You are here

Home » Content

Estimation of cellular manufacturing cost components using simulation and activity-based costing

Journal Name:

  • Journal of Industrial Engineering and Management

Publication Year:

  • 2010
DOI: 
doi:10.3926/jiem.2010.v3n1.p68-86

Key Words:

Author NameUniversity of Author
Abstract (2. Language): 
Abstract: It can be difficult estimating all of the cost components that are attributed to a machined part. This problem is more pronounced when a factory uses group technology manufacturing cells as opposed to a functional or process layout of a job shop. This paper describes how activity-based costing (ABC) concepts can be integrated into a discrete-event simulation model of a U-shaped manufacturing cell producing a part family with four members. The simulation model generates detailed Bills of Activity for each part type and includes specific information about the cost drivers and cost pools. The enhanced model output can be used for cost estimation and analysis, manufacturing cell design, part scheduling and other manufacturing decision processes that involve economic considerations. Although the scope of this effort is restricted to a small scale manufacturing cell, the costing concepts have general applicability to manufacturing operations at all levels.
Bookmark/Search this post with
FULL TEXT (PDF): 
PDF icon arastirmax-estimation-cellular-manufacturing-cost-components-using-simulation-and-activity-based-costing.pdf
  • 1
68-86
  • English

REFERENCES

References: 

Barth, M., Livet, A., & De Gui, R. (2008). Effective activity-based costing for manufacturing enterprises using a shop floor reference model. Journal International Journal of Production Research, 46 (3), 621 – 646. doi:10.1080/00207540600845750
Dhavale, D.G. (1992). Activity-based costing in cellular manufacturing systems. Industrial Engineering, 24, 44-46.
Dhavale, D.G. (1993). Activity-based costing in cellular manufacturing systems. Cost Management, 7, 13-27.
Emblemsvag, J. (2003). Life-cycle costing: using activity-based costing and monte carlo methods to manage future costs and risk. New York: John Wiley & Sons.
Flynn, B.B, & Jacobs, F.R. (2007) Applications and implementation: an experimental comparison of cellular (group technology) layout with process layout. Decision Sciences, 18(4), 562–580. doi:10.1111/j.1540-5915.1987.tb01547.x
Groover, M. (1987). Automation, production systems, and computer integrated manufacturing. New Jersey: Prentice-Hall.
Harrison, D.S., & Sullivan, W.G. (1996). Activity-based accounting for improved product costing. Engineering Valuation and Cost Analysis, 1, 55-64.
Helberg, C., Galletly, J.E., & Bicheno, J.R. (1994). Simulating activity-based costing. Industrial Management & Data Systems, 94(9), 3-8. doi:10.1108/02635579410072126
Hicks, D.T. (1992). Activity-based costing for small and mid-sized businesses: an implementation guide. New York: John Wiley & Sons.
Lere, J.C., & Saraph, J.V. (2006). Activity-based costing for purchasing managers' cost and pricing determinations. Journal of Supply Chain Management. 31(4), 25-31. doi:10.1111/j.1745-493X.1995.tb00212.x
MacArthur, J.B. (1992). Activity-based costing: how many drivers do you want? Cost Management, Fall 1992, 37-41.
Malik, S.A., & Sullivan, W.G. (1995). Impact of abc information on product mix and costing decisions. IEEE Transactions on Engineering Management, 42, 171-176. doi:10.1109/17.387268
Mangan, T.N. (1995). Integrating an activity-based cost system. Cost Management, Winter 1995, 5-13.
Michalska, J., & Szewieczek, D. (2007). The improvement of the quality management by the activity-based costing. Journal of Achievements in Materials and Manufacturing Engineering, 21(1), 91-94.
Özbayrak, M., Akgün, M., & Türker, A.K. (2004). Activity-based cost estimation in a push/pull advanced manufacturing system. International Journal of Production Economics, 87(1), 49-65. doi:10.1016/S0925-5273(03)00067-7
O'Loughlin, M.J., Driskell, M.K., & Diehl, G. (1990). Financial simulation: combining cost information in systems analysis. Proceedings of the 1990 Winter Simulation Conference, 578-581.
Raab, C., Shoemaker, S., & Mayer, K.J. (2007). Activity-based costing: a more accurate way to estimate the costs for a restaurant menu. International Journal of Hospitality & Tourism Administration, 8(3), 1-15. doi:10.1300/J149v08n03_01
Savory, P.A., Williams, R.E., & Rasmussen, R.R. (2001). Combining activity-based costing with the simulation of a cellular manufacturing system. Journal of Design and Manufacturing Automation, 1(3), 221-229. doi:10.1080/15320370108500204
Shields, M.D., & McEwen, M.A. (1996). Implementing activity-based costing systems successfully. Cost Management, Winter 1996, 15-22.
Spedding, T.A., & Sun, G.Q. (1999). Application of discrete event simulation to the activity based costing of manufacturing systems. International Journal of Production Economics, 58(3), 289-301. doi:10.1016/S0925-5273(98)00204-7
Williams, R.E., Savory, P.A., & Rasmussen, R.R. (1997). An integrated approach to simulation and activity-based costing for evaluating alternative manufacturing cell designs. Transactions of the XXV North American Manufacturing Research Institute of the Society of Manufacturing Engineers, 263-267.

Thank you for copying data from http://www.arastirmax.com