Purpose -This paper aims to present a methodology for activity-based costing, which combines simulation modeling and association rule mining, one of the core data-mining techniques. The objective of the proposed methodology is to deal with the problem of defining cost drivers. Design/methodology/approach -Activity-based costing uses the output produced by the simulation of cost drivers as inputs. As opposed to the integration of the ABC technique with simulation modeling, the possibility of estimating an empirical distribution of the simulated cost drivers does not exist in the proposed methodology. This is achieved with the use of data-mining techniques and is based on the proposition that, if an association is found between a cost driver, whose estimation or calculation is time-consuming, and another cost driver, which can easily be estimated or calculated, then the latter can lead to the estimation or calculation of the former. Findings -The extracted association rules correspond to existing dependencies between the cost drivers. Originality/value -The paper presents a combined methodology to deal with the problem of defining cost drivers in activity-based costing. An example of the proposed methodology in healthcare is also presented.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.