ABC Cost Driver Framing and Altering the Balance of Power in Customer-Supplier Negotiations

This study examines how activity-based costing (ABC) cost driver framing affects suppliers’ ability to increase their bargaining power when facing powerful customers. Results of an experiment show that suppliers with high potential to contribute to increasing joint profits are able to increase their power and earn a higher share of joint profits than suppliers with low contribution potential. However, providing suppliers with externally framed cost drivers (cost drivers represented as customers’ activities) instead of internally framed cost drivers (cost drivers represented as suppliers’ own activities) reduces their ability to utilize contribution potential as a source of power. Analyses of negotiators’ behavior show that suppliers with high contribution potential and internally framed cost drivers use more integrative tactics to increase joint profits, allowing them to earn higher shares of joint profits. This study shows that the how firms frame cost drivers affects negotiators’ ability to improve joint profits and negotiation power.

СИСТЕМАТИЗАЦІЯ ВИТРАТОУТВОРЮЮЧИХ ЧИННИКІВ ДЛЯ УПРАВЛІННЯ ВИТРАТАМИ ПІДПРИЄМСТВА НА ТАКТИЧНОМУ ТА СТРАТЕГІЧНОМУ РІВНЯХ

The article attempts to substantiate the key approaches to the systematization of cost-driving factors from the enterprise cost management perspective (tactical and strategic) and offers a definition to a factor concept. The study presents the existing scientific approaches to the classification of cost drivers as well as an interpretation of cost-driving factors. Groups of structural factors within internal and external environment that affect enterprise costing have been identified along with revealing the character of such influence, i.e. whether they provide a direct indirect effect on the company expenditures. Given the tactical and strategic management objectives, the authors suggest systematization of all cost drivers into two groups. In particular, tactical management covers the following factors: output scale, product range, company cost management methods, qualification of personnel, and depreciation accrual. Within the scope of this study, strategically critical factors are represented by organizational business pattern of production, technology level, lack of brand awareness for domestic products, inflation rate, average salary range, low solvency, high costs for raw materials and energy, high tolls, import dependency, strong market competition, low demand, lack of government support, excessive tax burden, frequent changes in tax legislation, high loan interest rates, unfavourable investment environment, poor networking between domestic enterprises in complementary industries, small share of medium-sized businesses or small business alliances. In addition, in the frameworks of strategic cost management, the study offers to classify the cost drivers into the following groups: economic, market- or tax-based, financial and systemic. Apart from that, the relationship between individual cost-driving factors has been revealed. The findings argue that strategic cost management has a number of limitations associated with certain challenges to attain accuracy in forecasting change in factors for successive periods.

Estimating the economic impacts of percutaneous coronary intervention in Australia: a registry-based cost burden study

ObjectivesIn this study, we sought to evaluate the costs of percutaneous coronary intervention (PCI) across a variety of indications in Victoria, Australia, using a direct per-person approach, as well as to identify key cost drivers.DesignA cost-burden study of PCI in Victoria was conducted from the Australian healthcare system perspective.SettingA linked dataset of patients admitted to public hospitals for PCI in Victoria was drawn from the Victorian Cardiac Outcomes Registry (VCOR) and the Victorian Admitted Episodes Dataset. Generalised linear regression modelling was used to evaluate key cost drivers. From 2014 to 2017, 20 345 consecutive PCIs undertaken in Victorian public hospitals were captured in VCOR.Primary outcome measuresDirect healthcare costs attributed to PCI, estimated using a casemix funding method.ResultsKey cost drivers identified in the cost model included procedural complexity, patient length of stay and vascular access site. Although the total procedural cost increased from $A55 569 740 in 2014 to $A72 179 656 in 2017, mean procedural costs remained stable over time ($A12 521 in 2014 to $A12 185 in 2017) after adjustment for confounding factors. Mean procedural costs were also stable across patient indications for PCI ($A9872 for unstable angina to $A15 930 for ST-elevation myocardial infarction) after adjustment for confounding factors.ConclusionsThe overall cost burden attributed to PCIs in Victoria is rising over time. However, despite increasing procedural complexity, mean procedural costs remained stable over time which may be, in part, attributed to changes in clinical practice.

Economic costs at age five associated with very preterm birth: multinational European cohort study

Background This study aims to estimate the economic costs of care provided to children born very preterm and extremely preterm across 11 European countries, and to understand what perinatal and socioeconomic factors contribute to higher costs. Methods Generalised linear modelling was used to explore the association between perinatal and sociodemographic characteristics and total economic costs (€, 2016 prices) during the fifth year of life. Results Lower gestational age was associated with increased mean societal costs of €2755 (p < 0.001), €752 (p < 0.01) and €657 (p < 0.01) for children born at < 26, 26–27 and 28–29 weeks, respectively, in comparison to the reference group born at 30–31 weeks. A sensitivity analyses that excluded variables (BPD, any neonatal morbidity and presence of congenital anomaly) plausibly lying on the causal pathway between gestational age at birth and economic outcomes elevated incremental societal costs by €1482, €763 and €144 at < 26, 26–27 and 28–29 weeks, respectively, in comparison to the baseline model. Conclusion This study provides new evidence about the main cost drivers associated with preterm birth in European countries. Evidence identified by this study can act as inputs within cost-effectiveness models for preventive or treatment interventions for preterm birth. Impact What is the key message of your article? This study provides new evidence about the magnitude and drivers of economic costs associated with preterm birth in European countries. What does it add to the existing literature? Lower gestational age is associated with increased mean societal costs during mid-childhood with indirect costs representing a key driver of increased costs. What is the impact? For policy makers, this study adds to sparse evidence about the main cost drivers associated with preterm birth in European countries beyond the first 2 years of life.

Influences on the excitation behavior of lightweight planetary gearboxes

One of the main cost drivers in mechanical engineering is material. In order to reduce costs, but also to reduce CO2 emissions in mobile applications, increasing efforts are being made to reduce the mass of components. In gear development, power density as the ratio of transmittable power to gear weight has become one of the key quality criteria. However, saving material usually also leads to lower stiffness of the components. In combination with higher specific powers and the associated higher forces, higher deformations and displacements occur in the gear unit. The gear unit is more elastic overall.Within this paper a measuring cell is presented which allows to measure the influence of elastic deformations and additional misalignments on the excitation behavior. By means of this measuring cell, the influence of certain misalignments and different ring gear rim thicknesses are investigated. The results show modulated excitations and sidebands which are excited depending on the misalignment.

Disease and economic burden increase with systemic lupus erythematosus severity 1 year before and after diagnosis: a real-world cohort study, United States, 2004–2015

ObjectiveTo assess the economic burden of patients with SLE by disease severity in the USA 1 year before and after diagnosis.MethodsPatients aged ≥18 years with a first SLE diagnosis (index date) between January 2005 and December 2014 were identified from administrative commercial claims data linked to electronic medical records (EMRs). Disease severity during the year after diagnosis was classified as mild, moderate, or severe using claims-based algorithms and EMR data. Healthcare resource utilisation (HCRU) and all-cause healthcare costs (2017 US$) were reported for 1 year pre-diagnosis and post-diagnosis. Generalised linear modelling examined all-cause costs over 1 year post-index, adjusting for baseline demographics, clinical characteristics, Charlson Comorbidity Index and 1 year pre-diagnosis costs.ResultsAmong 2227 patients, 26.3% had mild, 51.0% moderate and 22.7% severe SLE. Mean per-patient costs were higher for patients with moderate and severe SLE compared with mild SLE during the year before diagnosis: mild US$12 373, moderate $22 559 and severe US$39 261 (p<0.0001); and 1-year post-diagnosis period: mild US$13 415, moderate US$29 512 and severe US$68 260 (p<0.0001). Leading mean cost drivers were outpatient visits (US$13 566) and hospitalisations (US$10 252). Post-diagnosis inpatient utilisation (≥1 stay) was higher for patients with severe (51.2%) and moderate (22.4%) SLE, compared with mild SLE (12.8%), with longer mean hospital stays: mild 0.47 days, moderate 1.31 days and severe 5.52 days (p<0.0001).ConclusionHCRU and costs increase with disease severity in the year before and after diagnosis; leading cost drivers post-diagnosis were outpatient visits and hospitalisations. Earlier diagnosis and treatment may improve health outcomes and reduce HCRU and costs.

A PROPOSED CASE STUDY FIELD RESEARCH METHODOLOGY TO TEST COST DRIVERS: AN EXAMPLE OF PROPOSED FIELD STUDY AT A NUCLEAR MEDICINE UNIT

This paper illustrates how to use case study method to conduct the cost driver research at hospitals by identifying activity-based cost drivers at the nuclear medicine unit (NMU) of a teaching hospital. I argue that recognizing the activity-based cost could improve the accuracy of estimating costs by identifying the underutilized resources and value-added and non-value-added cost drivers, to reduce non-value-added costs; thereby, facilitating the management to make better informed managerial decisions (e.g., improving pricing practices and using resources more efficiently). Therefore, I believe that this study may provide a useful inference to hospitals to improve the quality and quantity of the service, which they (or would) provide. Furthermore, this paper possibly provides an informative research methodology for researchers by showing how to extend the current literature by applying the same cost analysis research model on a different dataset for the health care industry research.