Target Cost Management (TCM): A Case Study of an Automotive Company

Baharudin, Norhafiza; Jusoh, Ruzita

doi:10.1016/j.sbspro.2015.01.398

Cited by 20 publications

(9 citation statements)

References 7 publications

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“…Alwisy et al (2020) and Pennanen et al (2011) dealt with the Target Costing application in the construction industry. The Target Costing Application in the automotive industry is presented by Baharudin and Jusoh (2015) and Ibusuki and Kaminski (2007). Potkány et al (2012) investigated customer preferences of simple woodbased houses for the purpose of using the target costing.…”

Section: Discussionmentioning

confidence: 99%

Use of Target Costing methodology in the construction of wood-aluminium windows — case study

Potkány

Krajčírová

Stasiak-Betlejewska

2021

Engineering Management in Production and Services

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The paper concerns the practical application of Target Costing to a specific product of the woodworking industry with a particular emphasis on customer needs and value analysis principles concerning individual components and functions of the product — a wood-aluminium window Gemini Quadrat FB. Based on principles of value analyses, the study used the functional cost analysis, the quantified target cost index of relevant components and the target cost chart for the allowable cost of components. Two levels of the q parameter — 5 % and 10 % — were used to construct the target cost chart. The target price (EUR 513.19) was assessed. The target production cost was at the level of allowable production costs (EUR 379.31). The results were used to confirm that the ideal value of the target cost index was not achieved for any component, and a higher value of the parameter q can be marked as soft. The paper provides assumptions for the assessment of possible alternatives and potential corrections. The case study presents the description of the Target Costing methodology along with the nuanced characteristics of the approaches used by various authors and the strengths and benefits of using the method.

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Section: Discussionmentioning

confidence: 99%

Use of Target Costing methodology in the construction of wood-aluminium windows — case study

Potkány

Krajčírová

Stasiak-Betlejewska

2021

Engineering Management in Production and Services

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“…Target costing is one of the crucial approaches advanced to attain this objective. Target costing applies assurance the quality and dependability the desirable standards through the clients from a strategy level forwards of product, but facilitating enterprises extended the profit margin that was desired (Baharudin and Jusoh, 2015). Target costing is a tool of design-dedicated and price-determined profit planning and it is expense of management system in which cross-practical groups work (Kaygusuz and Dokur, 2015).…”

Section: Literature Reviewmentioning

confidence: 99%

The Role of Target Cost in Cost Reduction: an Empirical Case of Bazian Cement Factory in Kri

Mahmood

Salih

Majeed

2022

JUOR

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Recently corporations attempt to make a fair competition in global markets, which apply different techniques and tactics to raise their industrial outputs with lower costs and it is enhancing companies' profitability. Implementation of target costing is employed in design of products and development phases, therefore purposes at reduction costs at the first stage of the life-cycle. The enterprises might be supported by a considerable technique for seizing the highest of profit margin of the product cost and regulate prices so it is vital tool for competitive advantage. Basically, the main purpose of this study is to examine the impact of implying target costing on reduction costs in Bazian Cement Factory in the Kurdistan region of Iraq. This study collected primary data through the survey and distributed 25 forms among the participants of the sample of the study. The findings of the study indicated that dependent variable (reduction costs) and independent variable (target costing) have a strong and positive link together, this means Bazian Cement Factory is successful in using target cost strategy.

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“…The target costing method is just the opposite of the traditional costing method and starts with sales prices. This method helps organizations to accurately cost estimate and reduce inadequate risk of profits, and develop better and faster products (Baharudina & Jusohb, 2015). In fact, the main purpose of the target costing is to estimate costs based on the goal pursued by the organization in a competitive environment.…”

Section: The Target Costing In Construction Projectsmentioning

confidence: 99%

A New Cost Management System for Construction Projects to increase Competitiveness and Traceability in a Project Environment

Toosi

Chamikarpour²

2021

RC-SAR

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Un nuevo sistema de gestión de costes de proyectos de construcción para aumentar la competitividad y la trazabilidad para entornos de proyectos. El objetivo principal de la investigación es utilizar nuevos métodos de cálculo de costes en los proyectos de construcción para reducir y controlar las desviaciones de costes y algunas limitaciones que presentan los modelos tradicionales. La hipótesis de la investigación se basa en la capacidad sinérgica del cálculo de costes basado en actividades centradas en el rendimiento, en combinación con el método de cálculo de costes objetivo para fomentar la competitividad del sistema de control de costes para entornos de proyectos. El método se elaboró para controlar los gastos directos y generales del proyecto durante su ejecución. Se realizó una entrevista con 26 directores financieros en dos o cuatro ocasiones entre junio de 2016 y mayo de 2017 con el fin de validar y modificar el método. Siguiendo una entrevista semiestructurada, el método propuesto contribuyó a aumentar la precisión, la certidumbre y la rastreabilidad de los costes y proporcionó la integridad del sistema contable, técnico y operacional. Además, se analizan las desviaciones y se reducen los costes al considerar las condiciones competitivas y estratégicas. También se limita el coste objetivo de los paquetes de trabajo y se genera una alerta al finalizar cada uno de ellos. Además, de acuerdo con el test de Friedman, existe una capacidad competitiva significativa en comparación con el método convencional de control de costes en los proyectos y también se aplica en un estudio de caso. This research proposed a new method for project cost management based on Competitiveness and traceability in a case study and operational situation. The research hypothesis is based on the synergistic ability of performance focused activity-based costing in combination of the target costing method for encouraging competitiveness cost control system for project environments. The method was developed to control, direct and overhead costs of the project during its progress. Also, it uses the feature of activity-driven and different resource drivers to determine the types of costs with the effect of time driver for each activity. An interview was conducted with financial managers during two to four times with the aim of validating and modifying the method. According to a semi-structured interview, the proposed method contributed to increase the precision, certainty, traceability of costs and provided the integrity of the accounting, technical and operational system. It also analyzes deviations and reduces costs by considering competitive and strategic conditions. It's also limiting the target cost of work packages and causing an alarm on the completion of each. According to Friedman test, there is a meaningful competitive ability compared to the conventional cost control method in the projects and it is also implemented in a case study.

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Target Cost Management (TCM): A Case Study of an Automotive Company

Cited by 20 publications

References 7 publications

Use of Target Costing methodology in the construction of wood-aluminium windows — case study

Use of Target Costing methodology in the construction of wood-aluminium windows — case study

The Role of Target Cost in Cost Reduction: an Empirical Case of Bazian Cement Factory in Kri

A New Cost Management System for Construction Projects to increase Competitiveness and Traceability in a Project Environment

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