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Sharing Cost of Shared Services Centre

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  • Tomáš Buus

Abstract

In the presented paper we develop model of apportionment of cost generated by variability and mean value of flows from (to) shared services centre. It can be either cash pool or distribution centre, or even some kind of customer service centre. The apportionment formula for the cost of capacity generated by flow variability turns out to be regression coefficient of flow to (from) the distribution centre (cash pool) generated by particular company within the multibusiness enterprise as endogenous variable to flow of inventory (cash) for the whole distribution centre (cash pool) as exogenous variable. The cost generated by the flow of requirements (goods, money) itself, i.e. by the mean value of the flow, has to be split between SSC customers according to their share on that flow. Result does not depend on the form of cost function as long as it is strictly increasing function of flow from (into) SSC (orders, stock, cash) and of mean of that flow.

Suggested Citation

  • Tomáš Buus, 2011. "Sharing Cost of Shared Services Centre," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2011(4), pages 49-59.
    • Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:4:id:19:p:49-59
    DOI: 10.18267/j.efaj.19
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    References listed on IDEAS

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    1. Karl Inderfurth & Stephanie Vogelgesang, 2011. "Concepts for Safety Stock Determination under Stochastic Demand and Different Types of Random Production Yield," FEMM Working Papers 110003, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    2. Constantinos Maglaras & Assaf Zeevi, 2003. "Pricing and Capacity Sizing for Systems with Shared Resources: Approximate Solutions and Scaling Relations," Management Science, INFORMS, vol. 49(8), pages 1018-1038, August.
    3. Zhang, Anming & Zhang, Yimin, 2010. "Airport capacity and congestion pricing with both aeronautical and commercial operations," Transportation Research Part B: Methodological, Elsevier, vol. 44(3), pages 404-413, March.
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    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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