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Applying ERP and MES to Implement the IFRS 8 Operating Segments: A Steel Group’s Activity-Based Standard Costing Production Decision Model

Author

Listed:
  • Wen-Hsien Tsai

    (Department of Business Administration, National Central University, 300, Jhongda Rd., Jhongli District, Taoyuan 32001, Taiwan)

  • Shu-Hui Lan

    (Department of Business Administration, National Central University, 300, Jhongda Rd., Jhongli District, Taoyuan 32001, Taiwan)

  • Hsiu-Li Lee

    (Department of Accounting Information, Chihlee University of Technology, 313, Sec. 1, Wenhua Rd., Banqiao District, New Taipei City 22050, Taiwan)

Abstract

The purpose of this paper is to create a smart operating roadmap, which shows the entire process of a strategic business plan, including functions, methods, and tools, to link IFRS 8 (International Financial Reporting Standards No.8) to ABSC (Activity-Based Standard Costing), and to integrate ERP (Enterprise Resource Planning), MES (Manufacturing Execution System) under an Industry 4.0 environment. The IFRS is a global accounting framework that provides high-quality global accounting standards and governance principles for companies. Using the ABSC production decision model can support the Chief Operating Decision Maker (CODM) in planning Product–Business Unit (Product-BU) organization, which complies with the definition of the IFRS8 operating segments. The case study of the steel group uses the organizational design of the ERP system to achieve the systematization of reportable segments financial statements. In this process, the mathematical programing methods and ABSC can be used to obtain the optimal solutions for sales, costs, and profits. An international steel group case is used to demonstrate how to apply the methodology proposed in this paper for operating planning and control. The sensitivity analysis on the carbon emission reduction goal of environmental sustainability is also presented for the steel group case.

Suggested Citation

  • Wen-Hsien Tsai & Shu-Hui Lan & Hsiu-Li Lee, 2020. "Applying ERP and MES to Implement the IFRS 8 Operating Segments: A Steel Group’s Activity-Based Standard Costing Production Decision Model," Sustainability, MDPI, vol. 12(10), pages 1-33, May.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:10:p:4303-:d:362493
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    References listed on IDEAS

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    1. Wen-Hsien Tsai & Shu-Hui Lan & Cheng-Tsu Huang, 2019. "Activity-Based Standard Costing Product-Mix Decision in the Future Digital Era: Green Recycling Steel-Scrap Material for Steel Industry," Sustainability, MDPI, vol. 11(3), pages 1-30, February.
    2. Tsai, Wen-Hsien, 1996. "A technical note on using work sampling to estimate the effort on activities under activity-based costing," International Journal of Production Economics, Elsevier, vol. 43(1), pages 11-16, May.
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    Cited by:

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