COST AND PRODUCTIVITY ANALYSIS OF THE MANUFACTURING INDUSTRY USING TDABC & MOST

Authors

  • Ashwin Bhimrao Ganorkar Priyadarshini Bhagwati College of Engineering
  • Ramesh R Lakhe Shreyas Quality Management System, India
  • Kamalkishor N Agrawal Shri Ramdeobaba College of Engineering and Management, India

DOI:

https://doi.org/10.7166/30-1-1939

Keywords:

Time driven activity based costing, TDABC, Maynard Operation Sequence Technique, MOST, Manufacturing

Abstract

Costing is important for manufacturing industries. Large methods of costing have evolved over time. Recently, the time-driven activity- based costing (TDABC) system has gained importance and application. This article describes the procedure that allows companies to implement TDABC using the Maynard operation sequence technique (MOST) for improving productivity and profitability. Two parameters are required for TDABC: (1) the unit cost of supplying capacity, and (2) the time required to perform a transaction or an activity. MOST is employed to estimate the time required for each activity. Based on this, time equations are formulated and the practical capacity of activities is determined. The procedure is explained with the help of a case study from a manufacturing industry. The results of the case study are discussed from the perspective of the overall company and also at the product level. This approach provides the capacity analysis and the cost analysis together with its hierarchical decomposition. This paper also discusses the different information obtained from TDABC, and its usefulness for managers and decision-makers.

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Author Biography

Ashwin Bhimrao Ganorkar, Priyadarshini Bhagwati College of Engineering

A. B. Ganorkar received his BE in Mechanical Engineering and M. Tech degree in Heat Power Engineering, all from the RTM Nagpur University, Nagpur. The case study presented in this paper is based on his PhD research work. He is a member of Institution of Engineers and ISTE. At present, he is working with Priyadarshini Bhagwati College of Engineering as an Assistant Professor.

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Published

2019-05-29

How to Cite

Ganorkar, A. B., Lakhe, R. R., & Agrawal, K. N. (2019). COST AND PRODUCTIVITY ANALYSIS OF THE MANUFACTURING INDUSTRY USING TDABC & MOST. The South African Journal of Industrial Engineering, 30(1), 196–208. https://doi.org/10.7166/30-1-1939

Issue

Vol. 30 No. 1 (2019)

Section

Case Studies

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