Risky Time Driven Activity Based Costing in a Medical Center: A Development, Implementation and Simulation based Optimization Approach

Morteza Bagherpour ()
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Morteza Bagherpour: Department of Industrial and Systems Engineering, University of Pretoria, South Africa

The Journal of Accounting and Management, 2015, issue 2, 47-61

Abstract: Nowadays, with the development of enterprises and increases in competitions, management needs to do more actual investigation and in-depth analysis. Meanwhile, practical information about the service cost of each client/product and determining free capacity of resources are highly desirable, in order to detect which of clients/products are more profitable. There are several available costing systems in the literature; however till the present time, none of them are considered to have a probabilistic nature associated with a business environment. In this paper, a standard time driven activity based costing (TDABC) is combined with a simulation model, proposing a novel algorithm called Risky TDABC. The three risky factors which are considered in this study are: 1.Resource capacity 2.Estimated activity time 3.The required quantity of an activity. Additionally, the idle time of each resource is also determined, an aspect which has not been considered in the standard TDABC system. Therefore, by applying a resource configuration management in a medical center, different scenarios are developed and compared to each other, finding the best-known alternative through a simulation based optimization approach. The obtained results are apparently found to be more actual and reliable. The proposed model is finally validated and successfully implemented in a healthcare center department.

Keywords: risk; time driven activity based costing; simulation based optimization; healthcare; idle time (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:dug:jaccma:y:2015:i:2:p:47-61

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