Search results

1 – 1 of 1
Per page
102050
Citations:
Loading...
Access Restricted. View access options
Article
Publication date: 17 January 2020

Saeed Mirzamohammadi, Saeed Karimi and Mir Saman Pishvaee

The purpose of this paper is to develop a new systematic method for a multi-unit organization to cope with the cost allocation problem, which is an extension of the reciprocal…

214

Abstract

Purpose

The purpose of this paper is to develop a new systematic method for a multi-unit organization to cope with the cost allocation problem, which is an extension of the reciprocal method. As uncertainty is the inherent characteristic of business environments, assuming changes in engaged parameters is almost necessary. The outputs of the model determine the total value of each unit/business lines or product.

Design/methodology/approach

In the proposed method, contrary to existing models, business units are able to transfer their costs to other units, and also, not necessarily transfer the total costs of support units completely. The DEMATEL approach, which finds all relationships between different parts of a system, is also applied for computing effects of the units’ expense paid to each other. Moreover, a fuzzification approach is used to capture linguistic experts’ judgments about related data.

Findings

Being closer to the real-world problem in comparison to the previous approach, the proposed systematic approach encompasses the other cost allocation models.

Practical implications

Applying the proposed model for a system like a multi-unit organization, the total price of each unit/business line can be obtained. Moreover, this cost allocation process guides the related decision-makers to better manage the expenses that each unit pays the others.

Originality/value

In the existing studies, business units cannot pay expense support units. However, in the proposed method, the business units are able to pay expenses for other units, and also, not necessarily pay total expenses for support unit completely. Moreover, considering engaged parameters as fuzzy numbers makes the proposed model closer to real-world problems.

Details

Kybernetes, vol. 49 no. 10
Type: Research Article
ISSN: 0368-492X

Keywords

1 – 1 of 1
Per page
102050