Life-cycle costing : using activity-based costing and Monte Carlo methods to manage future costs and risks

Title:

Personal Author:

Emblemsvag, Jan

Publication Information:

Hoboken, NJ : John Wiley & Sons, 2003

ISBN:

9780471358855

Subject Term:

Costs, Industrial

Life cycle costing

Risk management

Available:*

Library	Item Barcode	Call Number	Material Type	Item Category 1	Status
Searching... PSZ JB	30000010018076	HD47 E58 2003	Open Access Book	Book	Searching... Unknown

Summary

Everyone jokes about the 20/20 hindsight of cost management. In Life-Cycle Costing, Jan Emblemsvag proposes to do something about it.

Here's a new approach to life cycle costing that brings activity-based costing, risk, and uncertainty into the forefront. You'll focus on future costs and learn how you can perform any type of cost management activity better than before by introducing uncertainty into models and exploiting them to the max.

Order your copy today!

Author Notes

Jan Emblemsvag is a management consultant with Det Norske Veritas Consulting, where he works on cost management, risk management, and business development projects

Preface	p. ix
Acknowledgments	p. xv
1 Introduction	p. 1
What Does It Cost?	p. 1
The Role of Life-Cycle Costing	p. 4
Why Activity-Based Life-Cycle Costing?	p. 5
Notes	p. 14
2 Basics of Life-Cycle Costing	p. 16
What Is a Life Cycle?	p. 16
What Is a Cost?	p. 28
Four Ways of LCC	p. 36
Notes	p. 47
3 Uncertainty Analysis and Risk Management	p. 51
What are Risk and Uncertainty?	p. 51
Uncertainty, Risk, and Utility	p. 68
Common Ways of Analyzing Risk and Uncertainty	p. 71
How Belief Sheds Light on Risk and Uncertainty	p. 76
Reduce Risk by Introducing Uncertainty: How Monte Carlo Methods Work	p. 84
Traditional Risk Management	p. 89
Notes	p. 92
4 Activity-Based Costing	p. 95
Motivating Example	p. 95
Activity-Based Costing	p. 100
ABC Example and Case Study	p. 121
From the Trenches	p. 145
Notes	p. 147
5 Activity-Based Life-Cycle Costing	p. 150
Step 1 Define the Scope of the Model and the Corresponding Cost Objects	p. 150
Step 2 Obtain and Clean Bill of Materials for All Cost Objects	p. 153
Step 3 Identify and Quantify the Resources	p. 153
Step 4 Create an Activity Hierarchy and Network	p. 156
Step 5 Identify and Quantify Resource Drivers, Activity Drivers, and Their Intensities	p. 159
Step 6 Identify the Relationships between Activity Drivers and Design Changes	p. 159
Step 7 Model the Uncertainty	p. 160
Step 8 Estimate the Bill of Activities	p. 161
Step 9 Estimate the Cost of Cost Objects and Their Performance Measures	p. 162
Step 10 Perform Monte Carlo Simulations and Relevant Analyses	p. 170
Further Explanation Regarding Some Steps	p. 173
Notes	p. 181
6 Case Study: Life-Cycle Costing and Tire Disposal	p. 183
What the Decision Is About	p. 184
Traditional LCC Implementation	p. 186
Activity-Based LCC Implementation	p. 200
Discussion	p. 211
Closure	p. 215
Epilogue	p. 216
Notes	p. 216
7 Activity-Based Life-Cycle Costing for Platform Supply Vessels	p. 218
Operating a Platform Supply Vessel	p. 218
Problem Statement and System Boundaries	p. 221
Information Sources	p. 222
Activity-Based LCC Model Implementation and Results	p. 222
Identifying the Major Operational Risks	p. 242
Closure	p. 243
Notes	p. 244
8 Activity-Based Life-Cycle Costing at WagonHo!	p. 245
WagonHo!'s New Strategy and Business Idea	p. 246
Developing an Activity-Based LCC Model	p. 247
Results and How to Use Them	p. 266
Closure	p. 281
Notes	p. 283
9 From Hindsight to Foresight	p. 284
Activity-Based LCC Revisited	p. 284
Ideas for the Future	p. 291
Some Thoughts at the End	p. 294
Notes	p. 297
Appendix A Monte Carlo Simulation Example	p. 298
Problem Definition	p. 298
Hypotheses to Be Tested	p. 300
Results and Discussion	p. 301
Appendix B SFI Group System	p. 305
Glossary	p. 308
Acronyms	p. 314
Index	p. 315

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Summary

Summary

Author Notes

Table of Contents