A Case Study on the Un-Used Capacity Assessment Using Time Driven Activity Based Costing for Magnetic Components
DOI:
https://doi.org/10.15282/ijim.9.0.2021.5954Keywords:
Time equation, Capacity cost rate, Unused capacityAbstract
The Electrical & Electronic (E&E) company is one of Malaysia’s leading industries that has 24.5% in manufacturing sector production. With a continuous innovation of E&E company, the current costing being used is hardly to access the complete activities with variations required for each workstation to measure the un-used capacity in term of resources and cost. The objective of this work is to develop a new costing structure using time-driven activity-based costing (TDABC). This data collection was obtained at E&E company located at Kuantan, Pahang that focusing on magnetic component. The historical data was considered in 2018. TDABC is used to measure the un-used capacity by constructing the time equation and capacity cost rate. This work found three conditions of un-used capacity. Type I is pessimistic situation whereby according to winding toroid core, the un-used capacity of time and cost are -14820 hours and -MYR2.60 respectively. It means the system must sacrifice the time and cost more than actual apportionment. Type II is most likely situation whereby according to assembly process, the un-used capacity of time and cost are 7400 hours and MYR201575.45 respectively. It means the system minimize the time and cost which close to fully utilize from the actual apportionment. Type III is optimistic situation whereby according to alignment process, the un-used capacity of time and cost are 4120 hours and MYR289217.15 respectively. It means the system used small amount of cost and time from the actual apportionment.
References
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Zaini, S.N.A.M. & Abu, M.Y. (2019). A Review on Time-Driven Activity based Costing System in Various Sectors. Journal of Modern Manufacturing Systems and Technology, 2,15-22.
Zamrud, N.F., Abu, M.Y., Kamil, N.N.N.M. & Safeiee, F.L.M. (2020). A Comparative Study of Product Costing by Using Activity-Based Costing (ABC) and Time-Driven Activity-Based Costing (TDABC) Method. Proceedings of the International Manufacturing Engineering Conference & The Asia Pacific Conference on Manufacturing Systems, 171-178.
Zamrud, N.F., Abu, M.Y., Kamil, N.N.N.M. & Safeiee, F.L.M. (2020). The Impact of Capacity Cost Rate and Time Equation of Time-Driven Activity-Based Costing (TDABC) on Electric Component. Proceedings of the International Manufacturing Engineering Conference & The Asia Pacific Conference on Manufacturing Systems, 81-87.
Zamrud, N.F., Abu, M.Y., Kamil, N.N.N.M. & Safeiee, F.L.M. (2020). A Comparative Study of Product Costing by Using Activity-Based Costing (ABC) and Time-Driven Activity-Based Costing (TDABC) Method. Proceedings of the International Manufacturing Engineering Conference & The Asia Pacific Conference on Manufacturing Systems,171-178.
Zheng, C.W. & Abu, M.Y. (2019). Application of Activity based Costing for Palm Oil Plantation. Journal of Modern Manufacturing Systems and Technology, 2, 1-14.
Abu, M.Y., Mohd Nor, E.E., & Abd Rahman, M.S. (2018). Costing improvement of remanufacturing crankshaft by integrating Mahalanobis-Taguchi System and Activity based Costing. IOP Conference Series: Materials Science and Engineering, 342, 1-10.
Afonso, P. & Santana, A. (2016). Application of the TDABC Model in the Logistics Process Using Different Capacity Cost Rates, 9(5), 1003-1019.
Allain, E. & Laurin, C. (2018). Explaining implementation difficulties associated with activity based costing through system uses. Journal of Applied Accounting Research, 19(1), 181-198.
Anzai, Y., Heilbrun, M.E. & Haas, D. (2017). Dissecting costs of CT study: application of TDABC (time-driven activity-based costing) in a Tertiary Academic Center. Acad Radiol, 24, 200–208.
Calvi, K., Halawa, F., Economou, M., Kulkarni, R. & Chung, S.H. (2019). Simulation study integrated with activity-based costing for an electronic device re-manufacturing system. The International Journal of Advanced Manufacturing Technology, 1-14.
Chang, C.T., Chou, Y.Y. & Zhuang, Z.Y. (2014). Apractical expectedvalue-approach model to assess the relevant procurement costs. Journal of the Operational Research Society.
Defourny, N., Perrier, L., Borras, J.M., Coffey, M., Corral, J., Hoozée, S., Loon, J.V., Grau, C. & Lievens, Y. (2019). National costs and resource requirements of external beam radiotherapy: A time-driven activity-based costing model from the ESTRO-HERO project. Radiotherapy and Oncology, 138, 187–194.
Donovan, C.J., Hopkins, M. & Kimmel, B.M. (2014). How Cleveland Clinic used TDABC to improve value. Heal Financ Manag.
Erhun, F., Mistry, B., Platchek, T., Milstein, A., Narayanan, V. G., & Kaplan, R. S. (2018). Time-driven activity-based costing of multivessel coronary artery bypass grafting across national boundaries to identify improvement opportunities : study protocol, 1-8.
Gui, F., Ren, S., Zhao, Y., Zhou, J., Xie, Z., Xu, C. & Zhu, F. (2019). Activity-based allocation and optimization for carbon footprint and cost in product lifecycle. Journal of Cleaner Production, 236, 1-13.
Haas, D.A. & Kaplan, R.S. (2017). Arthroplasty Today Variation in the Cost of Care for Primary Total Knee Arthroplasties. Arthroplasty Today, 3(1), 33-37.
Hernandez-Matias, J.C., Vizan, A., Hidalgo, A. & Rios, J. (2006). Evaluation of techniques for manufacturing process analysis. Journal of Intelligent Manufacturing, 17, 571–583.
Kaiser, M.J. (2019). The role of factor and activity-based models in offshore operating cost estimation. Journal of Petroleum Science and Engineering, 174, 1062–1092.
Kamil, N.N.N.M., & Abu, M.Y. (2018). Integration of Mahalanobis-Taguchi System and activity based costing for remanufacturing decision. Journal of Modern Manufacturing Systems and Technology, 1, 39-51.
Kamil, N.N.N.M., Abu, M.Y., Zamrud, N.F. & Safeiee, F.L.M. (2020). Analysis of Magnetic Component Manufacturing Cost Through the Application of Time-Driven Activity-Based Costing. Proceedings of the International Manufacturing Engineering Conference & The Asia Pacific Conference on Manufacturing Systems, 74-80.
Kamil, N.N.N.M., Abu, M.Y., Zamrud, N.F. & Safeiee, F.L.M. (2020). Proposing of Mahalanobis-Taguchi System and Time-Driven Activity-Based Costing on Magnetic Component of Electrical & Electronic Industry. Proceedings of the International Manufacturing Engineering Conference & The Asia Pacific Conference on Manufacturing Systems, 108-114.
Kaplan, R.S. (2014). Improving value with TDABC. Healthc Financ Manag, 68, 76–84.
Kaplan, R.S., Witkowski, M. & Abbott, M. (2014). Using time-driven activity-based costing to identify value improvement opportunities in healthcare. J Healthc Manag, 59, 399–412.
Keel, G., Savage, C., Rafiq, M. & Mazzocato, P. (2017). Time-Driven Activity-based Costing in Health Care: A Systematic Review of the Literature. Health Policy, 121(7), 755-763.
Lea, B.R. & Fredendall, L. D. (2002). The impact of management accounting, product structure, product mix algorithm, and planning horizon on manufacturing performance. International Journal of Production Economics, 79, 279–299.
Neto, H.F.M., Agostinho, F., Almeida, C.M.V.B., García, R.R.M. & Giannetti, B.F. (2018). Activity-based costing using multicriteria drivers: an accounting proposal to boost companies toward sustainability. Front. Energy Res., 6, 36.
Oklu, R., Haas, D. & Kaplan, R.S. (2015). Time-driven activity-based costing in IR. J Vasc Int Radiol., 26, 1829–1836.
Phan, T.N., Baird, K. & Su, S. (2018). Environmental activity management: its use and impact on environmental performance. Accounting, Auditing & Accountability Journal, 31(2), 651-673.
Safeiee, F.L.M., Abu, M.Y., Kamil, N.N.N.M. & Zamrud, N.F. (2020). The Application of Time-Driven Activity Based Costing System on Inductors in Electrics and Electronics Industry. Proceedings of the International Manufacturing Engineering Conference & The Asia Pacific Conference on Manufacturing Systems, 88-95.
Tsai, W.H. & Jhong, S.Y. (2019). Production decision model with carbon tax for the knitted footwear industry under activity-based costing, Journal of Cleaner Production, 207, 1150-1162.
Yang, C.H. (2018). An optimization portfolio decision model of life cycle activity-based costing with carbon footprint constraints for hybrid green power strategies. Computers and Operations Research, 1–16.
Yu, Y.R., Abbas, P.I., Smith, C.M., Carberry, K.E., Ren, H., Patel, B., Nuchtern, J.G. & Lopez, M.E. (2016). Time-Driven Activity-based Costing to Identify Opportunities for Cost Reduction in Pediatric Appendectomy. Journal of Pediatric Surgery, 51(12), 1962-1966.
Zaini, S.N.A.M. & Abu, M.Y. (2019). A Review on Time-Driven Activity based Costing System in Various Sectors. Journal of Modern Manufacturing Systems and Technology, 2,15-22.
Zamrud, N.F., Abu, M.Y., Kamil, N.N.N.M. & Safeiee, F.L.M. (2020). A Comparative Study of Product Costing by Using Activity-Based Costing (ABC) and Time-Driven Activity-Based Costing (TDABC) Method. Proceedings of the International Manufacturing Engineering Conference & The Asia Pacific Conference on Manufacturing Systems, 171-178.
Zamrud, N.F., Abu, M.Y., Kamil, N.N.N.M. & Safeiee, F.L.M. (2020). The Impact of Capacity Cost Rate and Time Equation of Time-Driven Activity-Based Costing (TDABC) on Electric Component. Proceedings of the International Manufacturing Engineering Conference & The Asia Pacific Conference on Manufacturing Systems, 81-87.
Zamrud, N.F., Abu, M.Y., Kamil, N.N.N.M. & Safeiee, F.L.M. (2020). A Comparative Study of Product Costing by Using Activity-Based Costing (ABC) and Time-Driven Activity-Based Costing (TDABC) Method. Proceedings of the International Manufacturing Engineering Conference & The Asia Pacific Conference on Manufacturing Systems,171-178.
Zheng, C.W. & Abu, M.Y. (2019). Application of Activity based Costing for Palm Oil Plantation. Journal of Modern Manufacturing Systems and Technology, 2, 1-14.
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Published
2021-01-03
How to Cite
Kamil, N. N. N. M., Zaini, S. N. A. M., & Abu, M. Y. (2021). A Case Study on the Un-Used Capacity Assessment Using Time Driven Activity Based Costing for Magnetic Components. International Journal of Industrial Management, 9, 32–53. https://doi.org/10.15282/ijim.9.0.2021.5954
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Vol 9 2021
