Cost efficiency benchmarking for operational units with multiple cost drivers

Cost efficiency benchmarking for operational units with multiple cost drivers

0.00 Avg rating0 Votes
Article ID: iaor20032112
Country: United States
Volume: 31
Issue: 4
Start Page Number: 813
End Page Number: 832
Publication Date: Oct 2000
Journal: Decision Sciences
Authors: , , ,
Keywords: programming: integer
Abstract:

We consider the activity-based costing situation, in which for each of several comparable operational units, multiple cost drivers generate a single cost pool. Our study focuses on published data from a set of property tax collection offices, called rates departments, for the London metropolitan area. We define what may be called benchmark or most efficient costs per unit of driver. A principle of maximum performance efficiency is proposed, and an approach to estimating the benchmark unit costs is derived from this principle. A validation approach for this estimation method is developed in terms of what we call normal-like-or-better performance effectiveness. Application to longitudinal data on a single unit is briefly discussed. We also consider some implications for the more routine case when costs are disaggregated to subpools associated with individual cost drivers.

Reviews

Required fields are marked *. Your email address will not be published.