The Core Elements of RCA
There are three core elements that enable RCA to lay a very different foundation for its cost model.
- The view of resources – resources and their costs are considered foundational to proper cost modeling and decision support. An organization’s cost and revenues are all a function of the resources that produce them.
- Quantity-based modeling – the entire model is constructed using operational quantities. Operational data is the foundation of value creation and the leading indicator of economic outcomes.
- Cost behavior – value is added as a veneer to the quantity-based model and costs/dollars behavior is determined by the behavior of resource quantities as they are applied to value creating operations within an organization.
Read more about this topic: Resource Consumption Accounting
Famous quotes containing the words core and/or elements:
“Individual science fiction stories may seem as trivial as ever to the blinder critics and philosophers of today—but the core of science fiction, its essence ... has become crucial to our salvation if we are to be saved at all.”
—Isaac Asimov (1920–1992)
“An illustrious individual remarks that Mrs. [Elizabeth Cady] Stanton is the salt, Anna Dickinson the pepper, and Miss [Susan B.] Anthony the vinegar of the Female Suffrage movement. The very elements get the “white male” into a nice pickle.”
—Anonymous, U.S. women’s magazine contributor. The Revolution (August 19, 1869)