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The purpose of this paper is to present the use of activity-based costing (ABC) approach as an alternative option to the traditional cost accounting system. The contribution of this study is to demonstrate, through a simple example, the application of that costing system in a service (maintenance) industry, i.e. the paper intended to develop a procedure for a cost model that help in calculating any maintenance job cost, to a reasonable degree of accuracy, based on the actual activities performed.

This research uses a simple example whereby hypothetical activities and cost data of maintaining an injector and a pump, of an internal combustion engine, are used, presented and analyzed based on the use of the developed procedure.

ABC system provides more accurate cost estimates rather than the traditional “order costing” methods that uses unit-level costs which are variable in relation to change in service volume. Traditional cost methods distort the costs by applying overhead uniformly over different jobs of varied complexities and activities scope. On the other hand, ABC is a useful means to distribute the overhead costs in proportion (fairly) to the actual activities performed in a specific job and, hence, enhance the rationality of decision making, i.e. will not distort the accounting information used for cost reduction, pricing, and evaluation matters. The results obtained from the analysis showed that allocating costs to the maintained injector decreased from $83.55 to $71.95 and, finally, to $67.57 when using the workshop-wide, two-stage and ABC overhead allocation methods, respectively; while that of the pump increased from $298.90 to $340.34 and, finally, to $359.48 when using the same three methods, in the same order, respectively. The result is quite fair when considering the complexity of the fuel pump, in terms of design and maintenance, when compared with the injector. Notice that using volume to allocate overhead costs results in over costing high-volume products, e.g. injectors (simple in terms of design and operation) and under costing low-volume products, e.g. pumps (more complex in terms of design and operation). The paper recommends to use ABC as a more accurate and fair method when charging maintenance job orders based on the analysis of costing two maintained items in the same premise while consuming different overhead resources.

This study attempts to analyze different methods to calculate a specific corrective maintenance job order. It strives to remedy the drawbacks of the traditional overhead costing of a job order when using principles related to the size of service, such as the direct labor cost/hours, as an allocation base. Consequently, the study proposed a new costing method, i.e. application of ABC. The traditional costing approach is considered by many firms as the best costing method. Nevertheless, it allocates overhead cost over job performed uniformly (equally) not differentiating between the complexity of the job and variety of the activities performed, e.g. using the same allocation base for “oil change” and “fuel pump adjustment” activities. So, ABC prevents cost distortions (unfairness) that could not be prevented by traditional cost accounting system. The author believes that the method presented in this paper will provide a useful management tool for costing maintenance jobs based on the appropriate selected activity drivers in maintenance workshops. The method could be applied for costing maintenance activities in maintenance of all industrial sectors.

The use of traditional costing method has proven to be distorted by applying overhead uniformly over different jobs of varied complexities and activities scope. In this paper the authors strive to present an effective costing alternative that outperforms the traditional ones with regard to overhead allocation. The paper aims to find reliable and fair maintenance costing method, i.e. to find out the relationships between maintenance activities and cost drivers. Although, ABC is widely used in manufacturing industry, no application or current research has presented an applicable thorough worked-out example, with the exception, to the author’s knowledge, of one in the aeronautical industry, to implement ABC method in maintenance industry. The importance of using this method comes from the fact that it provides, relatively, accurate and fair maintenance bills that provide customer satisfaction and firm good image. Hence, the paper is relevant in this respect and intended to contribute to the practice of maintenance management.

THE article that appears in this issue entitled ‘Machine Design and the Work Study Analyst’ illustrates that the techniques of work study can be equally well applied in fields outside of production.

Reinforced Polythene Sheet. The protective qualities of polythene, deriving from its extreme chemical inertness, have long been recognised and utilised. The extrusion coating technique is employed for the manufacture of several important packaging materials, in which polythene is applied to paper, light boards, aluminium foil and cellulose film. Developments in this technique have made it possible for polythene to bring its valuable properties to bear on a different set of problems, involving among other things, containers on a larger scale than usually implied by the term ‘packaging.’ The new development is thin polythene sheet reinforced internally with an open mesh of fibreglass, Terylene or other suitable synthetic or natural textile. This material, patented and bearing the name Telcomesh, is claimed to possess the impermeability and chemical resistance of polythene plus greatly increased mechanical strength, and a fair degree of translucency.

New Waterproof Tape. The manufacturers of Permacel pressure‐sensitive tapes have succeeded in combining strong cotton cloth with a revolutionary water‐proof backing material. This has enabled them to produce a complete new waterproof cloth tape.

The food and beverage industry, particularly the agro‐processing and packaging industry, plays a critical role in the economies of Latin America and Caribbean countries. To remain competitive and to increase competitiveness, companies operating in this industry must achieve operational efficiency – where one contributing factor would be the efficient management of their work‐in‐progress (WIP) inventories.

Constructs from related manufacturing management research areas such as manufacturing strategy and coordination theory, are incorporated into a conceptual framework to examine the reasons WIP are needed in food plants. The framework is used to inform the development of an audit tool, which is applied in a case study.

An audit tool is proposed, which can be used by practitioners to review the structural and infrastructural decisions that impact WIP.

The audit tool is applied in one case study. Further application of the tool will test its overall comprehensiveness.

The audit tool can be used as part of a structured decision making process.

The paper brings together a number of constructs to create an audit tool that can be used in both greenfield and existing plants in the food industry.

The ISO 14001 environmental management system (EMS) standard has been designed to help organizations in the creation of structured mechanisms for continuous improvement in environmental performance. This paper evaluates how ISO 14001 EMS and EMS‐like standards aid organizations in operating continuous source reduction programs by exploring some critical elements for program success. The ISO 14001 standard helps organizations define important EMS elements for continuous source reduction. However, adopting these elements may necessitate cultural changes, the core elements of which are embodied by TQM principles. The cultural changes support complex operational activities aimed at source reduction. Three case study firms are used to evaluate these critical EMS elements. Each firm showed substantially idiosyncratic situations attributable to each organization’s size, history, corporate culture, and technology. Despite the differences, however, the cases highlighted one critical point: employee empowerment, their willingness to make suggestions for improvement, and management’s effort to create employee participation in decision making are critical elements in managing continuous source reduction programs. These initial empirical observations provide some insight into how this cultural change may occur.

A new high‐gloss HDPE resin is for continuous extrusion blow moulding of personal care, pharmaceutical, and food bottles. The 1.4‐melt‐index, 0.952‐density material is said to offer a good balance of room‐ and low‐temperature impact strength and stiffness. With a 75°C melting point, the product's superior melt strength ensures absence of melt fracture, supplier says.