IDEAS home Printed from https://ideas.repec.org/a/bla/jbfnac/v27y2000i1-2p69-98.html
   My bibliography  Save this article

A Mathematical Programming Approach for Procurement Using Activity Based Costing

Author

Listed:
  • Zeger Degraeve
  • Filip Roodhooft

Abstract

Activity Based Costing and Management are important topics in today's management accounting literature. While there has been much attention paid in the Activity Based Costing literature to customer profitability analysis, process improvement and product design, there has been far less notice taken of purchasing. In this paper we develop an Activity Based Costing approach for the determination of procurement strategies. Vendor selection using an Activity Based Costing approach is choosing the combination of suppliers for a given product group that minimizes the total costs associated with the purchasing strategy. To this end we develop a mathematical programming model where decisions involve the selection of vendors and the determination of order quantities. The system computes the total cost of ownership, thereby increasing the objectivity in the selection process and giving the opportunity for various kinds of sensitivity analysis.

Suggested Citation

  • Zeger Degraeve & Filip Roodhooft, 2000. "A Mathematical Programming Approach for Procurement Using Activity Based Costing," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 27(1‐2), pages 69-98, January.
    • Handle: RePEc:bla:jbfnac:v:27:y:2000:i:1-2:p:69-98
    DOI: 10.1111/1468-5957.00306
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1468-5957.00306
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1468-5957.00306?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Karolina Gwarda, 2022. "Using the Analytic Hierarchy Process Method to Select the Best Supplies: A Case Study of a Production Company," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 430-440.
    2. Joris van de Klundert & Jeroen Kuipers & Frits C. R. Spieksma & Maarten Winkels, 2005. "Selecting Telecommunication Carriers to Obtain Volume Discounts," Interfaces, INFORMS, vol. 35(2), pages 124-132, April.
    3. Z Degraeve & F Roodhooft & B van Doveren, 2005. "The use of total cost of ownership for strategic procurement: a company-wide management information system," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(1), pages 51-59, January.
    4. Yim, Andrew, 2010. "Quality Cost and Failure Risk in the Choice of Single versus Multiple Sourcing," MPRA Paper 27858, University Library of Munich, Germany.
    5. Jans, R.F. & Degraeve, Z., 2005. "Modeling Industrial Lot Sizing Problems: A Review," ERIM Report Series Research in Management ERS-2005-049-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    6. Demirtas, Ezgi Aktar & Üstün, Özden, 2008. "An integrated multiobjective decision making process for supplier selection and order allocation," Omega, Elsevier, vol. 36(1), pages 76-90, February.
    7. Amid, A. & Ghodsypour, S.H. & O'Brien, C., 2006. "Fuzzy multiobjective linear model for supplier selection in a supply chain," International Journal of Production Economics, Elsevier, vol. 104(2), pages 394-407, December.
    8. Jaroslaw Milczarek & Piotr Cyplik & Sebastian Wieczerniak, 2018. "Using Total Cost Of Ownership As A Method For Identification Of Internal Problems In Purchase Area – Case Study," Business Logistics in Modern Management, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 18, pages 205-223.
    9. García Alcaraz Jorge Luis & Alvarado Iniesta Alejandro & Maldonado Macías Aidé Araceli, 2013. "Selección de proveedores basada en análisis dimensional," Contaduría y Administración, Accounting and Management, vol. 58(3), pages 249-278, julio-sep.
    10. Moisello Anna Maria, 2012. "Cost Measurement And Cost Management In Target Costing," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 533-547, July.
    11. Ekici, Ali, 2013. "An improved model for supplier selection under capacity constraint and multiple criteria," International Journal of Production Economics, Elsevier, vol. 141(2), pages 574-581.
    12. Liao, Zhiying & Rittscher, Jens, 2007. "Integration of supplier selection, procurement lot sizing and carrier selection under dynamic demand conditions," International Journal of Production Economics, Elsevier, vol. 107(2), pages 502-510, June.
    13. Degraeve, Zeger & Labro, Eva & Roodhooft, Filip, 2004. "Total cost of ownership purchasing of a service: The case of airline selection at Alcatel Bell," European Journal of Operational Research, Elsevier, vol. 156(1), pages 23-40, July.
    14. Amid, Amin & Ghodsypour, S.H. & O'Brien, Christopher, 2009. "A weighted additive fuzzy multiobjective model for the supplier selection problem under price breaks in a supply Chain," International Journal of Production Economics, Elsevier, vol. 121(2), pages 323-332, October.
    15. Wouters, Marc & Anderson, James C. & Wynstra, Finn, 2005. "The adoption of total cost of ownership for sourcing decisions--a structural equations analysis," Accounting, Organizations and Society, Elsevier, vol. 30(2), pages 167-191, February.
    16. Visani, Franco & Barbieri, Paolo & Di Lascio, F. Marta L. & Raffoni, Anna & Vigo, Daniele, 2016. "Supplier’s total cost of ownership evaluation: a data envelopment analysis approach," Omega, Elsevier, vol. 61(C), pages 141-154.
    17. Amid, A. & Ghodsypour, S.H. & O'Brien, C., 2011. "A weighted max-min model for fuzzy multi-objective supplier selection in a supply chain," International Journal of Production Economics, Elsevier, vol. 131(1), pages 139-145, May.
    18. Z. Degraeve & Eva Labro & F. Roodhooft, 2005. "Constructing a Total Cost of Ownership supplier selection methodology based on Activity-Based Costing and mathematical programming," Accounting and Business Research, Taylor & Francis Journals, vol. 35(1), pages 3-27.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jbfnac:v:27:y:2000:i:1-2:p:69-98. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0306-686X .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.