Stochastic Estimation of the Raw Materials Cost and the Determination of The Mean-Expected Total Product Cost : Analysis and Application
The present paper offers an alternative way of estimating the mean expected cost of raw materials so as to improve the estimation of the expected total productcost without expanding beyond the framework of measuring and controlling the efficiency of the business. Apart from the estimation methodology proposed, the paper also focuses on the implications of the variance between expected and actual raw materials cost. In this respect, the paper is potentially interesting for managers because it offers new information that can help their decision making process in three different ways: first, it may help managers to redefine the targets of their business; second, it offers managers the insights that could help them take the required corrective actions; and third, it helps managers to better analyze the raw-materials variances in a way that the prevailing estimated cost is both realistic and effective.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Trond Bjørnenak & Falconer Mitchell, 2002. "The development of activity-based costing journal literature, 1987-2000," European Accounting Review, Taylor & Francis Journals, vol. 11(3), pages 481-508.
- repec:bla:joares:v:12:y:1974:i:1:p:182-187 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:ers:journl:v:ix:y:2006:i:3-4:p:35-46. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marios Agiomavritis)
If references are entirely missing, you can add them using this form.