Impact of capital budgeting techniques for investment decisions on optimising cost, in light of implementing MRPII systems: evidence from Jordan

The study aims to measure impact of using capital budgeting practices for investment decisions on cost optimisation; in light of implementing manufacturing resource planning (MRPII) systems at the Jordanian industrial shareholding companies. Researchers developed a questionnaire that covered all study variables to achieve objectives and applied it on 35 industrial companies. Researchers distributed 140 questionnaires on companies' employees within the analysis unit (financial managers, accounting heads of departments, accountants, and internal control managers), and analysed study data using the appropriate statistical methods within PLS-4 software. Results showed that Jordanian industrial companies used capital budgeting techniques for investment decisions and had a significant impact on cost optimisation; in light of implementing MRPII systems. Results also showed that independent project decisions were the most used techniques while replacement decisions were the least used in these companies. The study recommended motivating Jordanian industrial companies to use techniques of capital budgeting more often whenever making capital investment decisions, as well as training accountants on using these techniques with increasing the interest of industrial companies on using modern manufacturing systems, such as MRPII due to its direct and indirect impact on improving costs to reach the competitive advantage of companies.