector in the UK and focuses on the bidding stage. Further research needs to be applied to confirm that the findings are applicable across industries and across the life cycle.

The paper builds on the theory behind risk and uncertainty management and proposes an innovative framework that avoids the assumption of “perfect” knowledge by raising questions about the validity of the input data.

Although life cycle costing (LCC) is well established in theory and practice, little is known about the conditions of its adoption and its impact on the achievement of cost-management goals. Therefore, this paper aims to analyze the adoption and benefits of LCC.

The analyses are based on questionnaires collected from a survey of German firms.

The results demonstrate that the extent of LCC adoption is positively associated with the extent of guarantee and warranty costs, voluntary upfront and follow-up costs for ecological sustainability and the extent of target costing adoption. In contrast, the extent of LCC adoption is negatively associated with the amount of precursors and/or intermediates that are purchased. The results also demonstrate that firms perceive LCC to be beneficial for various aspects of cost management. Firms report that the greatest benefit of LCC is related to the identification of cost drivers.

This investigation provides a starting point for future studies of the conditions of LCC adoption and the benefits of LCC. This study is subject to limitations, particularly with respect to the operationalization of our independent variables, the number of contextual variables and the general limitations of survey research.

The results inform practitioners of the situations in which it is most appropriate to adopt LCC. In addition, this study identifies various cost-management goals that are supported by the use of LCC.

This study provides the first comprehensive analysis of the conditions of LCC adoption and advances the literature regarding the impact of LCC on the achievement of cost-management goals. Furthermore, this study provides a starting point for future research into the implementation of LCC and the effects of LCC on management accounting practices.

The purpose of this paper is to present a definition of modern configuration for a medium-altitude long-endurance unmanned aerial vehicle (MALE UAV) and its on-board systems to obtain a suitable basis for future definitions such as a possible logistic support configuration first hypothesis.

Starting from high-level requirements, both the UAV conceptual design and on-board systems preliminary design have been carried out through proprietary tools. Then, some peculiarities from previous studies, such as systems advanced UAV alternative energy, have been maintained and confirmed (diesel propulsion and energy storage system).

The improvement of a component of an aircraft can play a relevant role in the whole system. In the paper, it is considered how a concept of MALE UAV can evolve (this topic is considered by the authors since many years) by incorporating advanced on-board systems concepts.

The numerical results promote and support the use of advanced on-board system solutions and architectures to improve the effectiveness, efficiency and performance of MALE UAVs.

Usually, conceptual and preliminary design phases analyze in-depth the aerodynamic and structural solutions and aircraft performance. In this study, the authors aim to focus on the advanced on-board systems for MALE UAVs. This kind of aircraft is not yet a mature concept, with very few operating machines and many projects in the development phase.

The aim of this paper is to introduce uncertainty analysis within an environmentally extended input‐output technological model of life cycle costing. The application of this approach will be illustrated with reference to the ceramic floor tiles manufacturing process.

Input‐output analysis (IOA) provides a computational structure which is interesting for many applications within value chain analysis and business processes analysis. A technological model, which is built bottom‐upwards from the operations, warrants that production planning and corporate environmental accounting be closely related to cost accounting. Monte Carlo methods have been employed to assess how the uncertainty may affect the expected outcomes of the model.

It has been shown, when referring to a vertically‐integrated, multiproduct manufacturing process, how production and cost planning can be effectively and transparently integrated, also taking the product usage stage into account. The uncertainty of parameters has been explicitly addressed to reflect business reality, thus reducing risk while aiding management to take informed actions.

The model is subject to all the assumptions characterizing IOA. Advanced issues such as non linearity and dynamics have not been addressed. These limitations can be seen as reasonable as long as the model is mostly tailored to situations where specialized information systems and competences about complex methods may be lacking, such as in many small and medium enterprises.

Developing a formal structure which is common to environmental, or other physically‐driven, assessments and cost accounting helps to identify and to understand those drivers that are relevant to both of them, especially the effects different design solutions may have on both material flows and the associated life cycle costs.

This approach integrates physical and monetary measures, making the computational mechanisms transparent. Unlike other microeconomic IOA models, the environmental extensions have been introduced. Uncertainty has been addressed with a focus on the easiness of implementing the model.