الفهرس يوجد فقط 14 صفحة متاحة للعرض العام
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المستخلص
Research problem
The fundamental economic challenges have had a significant impact in increasing competition among organizations in the market. Those challenges have prompted the majority of the organizations to enhance their competitiveness in the market, through a focus on improving the value of the Organization in the market and increase the degree of customer satisfaction, and this requires that the organizations should abandon the policies and strategies that they follow, so that they can exploit the opportunities offered by the market, and strengthen the weaknesses that are tainted, where the main focus of the organization, became a trial to gain competitive advantage in the short and long term, which can achieve customer satisfaction, and maximize the current and future profitability of the organization.
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Based on this, Organizations´ management aim to develop its productive performance, and efficient economic use of available resources to allow for cost reduction, without compromising the quality and characteristics of the product. The organizations realized that the only way is to achieve continuous development considerations, which covers the factors of time, quality and cost, and specially concentrating on customers ( market based direction ), getting rid of waste and overuse of resources, reducing cycle time, improving quality, offering new products, focus on automatic system, effective performance control and finally adequate plan and design. and as a result of this request there is a need to reconsider the applied costs system, especially in light of its inability to provide information that will ensure the achievement of organizational objectives in an environment of modern manufacturing. As a result of the foregoing, The concept of strategic cost management, emerged which addresses the shortcomings of the current system, as well as providing information that ensure the achievement considerations of the organization of the continuing development. The matter is not limited to replace one tool with another, as far as the transition from limited internal view to external and more effective view in achieving the objectives. This external view, which has become the only way, and which the available elements made it effectively in supporting the department’s ability to achieve continuous development And, consequently, to achieve strategies and strategic objectives, which require a significant change in the nature and content of the output of cost information. Those objectives were achieved through a set of modern approaches, which benefit each other in the long term, such as activity-based system, and some benefit in the short term such as theory of constraints.
Concerning the activity based costing approach we can say that there is a trial to treat the drawbacks of traditional system specially in cost measurement of cost object (product, process, activity). Under the traditional system, there is only one cost driver used in cost allocation and usually the direct labor hours. The use of only one allocation rate does not reflect the actual use of available resources for different activities and specially under automation system. Activity based costing approach focuses on analysis organization activity to know the performed work structure. And also the analysis of organization cost frame through dividing organization into a set of cost center (Activity). Activity based costing allocated cost through two stages. In stage the first cost of resources is allocated to activity and in the second cost of activity is allocated to activity costing the light of the benefit of each product from this activity and also by focus on appropriate cost driver for each activity. This technique reflects the causal relation between cost of products and benefit received from activity resources.
Based on the above, Activity based costing contributes to provide information that help in analysis and management of activities in long run. through concentrating on the appropriate measure of product cost. Product cost is viewed as the cost of direct raw material and product share in cost of different activities.
On The other hand, The founder of theory of constraints approach is Goldratt. This approach appeared as a results of a set of motives, the most important is the negative effect of bottleneck on time measures, large inventory size, with its different types in addition to drawbacks of just in time system. This approach is based on philosophy that any system consists of a set of interrelated processes and each one focuses on the other. Also ,there are some resources that represent constraints on firm overall profitability of the organization in specific time.
The first stage is to focus on schedules methods 1980 to reduce work under inventory process and therefore it can solve the problem of bottleneck in production. In 1985 the theory converted to deal with management of constraints resources, this focus on through put accounting. Through put accounting is based on asset of measure throughput contribution, inventory and operating costs. throughput accounting aims to increase throughput contribution, from constraint resources, reduce inventory, and operating cost.
Based on the above, theory of constraints approach has two sides. The first side is productive (schedule) and the second side is accounting (throughput accounting). This approach contributes to provide information that support the bottleneck and constraints management that limit throughput in short run. Product cost is viewed as the cost of direct raw material only.
from this point, research problem is making integration between one of the approaches which are useful in the long term, Activity-based costing, and one of the approaches that are effective in the short term, theory of constraints, so as to ensure achievement of continuing improvement considerations in the short and long run, and thus enhancement the competitiveness and sustainability of the organization.
Research objective
The research aims to try to access the scientific systematic framework, it helps in rooting integration between the approaches of Activity–Based costing and theory of constraints, and then testing the effectiveness and efficiency of this framework to achieve continuous development of the organization and the impact of this on the Profitability planning in short and long run.
Research Importance
The significance of this research stems from the dual role of the proposed framework in terms of rooting areas of consensus between the two tools, and matching between them. On the other hand, minimizing the differences between them, which makes the end of the research recommendation at the same time, and underlines the fact of integration that can help in achievement of continuous improvement considerations in short and long run.
Research Hypotheses
the research is based on primary hypothesis which is the existence of significant difference of profitability planning that is based on current cost system and profitability planning that depends on proposed mathematical model for integrating Activity based costing and theory of constraints that achieved continuous improvement considerations of the organization.
Research plan
To achieve the objective of the research, the research is divided to
Chapter I: Activity – based costing Approach.
Chapter II: Theory of constraints Approach.
Chapter III: The scientific structure of proposed integrating between Activity based costing and Theory of constraints.
Chapter IV: The proposed model for integrating and its impact on achieving continuous improvement considerations of the organization.
Chapter V: Case study.
Conclusion, results, and recommendations.
References.
Results
The most important results of the research are as the following:
1.The integration between the Activity based costing and the theory of constraints helps to achieve the considerations of the continuing improvements of the organization, As activity based costing contributes to eliminate the elements of waste and loss of inventory of indirect costs for various activities, and then re-allocation on the products according to a reasonable cost driver to the nature of each activity, and by the amount of use of each product of each activity, it also contributes to the improvement of product quality by accounting for the costs of quality activities, and aids to provide reports on the profitability of customers, including possible focus on the most profitable customers. On the other side the theory of constraints contributes to optimize profitability through knowledge and identifying bottlenecks and constraints, by a proper management, and by focusing on three areas, which are the of increasing generated profit by all internal processes, reducing investment or stock, and reducing operating expenses.
2.Integration between Activity based costing and the theory of constraints can lead to a more comprehensive framework, to accommodate the economic consequences of the decisions related to production.
3.The proposed mathematical model helps in the organization in soundly planning profit in the short and the long sound, where the model focuses on maximizing profitability in the short term by maximizing Through put contribution for constraints resources (for packaging) by using the the theory of constraints, it also focuses on maximizing profitability in the long term by rationalizing the costs by using the Activity based costing, where all costs are variable in the long term
The results showed a significant difference between the current status and the proposed model. Under current cost system, non profitable products are produced, and this is due to the method of allocation indirect costs. On the other hand, the proposed model results show existence of nonprofitable product that must be DROPped in long run ,where the results are better in the case of application of the proposed model where the maximum possible profit in the short term is 2429.752 (thousand pounds), In the long term such products are produced of Q 2, Q 3, Q 4, and Q 5 only, this is the assumption that all costs are variable in the long term, and the maximum possible profit is 4893.505 (thousand pounds).
Recommendations
In the light of the results of the theoretical and applied study of the proposed framework the researcher recommends the following:
1.The necessary of better gain from the evolution of information technology, to provide data required to make the costs of Applied Studies, for the development of systems for measuring and managing cost.
2.The importance of development of a model of integration proposed by taking into account the environmental and social factors as well as security and safety products.
3.The need to test the integration between the Activity based costing and the theory of constraints, by using some other operations research techniques such as game theory.
4.The necessary of investigation and analysis the integrated relationships between the other recent developed approaches for cost management. In addition to the support of the competitive capabilities of the organization such as the integrated relationship between theory of constraints and target costing, and also between life cycle costing. and also between Activity based costing and resources consumption accounting, and others.
5.The cost accountants should interact with the practical reality to determine further problems for the development of the stock of knowledge and to contribute in finding solutions to those problems.