Aims of Model
With ABC, an organization can soundly estimate the cost elements of entire products and services. That may help inform a company's decision to either:
- Identify and eliminate those products and services that are unprofitable and lower the prices of those that are overpriced (product and service portfolio aim)
- Or identify and eliminate production or service processes that are ineffective and allocate processing concepts that lead to the very same product at a better yield (process re-engineering aim).
In a business organization, the ABC methodology assigns an organization's resource costs through activities to the products and services provided to its customers. ABC is generally used as a tool for understanding product and customer cost and profitability based on the production or performing processes. As such, ABC has predominantly been used to support strategic decisions such as pricing, outsourcing, identification and measurement of process improvement initiatives.
Read more about this topic: Activity-based Costing
Famous quotes containing the words aims and/or model:
“Our age is pre-eminently the age of sympathy, as the eighteenth century was the age of reason. Our ideal men and women are they, whose sympathies have had the widest culture, whose aims do not end with self, whose philanthropy, though centrifugal, reaches around the globe.”
—Frances E. Willard 1839–1898, U.S. president of the Women’s Christian Temperance Union 1879-1891, author, activist. The Woman’s Magazine, pp. 137-40 (January 1887)
“One of the most important things we adults can do for young children is to model the kind of person we would like them to be.”
—Carol B. Hillman (20th century)