Purpose – The purpose of this paper is to present the use of activity-based costing (ABC) approach as an alternative option to the traditional cost accounting system. The contribution of this study is to demonstrate, through a simple example, the application of that costing system in a service (maintenance) industry, i.e. the paper intended to develop a procedure for a cost model that help in calculating any maintenance job cost, to a reasonable degree of accuracy, based on the actual activities performed. Design/methodology/approach – This research uses a simple example whereby hypothetical activities and cost data of maintaining an injector and a pump, of an internal combustion engine, are used, presented and analyzed based on the use of the developed procedure. Findings – ABC system provides more accurate cost estimates rather than the traditional “order costing” methods that uses unit-level costs which are variable in relation to change in service volume. Traditional cost methods distort the costs by applying overhead uniformly over different jobs of varied complexities and activities scope. On the other hand, ABC is a useful means to distribute the overhead costs in proportion (fairly) to the actual activities performed in a specific job and, hence, enhance the rationality of decision making, i.e. will not distort the accounting information used for cost reduction, pricing, and evaluation matters. The results obtained from the analysis showed that allocating costs to the maintained injector decreased from $83.55 to $71.95 and, finally, to $67.57 when using the workshop-wide, two-stage and ABC overhead allocation methods, respectively; while that of the pump increased from $298.90 to $340.34 and, finally, to $359.48 when using the same three methods, in the same order, respectively. The result is quite fair when considering the complexity of the fuel pump, in terms of design and maintenance, when compared with the injector. Notice that using volume to allocate overhead costs results in over costing high-volume products, e.g. injectors (simple in terms of design and operation) and under costing low-volume products, e.g. pumps (more complex in terms of design and operation). The paper recommends to use ABC as a more accurate and fair method when charging maintenance job orders based on the analysis of costing two maintained items in the same premise while consuming different overhead resources. Practical implications – This study attempts to analyze different methods to calculate a specific corrective maintenance job order. It strives to remedy the drawbacks of the traditional overhead costing of a job order when using principles related to the size of service, such as the direct labor cost/hours, as an allocation base. Consequently, the study proposed a new costing method, i.e. application of ABC. The traditional costing approach is considered by many firms as the best costing method. Nevertheless, it allocates overhead cost over job performed uniformly (equally) not differentiating between the complexity of the job and variety of the activities performed, e.g. using the same allocation base for “oil change” and “fuel pump adjustment” activities. So, ABC prevents cost distortions (unfairness) that could not be prevented by traditional cost accounting system. The author believes that the method presented in this paper will provide a useful management tool for costing maintenance jobs based on the appropriate selected activity drivers in maintenance workshops. The method could be applied for costing maintenance activities in maintenance of all industrial sectors. Originality/value – The use of traditional costing method has proven to be distorted by applying overhead uniformly over different jobs of varied complexities and activities scope. In this paper the authors strive to present an effective costing alternative that outperforms the traditional ones with regard to overhead allocation. The paper aims to find reliable and fair maintenance costing method, i.e. to find out the relationships between maintenance activities and cost drivers. Although, ABC is widely used in manufacturing industry, no application or current research has presented an applicable thorough worked-out example, with the exception, to the author’s knowledge, of one in the aeronautical industry, to implement ABC method in maintenance industry. The importance of using this method comes from the fact that it provides, relatively, accurate and fair maintenance bills that provide customer satisfaction and firm good image. Hence, the paper is relevant in this respect and intended to contribute to the practice of maintenance management.

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Purpose -The purpose of the paper is to find the "effect of economic value of maintenance cost on the optimum selection of one alternative (either out-or-in-sourcing) through the analysis of a case study of two projects: an existing on-going project and a proposed bidding project". In particular, the research is conducted to help PetroCost for Engineering Investment and Construction Company to take a decision on whether to have its own earth moving fleet (and hence maintain it) or rent one including the maintenance service as part of the outsourcing contract. Design/methodology/approach -This research uses a case study approach whereby cost data and information are collected from two case projects, then presented and analyzed. Economic tools (measures of worth) and excel software were used in the first project, where payback period method and break-even analysis are used in the second project. The two projects were considered as an integrated (complementary) case study, so different measures were applied to each project, although the three measures could be applied, implicitly, to each of them. The payback method is used as a quick screening method to determine, approximately, how long the project takes to recover the invested outlays. If the period is shorter than the period of time desired by the investor, then a further thorough analyses, rate of return and break-even, are recommended to be undertaken. Two of the authors were consultants to the study, where the third was the technical manager of the company (PetroCost). Findings -The results obtained from the analysis of the first case project (existing on-going project) showed a saving of SDG717,484.31, while the second case study (bidding) showed a saving of 33.4 percent over the out-sourcing cost, and a break-even point of 27 days, one third of the recommended project life. Both cases are in favor of having their own trucks while conducting in-house maintenance. Practical implications -The traditional in-house approach is considered by many firms as the best maintenance strategy. Nevertheless, out-sourcing becomes a recognized challenging competing option, worldwide. However, out-sourcing option not widely practiced in Sudan. The decision criteria presented in this paper provides a useful management tool for selecting the appropriate maintenance organization strategy. Although the criteria is applied for a truck fleet case in a construction firm, but it can be extended to the management of maintenance activities in the growing oil and associated industries in the country, besides the existing ones, where the skills' shortage of qualified maintenance personnel is evident. Originality/value -Much of previous and current research on outsourcing focuses on managing outsourcing projects and evaluating ex post decisions' consequences (e.g. output measurability) more than addressing early planning and feasibility study stages. Hence, the paper is relevant in this respect and intended to contribute to the practice of maintenance management.

Innovative structures are often required to institutionalize large scale process technologies. One such structure the "Nucleus-Snowball-Hydra'' structure," is described in this paper. The use of force-coersion change strategies by mechanistic organizations is generally not successful in introducing new process technologies that require the wide spread modification of many organizational components. To successfully introduce these technologies, empirical -rational, or normative-reeducative strategies are required. The "Nucleus-Snowball-Hydra'' structure (N-S-H) is an internal organization that uses these latter strategies for successfully managing technology adoption. The N-S-H involves three distinct phases. The first phase, the Nucleus structure, provides the generalized innovative management methodology and project management required for implementing the technology. The second phase, the Snowball structure, provides for information flow between the nucleus (team) and the existing mechanistic organizational structures impacted by the new technology. The third phase, the Hydra structure, moves toward the detailed design and the technology establishment. This multiple team effort accelerates the diffusion of information concerning the new technology and provides feedback on the opportunities and the problems of organizational modification. Effective performance using the N-S-H structures depends on the issues of sponsorship, organizational strategy and personnel motivation. The N-S-H structure provides the context for the successful adoption of large scale process technologies.