Evidence on the Cost Hierarchy: The Association between Resource Consumption and Production Activities

2012 ◽  
Vol 25 (1) ◽  
pp. 119-141 ◽  
Author(s):  
Shannon W. Anderson ◽  
Karen L. Sedatole
Keyword(s):  
Production Scheduling ◽  
Cost Model ◽  
Product Variety ◽  
Resource Consumption ◽  
Data Availability ◽  
Model Specification ◽  
Variable Cost ◽  
Daily Production ◽  
Data Limitations ◽  
The Cost

ABSTRACT Modern cost accounting posits that manufacturing overhead costs vary with production unit volume, batches of production, and with the variety of products produced. However, many studies fail to find an association between manufacturing overhead costs and activities associated with production batches and product variety; rather, the traditional fixed and (unit) variable cost structure is validated. One explanation is that flexible manufacturing methods and optimized production scheduling restore the relevance of the traditional cost model. Another explanation is that the relation holds, but is not detectable because of limitations of the data used in these studies. We explore the separate and joint impacts of these data limitations using data from a modern float glass manufacturing plant and a new time-driven activity-based costing model suggested by Kaplan and Anderson (2004, 2007). We find that: (1) batch and product-variety-related activities are significantly associated with resource consumption, (2) crude measures of activity promote incorrect conclusions about the strength of the relation between activities and resource consumption, and (3) monthly aggregation of data obscures important aspects of the relation between daily production activities and resource consumption. In sum, even in a highly automated setting that is biased against finding evidence of the cost hierarchy because production scheduling is optimized to minimize batch and product-variety-related resource consumption, the cost hierarchy is an apt description of the association between resource consumption and production activity. However, improved measurement and cost model specification are necessary to reveal this association. Data Availability: Data are the property of the firm and may not be redistributed by the authors.

Pricing Commuter, Intercity, and Freight Trains in a Terminal Railway Context: An Approach

2003 ◽  
Vol 1825 (1) ◽  
pp. 1-7
Author(s):  
Bryan K. Bertie
Keyword(s):  
Cost Model ◽  
Resource Consumption ◽  
Successful Implementation ◽  
Work Effort ◽  
Capital Costs ◽  
Recovery System ◽  
Link Cost ◽  
Sharing Responsibility ◽  
The Cost ◽  
Cross Subsidization

The cost-of-service (or fully allocated cost) pricing model has been criticized in the economics literature. The criticisms generally focus on the issues of cross-subsidization problems from using average costs and economically inefficient pricing. A fully allocated cost model, applied to a terminal railroad setting, is presented that can substantively overcome these criticisms by using a resource consumption approach for key cost drivers. A successful implementation of a new cost recovery system in Toronto, Ontario, Canada, is used that applies these resource consumption concepts. A necessary precondition to this approach is the charting of the classes of traffic (commuter, intercity, and freight) into operated-track segmented paths, each of which consists of a set of one or more track links. Each traffic class path is characterized as either consisting of sole-use links, joint-use links, or a combination thereof. Operating and capital costs directly attributable to the track links are calculated. A reverse engineering work-effort-per-activity approach is used for assigning the total routine maintenance of way and maintenance of signals budget dollars to the terminal track links. The resource consumption approach provides a logical framework and analytical platform for analyzing link infrastructure complexity; system, path, and link capacity; path and link cost performance; and path and link renewal and replacement capital planning and capital sharing responsibility.

scholarly journals A Formal, Resource Consumption-Preserving Translation from Actors with Cooperative Scheduling to Haskell*

2020 ◽  
Vol 177 (3-4) ◽  
pp. 203-234
Author(s):  
Elvira Albert ◽  
Nikolaos Bezirgiannis ◽  
Frank de Boer ◽  
Enrique Martin-Martin
Keyword(s):  
Cost Model ◽  
Formal Semantics ◽  
Operational Semantics ◽  
Resource Consumption ◽  
Target Language ◽  
Correctness Proof ◽  
High Level ◽  
Resource Aware ◽  
The Cost ◽  
Cooperative Scheduling

We present a formal translation of a resource-aware extension of the Abstract Behavioral Specification (ABS) language to the functional language Haskell. ABS is an actor-based language tailored to the modeling of distributed systems. It combines asynchronous method calls with a suspend and resume mode of execution of the method invocations. To cater for the resulting cooperative scheduling of the method invocations of an actor, the translation exploits for the compilation of ABS methods Haskell functions with continuations. The main result of this article is a correctness proof of the translation by means of a simulation relation between a formal semantics of the source language and a high-level operational semantics of the target language, i.e., a subset of Haskell. We further prove that the resource consumption of an ABS program extended with a cost model is preserved over this translation, as we establish an equivalence of the cost of executing the ABS program and its corresponding Haskell-translation. Concretely, the resources consumed by the original ABS program and those consumed by the Haskell program are the same, considering a cost model. Consequently, the resource bounds automatically inferred for ABS programs extended with a cost model, using resource analysis tools, are sound resource bounds also for the translated Haskell programs. Our experimental evaluation confirms the resource preservation over a set of benchmarks featuring different asymptotic costs.

scholarly journals Methods for Estimating Avoidable Costs of Excessive Alcohol Consumption

2021 ◽  
Vol 18 (9) ◽  
pp. 4964
Author(s):  
Beata Gavurova ◽  
Miriama Tarhanicova
Keyword(s):  
Czech Republic ◽  
Alcohol Consumption ◽  
Data Availability ◽  
Excessive Alcohol Consumption ◽  
Public Authorities ◽  
The Czech Republic ◽  
Cost Of Disease ◽  
Lost Productivity ◽  
Excessive Alcohol ◽  
The Cost

Background: Alcohol is a risk factor with serious consequences for society and individuals. This study aims to present methods and approaches that might be used to estimate the costs related to excessive alcohol consumption. It emphasizes the need for general methods and approaches that are easily applicable, because the level of digitalization and data availability vary across regions. The lack of data makes many methods inapplicable and useless. The ease of applicability will help to make cost-of-illness studies and their results comparable globally. Methods: This study is based on data from the Czech Republic in 2017. Drinking alcohol results in costs of healthcare, social care, law enforcement, and administrative costs of public authorities. To quantify the cost of drinking in the Czech Republic, the top-down approach, bottom-up approach, human capital approach and attributable fractions were used. Results: In 2017, the cost related to alcohol was estimated at 0.66% of the national GDP. Lost productivity represented 54.45% of total cost related to alcohol. All cost related to alcohol is considered to be avoidable. Conclusions: The methods and approaches applied to estimate the cost of disease or any other health issue should be generalized regarding the availability of data and specifics of provided services to people who are addicted or have any kind of disability.

scholarly journals Economic burden of childhood diarrhea in Burundi

2021 ◽  
Vol 6 (1) ◽  
Author(s):  
Fulgence Niyibitegeka ◽  
Arthorn Riewpaiboon ◽  
Sitaporn Youngkong ◽  
Montarat Thavorncharoensap
Keyword(s):  
Economic Burden ◽  
Cost Model ◽  
Primary Treatment ◽  
Management Program ◽  
Community Based ◽  
Factors Affecting ◽  
Hospitalization Costs ◽  
Illness Study ◽  
The Cost ◽  
Substantial Economic Burden

Abstract Background In 2016, diarrhea killed around 7 children aged under 5 years per 1000 live births in Burundi. The objective of this study was to estimate the economic burden associated with diarrhea in Burundi and to examine factors affecting the cost to provide economic evidence useful for the policymaking about clinical management of diarrhea. Methods The study was designed as a prospective cost-of-illness study using an incidence-based approach from the societal perspective. The study included patients aged under 5 years with acute non-bloody diarrhea who visited Buyenzi health center and Prince Regent Charles hospital from November to December 2019. Data were collected through interviews with patients’ caregivers and review of patients’ medical and financial records. Multiple linear regression was performed to identify factors affecting cost, and a cost model was used to generate predictions of various clinical and care management costs. All costs were converted into international dollars for the year 2019. Results One hundred thirty-eight patients with an average age of 14.45 months were included in this study. Twenty-one percent of the total patients included were admitted. The average total cost per episode of diarrhea was Int$109.01. Outpatient visit and hospitalization costs per episode of diarrhea were Int$59.87 and Int$292, respectively. The costs were significantly affected by the health facility type, patient type, health insurance scheme, complications with dehydration, and duration of the episode before consultation. Our model indicates that the prevention of one case of dehydration results in savings of Int$16.81, accounting for approximately 11 times of the primary treatment cost of one case of diarrhea in the community-based management program for diarrhea in Burundi. Conclusion Diarrhea is associated with a substantial economic burden to society. Evidence from this study provides useful information to support health interventions aimed at prevention of diarrhea and dehydration related to diarrhea in Burundi. Appropriate and timely care provided to patients with diarrhea in their communities and primary health centers can significantly reduce the economic burden of diarrhea. Implementing a health policy to provide inexpensive treatment to prevent dehydration can save significant amount of health expenditure.

scholarly journals Detection of Allee effects in marine fishes: analytical biases generated by data availability and model selection

2017 ◽  
Vol 284 (1861) ◽  
pp. 20171284 ◽  
Author(s):  
Tommi Perälä ◽  
Anna Kuparinen
Keyword(s):  
Statistical Approach ◽  
Positive Association ◽  
Scientific Basis ◽  
Marine Fishes ◽  
Clupea Harengus ◽  
Data Availability ◽  
Allee Effects ◽  
Methodological Issues ◽  
Data Limitations ◽  
Colonization Success

The demographic Allee effect, or depensation, implies positive association between per capita population growth rate and population size at low abundances, thereby lowering growth ability of sparse populations. This can have far-reaching consequences on population recovery ability and colonization success. In the context of marine fishes, there is a widespread perception that Allee effects are rare or non-existent. However, studies that have failed to detect Allee effects in marine fishes have suffered from several fundamental methodological and data limitations. In the present study, we challenge the prevailing perception about the rarity of Allee effects by analysing nine populations of Atlantic herring ( Clupea harengus ), using Bayesian statistical methods. We find that populations of the same species can show either strong evidence for Allee effects or compensation. We explicitly demonstrate how the evidence for Allee effects is strongly provisional on observations made at low population abundances. We contrast our statistical approach with previous attempts to detect Allee effects and illustrate methodological issues that can lead to erroneous conclusions about the nature of population dynamics at low abundance. The present study demonstrates that there is no substantive scientific basis to support the perception that Allee effects are rare or non-existent in marine fishes.

scholarly journals Development of a New KPI for the Economic Quantification of Six Big Losses and Its Implementation in a Cyber Physical System

2020 ◽  
Vol 10 (24) ◽  
pp. 9154
Author(s):  
Paula Morella ◽  
María Pilar Lambán ◽  
Jesús Royo ◽  
Juan Carlos Sánchez ◽  
Jaime Latapia
Keyword(s):  
Real Time ◽  
Physical System ◽  
Performance Indicator ◽  
Cost Model ◽  
Relevant Information ◽  
Cyber Physical System ◽  
Time Data ◽  
Real Time Data ◽  
Different Dimensions ◽  
The Cost

The purpose of this work is to develop a new Key Performance Indicator (KPI) that can quantify the cost of Six Big Losses developed by Nakajima and implements it in a Cyber Physical System (CPS), achieving a real-time monitorization of the KPI. This paper follows the methodology explained below. A cost model has been used to accurately develop this indicator together with the Six Big Losses description. At the same time, the machine tool has been integrated into a CPS, enhancing the real-time data acquisition, using the Industry 4.0 technologies. Once the KPI has been defined, we have developed the software that can turn these real-time data into relevant information (using Python) through the calculation of our indicator. Finally, we have carried out a case of study showing our new KPI results and comparing them to other indicators related with the Six Big Losses but in different dimensions. As a result, our research quantifies economically the Six Big Losses, enhances the detection of the bigger ones to improve them, and enlightens the importance of paying attention to different dimensions, mainly, the productive, sustainable, and economic at the same time.

Design for Product Variety: Key to Product Line Structuring

1995 ◽  
Author(s):  
Kosuke Ishii ◽  
Cheryl Juengel ◽  
C. Fritz Eubanks
Keyword(s):  
Supply Chain ◽  
Life Cycle ◽  
Manufacturing Process ◽  
Life Cycle Cost ◽  
Manufacturing System ◽  
Product Variety ◽  
Product Line ◽  
Customer Preference ◽  
The Cost ◽  
Structure Graph

Abstract This study develops a method to capture the broadest customer preference in a product line while minimizing the life-cycle cost of providing variety. The paper begins with an overview of product variety and its importance in overhead costs: supply chain, equipment and tooling, service, and recycling. After defining the product structure graph as a representation of variety, the paper introduces an approximate measure for the customer importance and life-cycle cost of product variety The cost measure utilizes the concept of late point identification which urges standardization early in the manufacturing process and differentiation at the end of the process. The variety importance-cost map allows engineers to identify cost drivers in the design of the product or the manufacturing system and seek improvements. The refrigerator door example illustrates the concept. On-going work seeks to validate and enhance the method with several companies from different industries.

scholarly journals GASOL: Gas Analysis and Optimization for Ethereum Smart Contracts

2020 ◽  
pp. 118-125 ◽  
Author(s):  
Elvira Albert ◽  
Jesús Correas ◽  
Pablo Gordillo ◽  
Guillermo Román-Díez ◽  
Albert Rubio
Keyword(s):  
Upper Bound ◽  
Cost Model ◽  
Gas Analysis ◽  
Smart Contracts ◽  
Cost Models ◽  
Automatic Optimization ◽  
Gas Consumption ◽  
The Cost ◽  
Storage Patterns ◽  
Program Line

Abstract We present the main concepts, components, and usage of Gasol, a Gas AnalysiS and Optimization tooL for Ethereum smart contracts. Gasol offers a wide variety of cost models that allow inferring the gas consumption associated to selected types of EVM instructions and/or inferring the number of times that such types of bytecode instructions are executed. Among others, we have cost models to measure only storage opcodes, to measure a selected family of gas-consumption opcodes following the Ethereum’s classification, to estimate the cost of a selected program line, etc. After choosing the desired cost model and the function of interest, Gasol returns to the user an upper bound of the cost for this function. As the gas consumption is often dominated by the instructions that access the storage, Gasol uses the gas analysis to detect under-optimized storage patterns, and includes an (optional) automatic optimization of the selected function. Our tool can be used within an Eclipse plugin for which displays the gas and instructions bounds and, when applicable, the gas-optimized function.

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