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Application of activity-based costing to a land transportation company: A case study

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  • Baykasoglu, Adil
  • Kaplanoglu, Vahit

Abstract

Although there are many studies in the literature that explain modern costing approaches including activity-based costing (ABC), the number of studies that present real life applications is very few. This is especially true for logistics and transportation applications. One of the main difficulties in land transportation companies is to determine and evaluate true cost of their operations and services. If used and implemented properly, ABC can be very helpful for transportation companies to determine cost of their operations with higher correctness. In this paper, an application of ABC to a land transportation company that is located in Turkey is presented in detail. In order to improve the effectiveness of the ABC an integrated approach that combines ABC with business process modeling and analytical hierarchy approach is proposed. It is figured out that the proposed approach is quite effective in costing services of the land transportation company compared to the existing traditional costing system which is in use.

Suggested Citation

  • Baykasoglu, Adil & Kaplanoglu, Vahit, 2008. "Application of activity-based costing to a land transportation company: A case study," International Journal of Production Economics, Elsevier, vol. 116(2), pages 308-324, December.
    • Handle: RePEc:eee:proeco:v:116:y:2008:i:2:p:308-324
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    References listed on IDEAS

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    Cited by:

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    4. Marjan Sternad, 2018. "Metrics Of Logistics Costs In Slovenian Companies," Business Logistics in Modern Management, Josip Juraj Strossmayer University of Osijek, Faculty of Economics, Croatia, vol. 18, pages 125-134.
    5. Martha Ríos Manríquez & Clara I. Muñoz Colomina & M. Lourdes Rodríguez Vilariño Pastor, 2014. "Is the activity based costing system a viable instrument for small and medium enterprises? The case of Mexico," Estudios Gerenciales, Universidad Icesi, July.
    6. Engblom, Janne & Solakivi, Tomi & Töyli, Juuso & Ojala, Lauri, 2012. "Multiple-method analysis of logistics costs," International Journal of Production Economics, Elsevier, vol. 137(1), pages 29-35.
    7. Domenico Raucci & Dominique Lepore, 2020. "A Simplified Activity-Based Costing Approach for SMEs: The Case Study of an Italian Small Road Company," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 198-214.
    8. Schulze, Manuel & Seuring, Stefan & Ewering, Christian, 2012. "Applying activity-based costing in a supply chain environment," International Journal of Production Economics, Elsevier, vol. 135(2), pages 716-725.
    9. Askarany, Davood & Yazdifar, Hassan & Askary, Saeed, 2010. "Supply chain management, activity-based costing and organisational factors," International Journal of Production Economics, Elsevier, vol. 127(2), pages 238-248, October.
    10. Wong, Christina W.Y. & Lai, Kee-hung & Ngai, E.W.T., 2009. "The role of supplier operational adaptation on the performance of IT-enabled transport logistics under environmental uncertainty," International Journal of Production Economics, Elsevier, vol. 122(1), pages 47-55, November.
    11. Askarany, Davood & Yazdifar, Hassan, 2012. "An investigation into the mixed reported adoption rates for ABC: Evidence from Australia, New Zealand and the UK," International Journal of Production Economics, Elsevier, vol. 135(1), pages 430-439.

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