Optimal replenishment policy for a deteriorating green product: Life cycle costing analysis

In order to survive in today’s competitive global business environment, implementation of life cycle costing methodology with a greater emphasis on cost control could be one of the convincing approaches for the manufacturing firms. The product life cycle costing approach can help track and analyse the cost implications associated with each phase of product life cycle. Life cycle costing (LCC) practices with traditional costing methods may provide results that have a severe deviation from the real product LCC as it focuses on the cost of materials, labor and a low portion of overheads apportioned by the absorption rate to the product. Activity based costing (ABC) has emerged as one of the several innovative and more accurate costing methods in recent years. It is based on the principle that products or services consume activities and activities consume resources that generate costs. Thus, the ABC system focuses on calculating the costs incurred on performing the activities to manufacture a product. This paper presents a LCC modeling approach for estimating life cycle cost of pumps using activity based costing method. The study was conducted in a large pump manufacturing company from India that has significant global standing within its industry. Firstly, all the activities and cost drivers associated with the life cycle of a pump have been identified. A methodology for LCC analysis using ABC is then developed and it is applied to two different pumps manufactured by the same industry and the results obtained are presented.

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The Role of Green Quality Management and Product Life Cycle Costing in Achieving Competitive Advantage

International Journal of Research in Social Sciences and Humanities ◽

10.37648/ijrssh.v11i04.004 ◽

2021 ◽

Vol 11 (4) ◽

Author(s):

Durgham Ahmed Abdul Ridha ◽

Prof Dr Manal Jabbar Soror

Keyword(s):

Life Cycle ◽

Quality Management ◽

Competitive Advantage ◽

Product Life Cycle ◽

Life Cycle Costing ◽

Product Life ◽

Leadership Strategy ◽

Environmental Criteria ◽

Product Costs ◽

Cost Leadership Strategy

The principal objective of this study is to demonstrate how green quality management and product life cycle costing may help an organization gain a competitive advantage. Green quality management's influence on increasing product quality and meeting environmental criteria, as well as tracking the activities of product life cycle before, during, and after production, is demonstrated. Orienting these activities toward the production of eco-friendly products that fulfill the needs of customers, hence increasing organization's market share. We found from our study that proposed framework can help organizations improve their competitiveness. Green quality management contributes to environmental protection and the provision of high-quality products that fulfill needs and desires of green customer, enhancing product differentiation. Product life cycle costing is to determine costs of environmental activities and seek to minimize those costs, which translates to lower product costs, allowing organization to adopt a cost leadership strategy and gain a competitive advantage.

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Product Life Cycle Costing Applied to Manufacturing Systems

CIRP Annals ◽

10.1016/s0007-8506(07)62849-2 ◽

1998 ◽

Vol 47 (1) ◽

pp. 353-356 ◽

Cited By ~ 25

Author(s):

E. Westkämper ◽

D.v.d. Osten-Sacken

Keyword(s):

Life Cycle ◽

Product Life Cycle ◽

Manufacturing Systems ◽

Life Cycle Costing ◽

Product Life

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The role of the time-based product life cycle cost technique in managing costs in economic units

Global Journal of Economic and Business ◽

10.31559/gjeb2021.11.3.8 ◽

2021 ◽

Vol 11 (3) ◽

pp. 437-451

Author(s):

Dirar Abdulhameed Altoum Alotaibi ◽

Salah Mahdi Jawad Al-Kawaz ◽

Basem Abdul-Hussein Al-Qassab

Keyword(s):

Life Cycle ◽

Life Cycle Cost ◽

Product Life Cycle ◽

Business Environment ◽

Life Cycle Costing ◽

Accurate Data ◽

Product Life ◽

Product Competition ◽

The Cost

The purpose of this study is to direct interest in using the sound methodology in cost management and to choose a more effective approach to managing costs from a series of alternatives in order to obtain more accurate data on the cost of the product. Competition in the market, Clarifying the role of the time-based product life cycle costing technique in providing integrated information on resources and their costs and for each stage of the product life cycle, which would contribute to managing costs throughout the product life cycle. To achieve this goal, the time-based product life cycle costing technique was applied on data obtained from the laboratory records, the research sample, as well as the field experience. The research reached several conclusions, the most important of which is that the failure of traditional cost systems to meet the requirements and objectives of management as they are no longer able to provide accurate data that help the administration in making decisions as a result of changes and developments in the business environment, most notably the intense competition, which resulted in the emergence of modern techniques in the field of management Cost that is able to keep pace with these changes and developments. The most important of which is the time-based product life-cycle cost technique.

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